The big, medium and small investors are expected to get benefits soon from the capital market as the government has taken various steps to give support to the bourses.
Initiatives have already been taken to enlist state-owned enterprises (SOEs) in the capital market to expand its size and creating newer scopes for investments in the share market, said a Finance Ministry press release.
If those SOEs are enlisted in the capital market, then the enterprises would have to exercise corporate practices and thus they would have to publish information on their business operations regularly paving the way for ensuring transparency and accountability, it added.
“The government is hopeful that with the enlistment of the state-owned enterprises in the capital market, the depth of the capital market would be further deepened while the capital base of the state-owned companies would be further strengthened,” said the Finance Ministry release.
It said that the government would consider the issues of those investors who were affected over the years due to poor state of the market as well as the market manipulation and thus provide them some facilities.
The release said that during the last 15 years of the fallen Awami League government, there were unbridled looting in the capital market like other sectors of the economy.
During this time, numerous weak and almost non-existent companies were listed with the capital market and these companies have now become a burden for the capital market.
Gradually the true face of these companies is being revealed. On the other hand, the unbridled manipulation of the market has led to the massive increase in the share prices of weak fundamental junk companies, and thus snatching away of ordinary investors' money.
Besides, attempts were made to cover up this market condition with various artificial measures such as imposition of floor price, upper and lower limits of circuit breakers, it said.
But now, in absence of that artificial effort, the inevitable consequences of continuous irregularities, corruption and manipulation are becoming more evident than before.
The government has formed a 'Search and Investigation Committee' to investigate the irregularities, manipulation and corruption of the past in order to stabilize the capital market, protect the interests of investors and restore confidence.
A five-member taskforce has been formed to recommend capital market reforms to improve capital market, increase investors’ confidence and ensure good governance of international standards.
The scope of work of the capital market reform taskforce, formed by the Bangladesh Securities and Exchange Commission (BSEC), has been determined to a total number of 17.
These are reforming the regulatory framework, ensuring regulatory compliance and institutional governance, technological development and modernization, taking effective steps to develop products and market in the capital market, expanding and increasing the scope of investment education, increasing the awareness of investors, strengthening education and training programs to increase the capacity of professionals working in the capital market, bringing newer products to ensure diversification of the market.
The BSEC has been working on some reform activities such as bringing new products, increasing investors’ confidence and carrying out constructive and sustainable reforms of the capital market.
Beyond the taskforce’s activities, the work for creating a road map for the overall development and reform of the capital market has started through discussions with the stakeholders.
Through the discussion with the participants, various recommendations have emerged regarding the various problems and actions of the market.
The government is optimistic that the recommendations which are acceptable in the interest of the market are implemented after scrutiny, and then investors will be benefitted in the long term.
The BSEC has also sought cooperation from the World Bank for developing its surveillance system to boost market monitoring and controlling capital market manipulation.
The regulatory body BSEC has taken the initiative to increase the supply of good fundamental shares in the capital market. As part of this, the BSEC is holding a series of meetings with major industrial groups.
The commission is working on various issues including long-term financing through the capital market, valuation of companies in case of listing, simplification and speedy execution of the process for IPO approval and listing.
The listing of companies with important strong fundamentals in different sectors will strengthen the country’s share market at one hand, and on the other hand, an opportunity will be created to accelerate the speed of industrialization and development of the country through further development of these different sectors as a result of financing through the capital market.
In this regard, with the aim of listing companies with good fundamentals in the capital market, initiatives are being taken to ensure that companies get reasonable value through the reforms of the Public Issue Rules 2015, which will help in the listing of companies with good fundamentals including multinational companies.
