The interim government of Bangladesh will give incentives for encouraging both large private and public firms to get listed in the stock market, according to Finance Adviser Salehuddin Ahmed.
“This would boost the market base,” he said while speaking during a discussion on the current market condition at the Dhaka Stock Exchange (DSE) yesterday.
Ahmed said good companies are typically uninterested to enter the stock market as their owners prefer to place close relatives in senior positions such as chairman and managing director to keep most profits for themselves.
Doing so would have been otherwise impossible if the companies were listed as their shareholders would then be able to vote on who to appoint.
“So, the depth of the stock market is very low,” he added.
The adviser said good companies are typically uninterested to enter the stock market as their owners prefer to place close relatives in senior positions
Ahmed also said that being listed with the stock market would mean these companies have to show good corporate governance.
“But many of them do not want to face questions [regarding their management]. So, they are not interested to come to the market,” he added.
Against this backdrop, the finance adviser suggested that time has come to deepen the market.
“For this, good companies should be brought in the market. To this end, the government will consider giving policy support, including tax benefits,” he said.
“The government has taken initiatives to bring some public companies to the market,” Ahmed added.
Ahmed also urged all the relevant authorities, including the DSE, to take initiatives for increasing the investments of expatriate Bangladeshis in the domestic stock market.
“The Indian stock market has a large investment from expatriates. Many of non-resident Bangladeshis also have the ability to invest. So, they should be encouraged to invest. For this, the market has to be attractive.”
Regarding the current condition of the stock market, Ahmed said the government has taken some reform activities for its betterment.
“All reforms cause some temporary pain. Therefore, the same can be expected from the share market reform programme. Still, the interim government wants to strengthen the stock market,” he added.
Ahmed also said that an economy dependant on bank loans is not a sustainable one.
“Everybody becomes happy when stock indices increase but they should remain cautious in times the market goes higher,” he added.
Khondoker Rashed Maqsood, chairman of the Bangladesh Securities and Exchange Commission, Mominul Islam, chairman of the DSE, Saiful Islam, president of the DBA, and representatives of the Bangladesh Bank, National Board of Revenue, Chittagong Stock Exchange, merchant bankers, asset managers, and other stakeholders were present at the event.