Sayem Sobhan AnvirPublished:
2022-11-30 20:17:04 BdST
‘We strive to build a reliable and sustainable capital market’
Apart from giant companies, small investors and ordinary people also aspire to see the country's capital market as a safe and profitable place for their investment. However, a secure capital market is yet to be built, even after two significant scams in 1996 and 2010.
ABG Limited seeks to establish the capital market as a reliable alternative income source for ordinary investors. All world-class innovative technologies and technical facilities will be assembled to build Chittagong Stock Exchange (CSE), a technology-friendly platform for investors. It will help investors regain their confidence.
After several breakthroughs, Bangladesh has appeared as a rising tiger in South Asia. Breaking the circle of hunger and poverty, leaving all threats behind, this Bangladesh is invincible-irresistible. The frenzy of indomitable energy of millions of people leads the nation to achieve a new identity- 'Solvent Bangladesh' in its golden jubilee of independence, from the stigma of a 'bottomless bucket.' Bangladesh is now an incredible amalgamation of communal harmony with unquestionable success in economy, enterprise, industry, culture, education, and health.
However, before the impact of the deadly coronavirus is over, the Ukraine-Russia war and global inflation have shaken the economy of the whole world. Bangladesh has also been affected by the worldwide recession. In the meantime, the global economic downturn has put the country's entire economy in extreme danger. The declining trend of the foreign exchange reserve of Bangladesh is the result of the global economic recession. It directly impacts the lives of people from all walks of life. Especially low-income people suffer severely since the cost of living is increasing while income is decreasing badly.
The capital market could be the center of safe income for ordinary people and small investors in this transitional period of inflation and increased cost. If there is a developed, modern, and stable capital market, even if inflation increases, people will have the strength to combat it. Unfortunately, it was not possible to do that.
But everything is not over yet. We have a chance to turn around. To build a prosperous and self-reliant Sonar Bangla of Bangabandhu, the capital market, one of the essential parts of the financial sector, must be radically changed. We want to come forward as a savior in this situation. Keeping that goal in mind, ABG Limited, a subsidiary of Bashundhara Group, is interested in becoming a strategic partner or strategic investor of the Chittagong Stock Exchange (CSE). Happily, we are moving towards achieving that desired goal. Now we will focus on establishing this capital market as an equally supportive shelter for all.
Chittagong Stock Exchange already accorded permission for commodity market from Bangladesh Securities and Exchange Commission, the apex body of the capital market of the country. Now-a-days foreign exchange has also become one of the pioneer instruments/securities among all other securities of the capital market. Popularity of the foreign exchange increased gradually over the years in the developed countries across the world. You would be very happy to hear that, ABG already has taken notable initiatives to on board foreign exchange, commodities and derivatives into the trading platform of Chittagong Stock Exchange. We are particularly working on how to on board commodities, derivatives (equity, commodity, FX) and indices at the CSE’s trading platform with a collaboration of global capital market leading companies. We believe, ABG will be able assist CSE to introduce all above mentioned securities at the trading platform of Chittagong Stock Exchange by 2030.
As the country's leading business conglomerate, Bashundhara Group does not only focus on making money; it also performs some responsibilities for the people and nation. Our slogan is -`For the welfare of the country and people’, which was introduced by my elder brother. Since then, we have all taken this sentence as a vow. One of our big goals is to achieve the welfare of the country's people, and we are doing it differently. However, it is good to get an opportunity to do something in people's interest through the financial sector and the capital market. Hopefully, here too, we will be able to achieve the target.
We have already started working. A US-based firm is being tapped to make CSE technology-friendly. One of our goals is to bring the capital market into the hands of every people in the country by making it advanced and technology-friendly, primarily through modern technical management. So that people can start investing from 5-10 thousand BDT for the long term. It is better to make a small profit rather than keep money uncirculated in the bank.
People from almost every country worldwide invest long-term in the capital market along with bank insurance, which is a different source of income. From this income, they can spend extra money at the end of the year, or people can go on outings on holidays. But two big crashes in our capital market in 1996 and 2010 have scared ordinary investors; now, people are terrified of investing in the capital market. Even hearing the name of the capital market brings negative questions to many people's minds. Most people now need more confidence in investing in the stock market, including foreign investors. This is mainly due to a need for more adequate information, fear of manipulation by evil syndicates, and lack of stringent action against the culprit of the capital market.
