Regulator to allow brokers, merchant banks to issue bonds
The capital market regulator is going to allow brokerage firms and merchant banks to raise funds through the issuance of bonds.
The market intermediaries will utilise bond proceeds to invest in the stock market and provide margin loans to investors, said Mohammad Rezaul Karim, spokesperson for the Bangladesh Securities and Exchange Commission (BSEC).
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“We will take steps to enable them to raise funds in order to ensure adequate availability of liquidity in the stock market,” he said after a meeting of the commission where leading stock brokers and merchant bankers were present.
The disclosure comes as the regulator is set to allow direct and indirect investments from a market stabilisation fund.
Part of an around Tk 21,000 crore fund would be used to subscribe to brokerage houses’ and merchant banks’ bonds to support the market indirectly, said Karim.
The BSEC in June passed a rule on formation of a market stabilisation fund using undistributed and unclaimed dividends of listed companies.
The aim is to use the funds to safeguard the interests of the stock market and general investors.
“We recommended the stock brokers and merchant banks not to issue cash dividend, rather to reinvest their profits as they logged higher profits recently,” Karim said.
Responding to a question, he said the market recently dropped due to a profit-availing tendency of investors, so everyone was hoping for the market to bounce back from Thursday.
Rumours are going around the BSEC Chairman Prof Shibli Rubayat Ul Islam is going to resign, which is completely untrue, he added.