2020-01-21 16:51:42 BdST
Merchant bankers' plea for raising funds
Merchant bankers on Monday called for increased fund support and quality public offerings to help restore stability in the country's capital market.
To attract good and sound companies to the stock market, they also called upon the authorities concerned to introduce a lucrative incentive package by eliminating the existing barriers like double-taxation.
A special committee of the ministry of finance tasked with monitoring the market made the calls at a meeting held at the Investment Corporation of Bangladesh, or ICB, in the city.
After the meeting, president of the Bangladesh Merchant Bankers Association, or BMBA, Md Sayadur Rahman told reporters that they discussed various issues, including the effective ways to give new life to the share market.
He said they raised the issue of fund supply that needs to be enhanced and it was agreed by the committee members.
Regarding the Tk 100-billion fund intended to revamp the capital market, he said the committee assured them of discussing the matter with the authorities concerned.
Also, Mr. Rahman said, the merchant bankers highlighted the importance of bringing good companies in stock trading so that prices of the initial public offering, or IPOs, cannot go up abnormally.
He said the inadequate supply of IPOs often leads to abnormal prices and investors become frustrated once it comes down, which negatively affects the market. "We suggested luring good companies into the market by offering lucrative incentives if needed," he said. "The existing incentive facility is not enough. That's why, good companies are not showing interest in getting listed," he added.
The BMBA president, however, did not give any further details of the discussions of the first meeting of the special committee convened against the backdrop of the persistent bearish trend in the share market in recent months.
The committee members also did not talk with the media.
In September last, the ministry of finance formed the committee under the Bangladesh Securities and Exchange Commission or BSEC to monitor the capital market.
The meeting sources said this was the first meeting of the special body and it will also sit with other stakeholders of the market before its gives its final proposals to bring dynamism in the market.
The special committee's meeting came following the six-point instruction of the Prime Minister for reviving the country's stock market, including ensuring easy credit facility for market operators and attracting more foreign investments.
The DSEX, the core index of the Dhaka Stock Exchange, DSE, has shed a cumulative 746 points in the past three months and lost Tk 256 billion in market capitalisation during the period.
The market witnessed the losing streak during the last four sessions before the core index adding 232 points on Sunday, the biggest single-day gain in seven years.
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