FE Report
A high-powered committee formed by the finance ministry has recommended shifting long-closed, loss-making, and non-dividend-paying companies from the main board of the stock exchanges to a separate trading platform.
The stocks would be labelled under a new 'R' category.
The move aims to curb abnormal price hikes and market manipulation involving fundamentally weak stocks, according to sources at the Ministry of Finance and the Bangladesh Securities and Exchange Commission (BSEC).
The four-member committee, led by Anisuzzaman Chowdhury, special assistant to the chief adviser, submitted its report in November last year with the recommendation.
Speaking to The Financial Express, Chowdhury confirmed the proposal, saying that transferring failing stocks to a separate platform would help restore market discipline and investor confidence.
"People lost their money on bad companies, so we think this may help," Anisuzzaman Chowdhury told The FE.
Alongside the new category, the committee has also proposed creating a special fund of Tk 100 billion to boost market liquidity and provide low-interest loans to small investors, he said.
Under the proposal, trading in 'R' category shares would be subject to stringent restrictions. Shares purchased in this category could not be sold for at least one month, while the settlement period would be extended to seven days. The committee advised the Financial Institutions Division, the BSEC, and the Dhaka and Chittagong stock exchanges to implement the rules expeditiously.
According to Dhaka Stock Exchange (DSE) data, of the 397 listed companies, 205 are in the 'A' category, 82 in 'B', and 110 in the 'Z' category.
The committee observed that many 'Z' category companies have remained closed for years, yet their share prices are periodically driven up through manipulation.
At present, at least 32 listed companies have remained out of production for a prolonged period, the report noted. The committee stressed the need for a structured exit plan for such firms.
If introduced, the new 'R' category is expected to bring greater stability to the main market and help rebuild investor confidence, the committee said.
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