The state-run Investment Corporation of Bangladesh (ICB) and the Dhaka Stock Exchange (DSE) shareholders are set to invest their much-talked-about fresh funds in the capital market very soon.
They expressed optimism regarding the fresh investment at a meeting in the capital on Tuesday.
Bangladesh Securities and Exchange Commission (BSEC) arranged the urgent meeting to prop up the stock market that experienced sharp fall in the last few sessions.
The representatives of Bangladesh Merchant Bankers Association (BMBA), ICB, DSE Brokers Association of Bangladesh (DBA), and asset management companies attended the meeting to address the issues behind the ongoing market fall.
"ICB told the meeting that it will get funds worth Tk 20 billion next week. After getting the funds, the corporation will provide necessary support to the market," said BSEC Executive Director (ED) Mohammad Saifur Rahman.
Referring to the DSE shareholders, he said the funds received from the Chinese consortium by selling their stakes will also be injected in the market just after issuance of a statutory regulatory order (SRO) by National Board of Revenue.
"We hope a positive outcome of Tuesday's meeting will be visible in the market," he added.
As per the BSEC approval, ICB is set to complete the process of raising funds amounting to Tk 20 billion through issuing subordinate bonds.
ICB will have to invest Tk 15 billion in listed securities of the capital market in accordance with the BSEC directive.
In September, DSE received Tk 9.62 billion from its Chinese strategic partner by selling the exchange's 25 per cent stake.
The government has reduced the capital gain tax to 5.0 per cent from 15 per cent on the funds, received from the Chinese consortium, with a condition of investing it in the stock market.
After issuing the SRO regarding reduction of gain tax, DSE shareholders will invest the funds in the market.
"The SRO is set to be issued as early as possible," the BSEC ED said referring to the DSE shareholders.
ICB Managing Director (MD) Kazi Sanaul Hoq said the participants of Tuesday's meeting proposed formation of a working group comprising all market intermediaries.
The proposed group will place recommendations before the regulatory bodies from time to time to support and improve the market.
"The proposal of forming a working group will be placed before BSEC, seeking its consent. After getting the regulator's consent, the proposed working group will get a structure," Mr. Rahman further said.
The ICB MD told the FE that the Tk 20 billion funds will be credited to ICB next week.
"We are also working to mobilise funds from different sources as part of our efforts to support the market."
He also said the ongoing declining trend of the capital market is not 'acceptable', as all economic factors (of the country) are positive.
"The market intermediaries told the meeting that they will remain alert against aggressive sale pressure," Mr Hoq added.
Some market intermediaries, however, told the meeting that the country's political situation has created a negative impact on the capital market.
In this regard, the BSEC ED told the meeting that the overall situation is not so bad that the market will be affected by it.
