Minimum share-holding

Those who read newspapers, watch TV news, and tune in radio programmes after January 2011, are much accustomed to the recurring news-'stocks fall triggers protest.' Because, share prices are falling continuously, but sometimes it gains when market friendly incentives are declared like Bangladesh Fund, black money investment, and bank's investments. However, the prices fall once again when the incentives are not implemented or people make negative comments. In that situation aggrieved investors come out on to the streets to demonstrate, they stop traffic movement, vandalise public and private property, and fast unto death demanding the resignation of finance minister and Bangladesh Bank governor, while police swoop on the investors with all their might, and arrest them in their dozens. This shows the condition of the stock market in the country. In the meantime, level of trust and confidence of investors on the market is waning, though the index shows positive mark following the Prime Minister recent intervention in the market. Some 3.3 million investors are directly and about 10 million people are indirectly involved in the share market. Of them, one third of the investors are holding on and the rest have already left the market after selling their stocks at a loss. Before the situation becomes any worse, the government along with the Securities and Exchange Commission (SEC), the central bank and other stakeholders should take some quick measures to restore investors' confidence and then go for mid-term and long term steps. We now know that the SEC is planning to fix the minimum portion of total share that could be held by the sponsors-directors of firms to be listed in the stock market. A reasonable portion could be 30 per cent of the total stocks. The plan has been welcomed by a Supreme Court lawyer-specialised in company law, who says that due to the lack of certain provision it is not possible to force sponsors-directors to hold the minimum stake in a company. But one big question arises, if it is not enforceable by law, how did the SEC stop share selling by sponsors and directors? Now small investors have no fresh money to invest. Only institutional investors are able to invest in the market, but great liquidity crisis does not allow them to invest more. One may ask the regulators how does a sponsor or a director hold hisher chair in the company holding shares below one or two percent? On the other hand, investors holding more shares than that of such directors do not get directorship. Rationally, the investor who has more stocks of a company, heshe also has more stakes as well as expectation. Having fewer shares or no share, sponsors-directors may have less or no interest in the company management. They are not responsible to generate good profit as their interest is very less. So, we must be careful about what we are saying and what we are doing! Md Habibur Rahman Dhaka University E-mail: habibdu77@gmail.com Bangladesh-India ties There is a realisation shared in the corridors of power in both India and Bangladesh that they should be good neigbours inspired by principles of mutuality or give and take for the benefits of both countries. But there are also forces in both countries who are prone to eyeing each other suspiciously with concern. It would be found also that there are enough reasons for such suspicions, doubt and dislike. These parties or forces also get elected and form governments in the two countries which are seen as not so well inclined to build and sustain yet better bilateral relationships. The point being whether political thoughts and actions should be allowed to be presented in a short-sighted manner to electorates or constituencies or whether governments in the two countries regardless of their labels or philosophies or motivation, should find a common ground now improving relationships between Bangladesh and India. For this there is a need for all not to allow narrow views or misunderstandings to spoil Bangladesh-Indo relationships, to keep always the bigger picture in mind that the two countries need each other and neither will benefit from isolation in relation to the other. Fakrul Alam University of Dhaka