Although the two incidents have frightened ordinary investors, no attempt has been made to restore the investors' confidence. We want to light the lamp of lost hope in people's minds with a proper action plan and make the process easy. So that investors trust the capital market again and invest. It should work as an alternative source of their family income. As a strategic partner or investor of the Chittagong Stock Exchange (CSE), ABG Limited will first work to ensure easy access to information. Besides, through the responsible officials of CSE, regular transactions in the capital market will be monitored. So that no one can steal the money of the investors. For this, the capital market regulatory body Bangladesh Securities and Exchange Commission (BSEC) cooperation will be required.
Our neighboring nation India's National Stock Exchange (NSE), has an average daily turnover of 22,724 crore rupees. Whereas the average daily transaction in the two stock exchanges of Bangladesh is less than a thousand crore. Many people will say that their population is around 140 crores, their economy is large, and the number of companies listed in the capital market is high. But our population is more than 165 million. We are lagging in terms of investment as a proportion of the population. So, why will our transactions not be 1 part of 7? Why large capital companies will not be listed in our capital market? Why foreign investment will not increase in our capital market? Why can't trust be returned? It is possible.
Let me come up with an example of NSE; the National Stock Exchange of India (NSE) became the world's largest derivative exchange' in 2021 despite corona infection. The information came from the statistics conducted by the Futures Industry Association (FIA). Also, according to the World Federation of Exchanges statistics, NSE ranks fourth in the world in cash equity based on the number of trades. We are at the very end of the list. The reason for this is interdependence. We have to look to developed world countries for technology. When you want to start something new, you are told that it is impossible with us. But no one learns everything from the mother's womb. New tasks, new challenges, and new experiences will come up, and we have to face those. If necessary, we will hire a consultant to complete the work. But we must be in charge of the work. If not, the multinational companies will smuggle the money of this country abroad by earning in our country.
Look at the telecom companies in Bangladesh; Grameenphone has 8.4 million subscribers, Robi Axiata has 5.48 million subscribers, and Banglalink Digital Communication Limited has 3.85 million subscribers. There, the number of subscribers of Teletalk Bangladesh Limited, owned by the Bangladesh government, is only 67 lakh. Following the laws of the Bangladesh government, other multinational companies have taken billions of money abroad for telecom business, but Teletalk is not in that competition. The main reason is the fear that we can't do it. At the same time, we have extra love for foreign companies.
Multinational companies are also responsible for the unlimited dollar crisis in the country today. Although these institutions make thousands of crores of profit in the country, the new investment is minimal. As a result, money is going abroad. The situation could have been different if domestic companies were given investment opportunities like multinational companies. Because the profit we make from the business is reinvested in the country. The domestic labor market is our main strength.
Bashundhara Group has always been giving importance to domestic products and domestic production. Many daily essential products are being produced here to meet the needs of the country's people. Not only that, the group has opened many avenues to earn foreign currencies which are helping the country to curve down trade disparity. We are determined to play a role as one of the regulators in the country's transitional period. Respecting the country's laws and policies, we play a role in critical sectors. Similarly, we want to have a positive impact on the capital market as well so that ordinary investors regain their lost confidence.
But there needed to be an initiative to restore the confidence of investors. Last year was the perfect time to take such a step. Everything came to a standstill when the coronavirus started in 2020. Despite that situation, the price of 300 companies increased in 2021 out of 368 companies listed in the capital market. Among them, the share and company prices of 70 companies increased by more than 100 percent. Even after such an unnoticed rise in the capital market, we could not attract investors. Or those who came to the capital market at that time also moved to the sidelines due to the fear of gambling. But if we could secure capital market investment, Chittagong Stock Exchange could be a source of additional income for the middle class.
Even though multinational companies invest in our country and withdraw thousands of crores of money, there is little foreign investment in the capital market of Bangladesh. Last September, only 1 crore 41 lakh BDT was invested in CSE. At the same time, DSE's foreign investment fell to the previous seven-year low. This situation must be changed. Commodity exchanges, as well as derivatives and options markets, will also be set to open at the CSE. It will take three years to fully realize the dream that is starting today. After 36 months, you will see a new CSE, which will be more modern and secure. The system will be fully digitized and automated.
