Muhith blames manipulators for stock market volatility

FE Report | Published: June 13, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

Finance Minister AMA Muhith blamed manipulators Thursday for destabilising the country's stock markets.
"They are not investors at all. There are a group of people who destabilise the markets. They are manipulators," the minister said during a meeting with the boards of directors of demutualised stock markets at the ministry's conference room.
Secretary of Banks and Financial Institution Division Dr Aslam Alam, chairman of the Bangladesh Securities and Exchange Commission (BSEC) Dr Khairul Hossain, chairman of the Dhaka Stock Exchange (DSE) Justice Siddiqur Rahman Miah, chairman of the Chittagong Stock Exchange (CSE) Dr Muhammad Abdul Mazid, and directors and high officials of two stock exchanges were present during the meeting.
In the meeting, the board members of two stock exchanges placed a list of recommendations to be included in the proposed budget.
Mr Muhith said there is a tradition in Bangladesh's stock markets that one individual is investor, trader as well as broker. Following demutualisation of the markets, now one individual who is a trader will remain only trader; a broker will remain a broker and an investor will remain only investor. Here everyone should have separate responsibilities.
"But bringing the change will take some more time."
The minister sought advice from the board members how to encourage big local and multinational companies to be listed in the stock markets.
Replying to a director's proposal, Mr Muhith said, "We all say the stock markets can be a good source of fund for infrastructure projects. But the problem is still there is no mentionable stock market in Bangladesh."
"It's not yet a stock market. The tradition of long-term holding of shares did not grow up here," he mentioned.
The minister said steps were taken to bring state-owned companies in the stock markets. But, volatility of the markets has halted their listing or offloading of more shares.
"But now the market is in a stable position. Now the government-owned companies can be listed in the stock markets," Mr Muhith added.
The minister said the OTC (over the counter) market is practically an ungoverned market. "Huge money is stuck up in the OTC market. I want the money to go to the main market. But, before that, the rules of OTC markets have to be reformed."
SEC chairman Dr Hossain said when the market sees volatility, people concerned blame the SEC. "But it is a fact that the BSEC or the government never trades in shares. No funds are available with us to act when the markets face crisis."
He said when the markets see massive volatility, the BSEC checks if there is any manipulation behind. The BSEC also ensures punitive actions against the manipulators, he said.
The recommendations made by the boards of the two stock exchanges include tax holiday facility for next five years, withdrawal of proposed gain tax on individual earnings, cancellation of new rules on realisation of source tax on trade by shareholders of stock exchanges, and fixing ceiling of tax-free income of investors from Tk 15,000 to Tk 50,000.
Dr Alam said many problems of the stock markets could not be resolved due to lack of confidence of investors. The problems will go when confidence grows among the market players, he said.