BSEC comes up with package to salvage Bangladesh’s stock market

BSEC comes up with package to salvage Bangladesh's stock market
BSEC comes up with package to salvage Bangladesh's stock market

BSEC comes up with package to salvage Bangladesh’s stock market

The securities regulator steps in with a set of measures, including funnelling special funds to enhance liquidity flow into the stock market, to salvage it from an ongoing freefall.

Officials said the Bangladesh Securities and Exchange Commission (BSEC) decided to pave the way for reinvestment of the market- stabilisation fund worth Tk 9.0 billion, formed after the 2010-11 stock- market crash.

The regulator discussed its market-supportive measures in a meeting with top brokers at the BSEC office on Tuesday.

The regulatory move comes following continuous correction which forced the broad index of Dhaka Stock Exchange (DSE) to lose 347.37 points in last seven sessions in a row.

“We have discussed some additional supports that can help stabilise the stock market overcoming the present situation,” said Dr Shaikh Shamsuddin Ahmed, a BSEC commissioner.

As per the decisions taken Tuesday, the securities regulator would disburse the Tk 9.0 billion worth of market-stabilisation fund to the market operators to enhance liquidity flow.

After the 2010-11 stock-market debacle, the government disbursed funds for the special fund in three installments.

“We have already realised the fund with interest. The government has no objection to further disbursement of the fund among the market operators,” the BSEC commissioner said.

Mr Ahmed noted that the government has extended the tenure of the market-stabilisation fund for five more years.

As per another decision, the market operators would be facilitated to issue corporate bonds for increasing liquidity flow in the bourse, which slipped on the slope after reaching recent record highs.

“The BSEC will help the market operators in case of issuing corporate bonds,” said Mohammad Rezaul Karim, a BSEC spokesperson.

He also said the banks would also be requested to support the market with their special fund worth Tk 2.0 billion each, approved earlier by the central bank.

On February 10, 2020, the banks were allowed to create the special fund worth Tk 2.0 billion each only for investment in the capital market.

“In the next coordination meeting, the BSEC will seek market supportive roles from the central bank so that the banks come forward to support the market within their exposure limit,” added the BSEC spokesperson.

In Tuesday’s meeting, the stockbrokers were also suggested to issue bonus shares without issuing cash dividends to enhance their capital base.

Officials of the securities regulator as well as representatives of the stockbrokers and the merchant banks also discussed the rumours that panicked investors recently.

Asked, president of DSE Brokers Association (DBA) Sharif Anwar Hossain said a group of unscrupulous people are spreading rumours with ill motives.

“General investors are getting panicked over the rumours, which leave a negative impact on the market. In the meeting, it was decided that these unscrupulous persons will be identified and brought to book,” the DBA president added.

The BSEC commissioner also said they would look into the rumours that were spread recently.

A fresh rumour spread on Tuesday that the securities regulator’s chairman resigned, according to market operators.


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