With investment in different countries of the world, it becomes a settlement. The buyer gets the shares, and the seller receives the money. But our settlement cycle is still T-2, and it is- the percentage can be sold two days after buying the share. Similarly, the share sale money is deposited to the investor's account after two days through the banking channel. Banks are making a profit by using the money at this time. But the investors do not get any benefit from this money. We should change the trade cycle. ABG Limited will work to change this situation. Investors can buy and sell shares whenever they want. Foreign investors will come to the capital market of Bangladesh.
In addition to the secondary market, we bring reforms in our primary and small-cap markets. Because the nameless companies are stealing money from the capital market by submitting fake prospectus. Many people think managers and audit companies are involved with this process. But these issues should be presented to investors through proper investigation. As a result, many companies went bankrupt after going public, but the investors still needed to get their money back. In such a situation, restoring people's trust without transparency and accountability is impossible. ABG Limited and CSE will work together to protect the interests of investors.
Although many public and private companies in the country have made thousands of crores of profit, they have yet to come to the capital market through Initial Public Offering (IPO). Because, in the capital market, investors must give financial accounts in four quarters a year, assets and income-expenditure must also be shown. The annual General Meeting (AGM) of all enlisted companies has to be held at the end of the year. As a result, those associated with the company will be unable to do money laundering or embezzlement even if they want to. They must come under the umbrella of transparency. They don't want to do that. Therefore, the government should reduce the tax benefits of multinational companies with large profits and list them in the capital market. It will increase the fund of the capital market as well as increase its depth. Investors will also be interested in the market.
Big companies want to avoid coming to the capital market. But some companies struggle a lot to go to the capital market. For example, a company applied to BSEC in February 2020 to raise funds for business expansion. But the company was allowed to withdraw money in 2022. In the meantime, the company has completed the development by borrowing from the bank; this should be different. A one-stop service should be introduced for the registration of new companies. Also, there should be the facility to open a BO account through an app with only NID and mobile number. This will attract new investors.
The investment process should be simplified for ordinary and foreign investors. A strong unit should be opened to bring them to the capital market. This unit will attract investors from different countries to direct investment in Bangladesh. Apart from this, the students of various public and private universities in the country should be allowed to invest in the capital market under easy conditions, besides teaching them capital market investment strategies.
At the same time, a balanced, orderly, and sustainable capital market should be developed to maintain the continuity of how Bangladesh is creating new successes in the development stage. And for this purpose, Bashundhara ABG Limited is determined to stand by the investors with all the necessary services and support.
As we all know, investors of our country have already lost their faith in capital market. Again here we found to do something good for the economy of the country. We believe an exchange with all types of securities and sustainable secured global standard trading platform eco system will be able to attract not only all classes of investors but also compel all citizens of the country and foreign investors to invest in the capital market instead of investing or depositing funds anywhere else. Hopefully we, ABG will be in a very good position to transform the living standard of all citizens of the country through revamping CSE. Moreover, to expedite the eco system of Capital market in Bangladesh, ABG also integrated three more new business ventures with a vision for vertical integration and financial inclusion. We, ABG Limited is very happy to share the business identity of these specialized ventures with business prospects.
ABG TECHNOLOGIES LIMITED has been incorporated to create a digital payment gateway for faster transections of CSE. We believe it will help to transform BSEC’s instant settlement desire to reality. Investors may obtain an easy and transparent way to invest in the capital market. By using this channel both investors and government of Bangladesh will be benefitted and get direct privilege. The company may contribute to fulfil the dream of digital Bangladesh of our Honourable Prime Minister. You would be pleased to know that, the company is ready to work with CSE dedicatedly.
ABG Media Limited has been incorporated to establish a dedicated TV channel, magazine, and newspapers for all types of business ventures, especially the capital market. The company will be able to contribute to branding and acquisition of new investors at the CSE.
ABG Datafication Limited has been incorporated to act as the data centre of all companies of the biggest business conglomerate known as Bashundhara group. The company has the ability to provide e-KYC services to the exchange along with datacentre and other facilities subject to the prior approval from relevant authorities.
With the contributions and assistance of ABG Limited, capital market of the country will rise and CSE will become one of the top exchanges of the world.
Developed world has already moved to the digital economy. This digital economy will keep contribution to achieve Vision-2040 of the government of Bangladesh. ABG Limited will contribute to transform Bangladesh into digital economy by introducing utmost technology in the capital market. We envision engaging grassroots-level people with capital market and would like be a stakeholder of building Bangladesh with digital economy.
Sayem Sobhan Anvir, Managing Director of Bashundhara Group and ABG Limited
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