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The Investment Corporation of Bangladesh (ICB) has proposed creation of a Tk 50-billion 'market support fund' to help make the stock market stable.
Sources said the corporation made an appeal to the finance ministry amid volatility now prevailing in bourses.
Investors are now having low confidence in the market.
Last Wednesday, the turnover at the country's prime bourse, Dhaka Stock Exchange (DSE), came down to Tk 3.53 billion, hitting a fresh three-month low.
Many see it as an instance of investors' reluctance to stake new funds on stocks.
The ICB recently floated a Tk 20-billion bond. Of the money, Tk 13.90 billion was subscribed.
Until March 18, some Tk 12.36 billion was invested in the bourses.
On November 06, 2018, the DSEX index was at 5,204 points which rose to 5,950 points on January 24 this year after the money from bond was invested.
However, the market later saw a downward trend and the DSEX index went down to 5,505 points last Thursday.
Sources said ICB directors at a board meeting sought sizeable funds to infuse new life into bourses at a time when investors are unwilling to inject fresh funds.
The board observed that such a market support fund could be formed by borrowing money from the government exchequer at a low interest rate.
The state entity would be able to use the fund for the interest of stock market, the directors said.
ICB managing director Kazi Sanaul Hoq wrote to the finance ministry last week, denoting their ongoing work to add fillip to the bourses.
In the aftermath of the 1996 and 2010 ups and downs, the ICB invested a hefty amount to restore stability in the bourses and create investors' confidence, he said.
The ICB's investment in the bourses was at Tk 7.35 billion in June 2009 which rose to Tk 105.70 billion in June 2018.
There are no ICB-like big companies that can make long-term investment in the bourse, Mr Hoq argued.
As a result, the corporation fails to retrieve money from the market by selling stocks.
The ICB's term deposit rose to Tk 108.41 billion in June 2018 from Tk 22.71 billion in June 2011.
"There should be coordination between fund and securities supply to keep mobility in the bourses," Mr Hoq added.
He further said that steps have to be taken to bring good stocks in the market, including multinational companies and local big shots.