The Ministry of Finance has informed about the initiatives taken by the government to restore confidence in the capital market. They say that as a result of these initiatives, large, medium and small investors of the stock market will get quick benefits. The government will consider the matter and provide benefits to those who have suffered through the past droughts and share scams.
This information was informed in a press release sent by the Ministry of Finance on Sunday (October 20).
In a press release signed by Gazi Tauhidul Islam, Information Officer of the Ministry of Finance, it is said that during the last 15 years of the fallen Awami League government, like other sectors of the economy, there has been unrestrained looting in the capital market. During this time numerous weak and almost non-existent companies were listed on the capital market. These companies have become a burden for the capital market today.
On the other hand, unbridled manipulation of this market has led to huge increases in the share prices of weakly-founded, junk companies, siphoning off ordinary investors’ money. Attempts have been made to cover this market condition by various artificial measures such as imposition of floor price, upper and lower limits of circuit breakers. But now that there is no such artificial effort, the inevitable consequences of continuous irregularities, corruption and manipulation are becoming more clear than ever.
An ‘Enquiry and Investigation Committee’ has been constituted to investigate and investigate the past irregularities, manipulation and corruption to stabilize the capital market, protect the interests of investors and restore confidence, it added.
The Ministry of Finance said that a five-member task force 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 task force formed by BSEC has been determined to be 17. Reforming the regulatory framework, ensuring regulatory compliance and institutional governance, technological development and modernization, taking effective steps to develop products and markets 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, diversification of the market. BSEC is working on reform activities such as bringing new products, increasing investor confidence and constructive and sustainable reform of the capital market.
Apart from the task force activities, the work of 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 hopeful that the recommendations which are acceptable in the interest of the market, if they are implemented after scrutiny, will benefit the market in the long term. BSEC has sought cooperation from the World Bank in the development of surveillance system for capital market supervision and control of manipulation.
The press release also said that the regulatory body Bangladesh Securities and Exchange Commission (BSEC) has taken initiatives to increase the supply of well-founded shares in the capital market. As a part of this, BSEC is holding regular meetings with major industrial groups. The commission is working on various issues including long-term financing through the capital market, valuation of companies in the case of listing, simplification and speedy execution of the process of IPO approval and listing. The listing of companies with important strong fundamentals in different sectors in the country’s capital market will strengthen the country’s capital market on the one hand, on the other hand, as a result of financing through the capital market, an opportunity will be created to accelerate the speed of industrialization and development of the country through the further development of these different sectors.
For this purpose, with the aim of listing well-founded companies in the capital market, initiatives are being taken by reforming the Public Issue Rules 2015 so that the companies get a reasonable price, which will help in the listing of well-founded companies including multinational companies.
In order to increase the size of the country’s capital market and create new opportunities for investment, government institutions have been enrolled. Institutions are required to practice corporate governance when listed on the capital market. Regular disclosure of information on business activities will ensure transparency and accountability. The government is optimistic that the listing of government-owned companies will deepen the capital market and strengthen the capital base of government-owned companies.
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