Coordination committee for developing market into long-term fund source

The central bank governor and the chief of the securities commission have come to a consensus to form a coordination committee to work on developing the capital market into a source of long-term financing.

Chairman of the Bangladesh Securities and Exchange Commission (BSEC) Khondoker Rashed Maqsood met Bangladesh Bank Governor Ahsan H. Mansur at the central bank on Thursday to discuss the matter, according to a press release.

The coordination committee will consist of officials from the Ministry of Finance, Bangladesh Bank and BSEC. It will work both on the equity market and the listed bond market.

BB Deputy Governor Dr. Md. Habibur Rahman and advisor to BB governor Mr. Ahsan Ullah along with other high officials of the BB attended the meeting.

With BSEC Chairman Mr Maqsood were BSEC Commissioner Farzana Lalarukh and other BSEC high officials.

They talked at length about how to help the market flourish so it can become a reliable source of long-term financing.

In Bangladesh, the banking sector has been prioritised over the capital market for long-term borrowings, creating a maturity mismatch in the financial system. This imbalance has led to the erosion of assets in some banks and has stunted the capital market.

Chief Adviser of the interim government Prof Muhammad Yunus in a meeting last month recommended developing the capital market for long-term financing.

The meeting between BSEC officials and the chief advisor yielded five strategically important points for the development of the market.

Mr Yunus suggested offloading shares of well-performing state-owned companies and of multinational firms, such as Unilever, to the public. He also said non-listed profitable companies should be offered incentives to go public.

He also ordered hiring of foreign experts within three months to implement effective reforms in the market and strict punishment for those involved in corruption and market manipulation.

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