Farashuddin to head stock market advisory body

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FE Report The ministry of finance (MoF) Thursday announced formation of a five-member body with former Bangladesh Bank Governor Dr Mohammed Farashuddin as its convener after excluding its previously announced chief, the finance minister, officials said. The ministry in a circular issued Thursday said the former governor of the central bank will lead the Capital Market Advisory Council (CMAC) to help bring about efficiency, transparency and stability in the country's stock markets. The other four members of the council are: former SEC chairman Faruk Ahmad Siddiqi, Supreme Court lawyer Anisul Haq, an army officer in the rank of Major-General, and joint secretary of Banking and Finance Division of the MoF. On October 16, the MoF issued a circular on the formation of a six-member advisory council with Finance Minister AMA Muhith as its convener. Later, the finance minister withdrew himself from the committee. However, the latest circular said the reformed advisory council will give advice on laws, rules and regulations and all relevant matters of the stock market. The council will be able to co-opt additional members in due time if it feels necessary, the circular said. Meanwhile, the Bangladesh Insurance Association (BIA) Thursday submitted three proposals to the Securities and Exchange Commission (SEC), seeking its consent to invest Tk 17.956 billion fund of the life insurers in the stock market, officials said. The BIA sent the proposals to help make a positive impact on the troubled stock market, facing now a critical fund shortage problem in the aftermath of the December-January debacle. BIA Chairman Sheikh Kabir Hossain submitted the proposals, approved by its executive committee on October 16, to SEC Chairman M Khairul Hossain. The association proposed to earmark at least 10 per cent quota in all initial public offerings (IPOs) for the insurance companies as is done in the case of mutual funds. Furthermore, the BIA proposed for issuance of licences for setting up full-fledged merchant banks as subsidiaries of the insurance companies, as has been allowed in the cases with banks and other financial institutions. The association expressed optimism about mobilising about Tk 10 billion in the stock market through the merchant banks. In yet another proposal, the BIA pleaded for granting a licence to launch asset management companies to manage mutual funds and unit funds, with which an investment of Tk 5.0 billion can be mobilised. Presently, a total of 43 general and 17 life insurance companies are operating in the country. Out of the 17 life insurance companies, 11 are already listed with the bourses and the remaining six are expected to be listed soon. The statistics of the BIA showed that 17 life insurers have a total fund of Tk 134.928 billion, of which an amount Tk 28.333 billion is available for investment in the stock market. Of Tk 28.333 billion, Tk 10.377 billion has already been invested in the stock market and the remaining amount of Tk 17.956 billion is available for fresh investment. Among the life insurers, National Life has an investible fund of Tk 3.702 billion, Delta Life Tk 4.273 billion, American Life Tk 8.003 billion, Sandhani Life Tk 1.376 billion, Meghna Life Tk 1.562 billion, Popular Life Tk 2.653 billion, Pragati Life Tk 445.01 million, Rupali Life Tk 471.01 million, and Golden Life Tk 207.62 million.