Muhith optimistic about outcome of new DSE indices

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FE Report Finance Minister AMA Muhith Tuesday took a positive note of the newly-introduced Dhaka Stock Exchange (DSE) indices, expressing the hope that they would help restore investors' confidence in the market. The confidence level of investors would be further higher and transparency in the capital market would be established after demutualisation of stock exchanges takes place, the minister said. The DSE launched two indices -- DSEX and DS30 -- on Monday last. The indices are based on the free-float method used by the world's major stock exchanges to reflect the movements prices of the selected stocks in the market. Mr. Muhith termed the current trends in the capital market as chaotic and erratic, saying, "The situation needs to be improved." "I am hopeful of improvement of the situation as we have undertaken a number of reforms to help stabilise the capital market. Things will be changed after demutualization of the bourses soon," Mr. Muhith stated at a function at the ministry of finance (MoF) on the occasion of handing-over of dividend by the Investment Corporation of Bangladesh (ICB). He said, the present government from its very beginning has been trying to help bolster the capital market and it has also got some results out of its efforts. Furthermore, the finance minister lauded the recent initiative by the Federation of the Bangladesh Chambers and Commerce and Industry (FBCCI) to help rejuvenate the stock market. Asked about a proposal of ICB for allowing investment of undeclared money in the Bangladesh Fund without any penal rate of tax, Mr. Muhith responded in the negative. He categorically said the existing facility for investing undisclosed money in the stock market will continue, alongwith a penal rate of tax in the future, no matter who will be at the helm of the MoF next time. About the government's investments, the finance minister said such investments are made in many sectors, but the returns on the same are meager. Particularly, the government investment in industries often incurs losses, he pointed out. "The government itself should not be in industry and business, but it can exercise its regulatory authority in many ways," he added. ICB chairman Dr SM Mahfuzur Rahman handed over a cheque of Tk 455 million to the finance minister, including Tk 227.81 million as cash dividend and Tk 227.81 million as dividend warrant, for the fiscal year (FY) 2011-12. Acting secretary of the Bank and Financial Institution Division Amalendu Mukherjee, joint secretaries Gokul Chad Das, Qamrunnahar Ahmed and Arijit Chowdhury, ICB managing director M Fayequzzaman and other members of the Board of Directors of ICB were present on the occasion.