OTC firms look for way to return to main market
Asaduzzaman Pallab | Wednesday, 9 March 2011
Asaduzzaman Pallab
The companies, which are listed with the Dhaka Stock Exchange 'over the counter' (OTC) market, are acutely feeling the absence of specific guidelines to make a return to the 'main market', popularly known as the secondary one of the capital market. Due to poor financial performance and non-compliance of the rules, DSE (Dhaka Stock Exchange) authorities have shifted some companies to the OTC market from the main market in October 2009. At present, 63 companies are listed with the DSE OTC market for non-compliance with the existing rules including failure to hold Annual General Meetings (AGMs), failure to declare dividends and failure to complete 'demat process' of the paper shares. OTC companies cannot trade in the regular secondary market. Due to the complexity in the existing rules, trading volume of OTC market is very insignificant. According to market insiders, investors of the OTC companies are the biggest losers in the existing law as their capital has been stuck up as they cannot trade on regular basis. Market insiders said, non-performing companies have been allowed listing with the OTC market. To protect the investors' interest, the stock exchange should introduce a 'secondary board' to facilitate regular trading of OTC companies. In this context, the stock exchange authorities should have a separate guideline for OTC companies, they feel. Salahuddin Ahmed Khan, a market analyst, said that given the way the OTC market is operating now, it is not possible to protect the general investors' interest. For regular trading of OTC companies, there should be a 'secondary board'.
The companies, which are listed with the Dhaka Stock Exchange 'over the counter' (OTC) market, are acutely feeling the absence of specific guidelines to make a return to the 'main market', popularly known as the secondary one of the capital market. Due to poor financial performance and non-compliance of the rules, DSE (Dhaka Stock Exchange) authorities have shifted some companies to the OTC market from the main market in October 2009. At present, 63 companies are listed with the DSE OTC market for non-compliance with the existing rules including failure to hold Annual General Meetings (AGMs), failure to declare dividends and failure to complete 'demat process' of the paper shares. OTC companies cannot trade in the regular secondary market. Due to the complexity in the existing rules, trading volume of OTC market is very insignificant. According to market insiders, investors of the OTC companies are the biggest losers in the existing law as their capital has been stuck up as they cannot trade on regular basis. Market insiders said, non-performing companies have been allowed listing with the OTC market. To protect the investors' interest, the stock exchange should introduce a 'secondary board' to facilitate regular trading of OTC companies. In this context, the stock exchange authorities should have a separate guideline for OTC companies, they feel. Salahuddin Ahmed Khan, a market analyst, said that given the way the OTC market is operating now, it is not possible to protect the general investors' interest. For regular trading of OTC companies, there should be a 'secondary board'.