Bangladesh Fund : Life-saving support for an ailing market

The Finance Minister sometime ago declared that a special fund to be managed by the state-owned Investment Corporation of Bangladesh (ICB) would be created. Called the Bangladesh Fund (BF), it would aim to raise some Taka 50 billion for injection into the capital market. Its aim is to achieve an invigoration of the sagging market with massive pumping in of money. Ever since the declaration about forming the fund and later media reporting on the various stages of its formation, the share market of the country has witnessed some revival of the confidence of the investors, though its sustenance remains still in doubt. The behaviour of prices in the stock market - ups and downs and those too on a notable scale - do bear this out. Sagging share values, thus, rose sustainably for some days from a feeling that the fund would come like a bail-out for the sliding market. But then again, as quickly, the market witnessed some downward pressures on prices. The news about delays in formation of the fund, suggesting, rightly or wrongly, about its uncertainty may partly explain this situation. On its part, the ICB is reportedly prepared to provide Taka 5.0 billion for the fund. The rest were to be provided by the state-owned banks, the state-owned Sadhran Bima Corporation (SBC) and Jiban Bima Corporation (JBC) and some other financial institutions. It is yet not clearly know how much they have agreed to provide for this fund, finally. The pension fund for government employees was also expected to contribute to the fund. But some banks have already been reported to be lukewarm about making any substantial contribution to it. It will be foolhardy to ignore the reasons for that. No bank should risk its depositors' money to any large extent in the currently risky share market. This should equally apply to the insurance companies, though they may be state-owned, because it will be no wisdom on their part to be too generous about making 'investment' through such fund, risking the real or potential claims of their policy-holders. It is not yet known how the pension funds will go for making any such investment without having an appropriate legal framework. This leaves the ICB as only would-be promoter of the fund, in any real sense. But the question that cannot help but arise is : why the government is so keen about taking extraordinary initiatives by pushing the country's banking and insurance sectors and all others concerned, towards great risks only to prop up a share market that is yet to come out of its gridlock, largely on account of foul operations and free-wheeling deals by some powerful big operators. Even common sense says that the share market should be allowed to go on its own way and tackle its own structural and other problems. But on the plea of shoring it up, the real economy or the greater part of it ought not to be exposed to dangers. But government's attitude and activities so far seem to be one of taking responsibility for even many 'unfair' activities in the market that have led to its present state of things. It (the government) has nothing to do about making up for the loss of the investors there, with people's money. Surely, this is anything but good economic governance. Rather, good governance demands that the government should strengthen the regulatory authority in the capital market and facilitate it to function properly and efficiently, without showing any favour to any group of manipulators, on real or perceived grounds. The government should be all too serious about bringing to book the wrong-doers, if there are any, in the market who have been trying to have a joy-ride at the cost of the ordinary investors.