Bring good cos to enhance depth of capital market

Discussants have stressed the need for proper utilisation of the country's capital market in country's industrialisation and infrastructure development.

They also laid emphasis on listing of multinational companies and local large companies to enhance the depth of the stock market at a seminar titled 'Importance of Capital Market as Source of Long Term Finance: Bangladesh Perspective'.

Bangladesh Merchant Bankers Association (BMBA) organised the seminar held at a city hotel on Wednesday.

In his speech, industries minister Amir Hossain Amu said the money which is scattered in different hands cannot help the country's economy.

"But this money turns into a big capital when it is invested in the capital market. The country's industrialisation is possible through the money which is lying in scattered way," Amu said in the seminar as special guest.

He said the country's infrastructure development which is achieved so far will be helpful for industrialisation.

"The country's capital market presently is more vibrant than previous years," Amu added.

The chairman of the securities regulator professor M Khairul Hossain said the merchant banks will have to bring good companies to enhance the depth of the capital market.

"The merchant bankers should bring companies having good fundamentals for the sake of their own image," Khairul said.

He said the companies willing to go public are not sincere in case of fulfilling the disclosure requirements set in the securities rules.

"The book building system is being misused. But the regulator remains alert to contain any kind of foul play in case of going public through book building method," said the chairman of BSEC.

He urged the large companies to raise fund through capital market to avoid the complexities of bank loans.

"The country's capital market can be a source of long term financing for infrastructure and industrialisation," Khairul said, adding that there is a correlation between the development of economy and capital market.

The president of Bangladesh Association of Publicly Listed Companies (BAPLC) Azam J Chowdhury raised concern about the price hikes of the shares of companies which are not in operation.

According to information of Dhaka Stock Exchange (DSE), many 'Z' category companies recently observed abnormal price hikes on the stock exchanges despite having no undisclosed price sensitive information. Some of the companies also topped the gainers chart of the premier bourse.

"Stringent regulatory surveillance should be deployed to contain the abnormal price hikes of the worst-performing companies," Chowdhury said.

The BMBA President Sayadur Rahman emphasised on proper coordination between the regulatory bodies and other stakeholders to avoid any negative impact on the listed companies.

He demanded a government policy in favour of making the multination companies listed with the stock exchanges.

"The government should offer good tax incentives so that the large companies feel encouraged to go public," Sayadur said.

He also upheld a set of proposals including the consideration of bank's capital market exposure on the basis of investment price instead of market price.

M. Mosharraf Hossain, chief executive officer (CEO) of Prime Finance Capital Management, presented a keynote speech in the seminar.

In his presentation, Hossain said the large volume of financial requirement can be fulfilled through the capital market.

"Our market capitalisation to GDP ratio is only 21 per cent whereas the ratio is 70 per cent in neighbouring country India," Hossain said and urged the entrepreneurs to take advantage of IPO (initial public offering) facilities.

Ahsan Khan Chowdhury, CEO of PRAN-RFL Group, said many entrepreneurs have great experience but they are lagging behind compared to other countries because of capital shortage.

"More companies should go public for raising fund along with ensuring rightful interest of investors," Ahsan said, adding that the capital market can play a vital role in case of fund mobilising.

Referring to the keynote speech, the managing director of Khan Brothers Group, Tofayel Kabir Khan said the number of companies which went public in 2017 is not up to the mark.

"The number of listing of companies should be rational," Tofayel said.

The commissioners of the securities regulator, top officials of both the stock exchanges, different listed companies and merchant banks, among others, also attended the seminar organised by the BMBA.

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