Good cos' listing to ensure capital market's development
The capital market won't see significant development unless fundamentally good companies are listed on the stock market, experts said at a roundtable on Saturday.
They also laid importance on the implementation of rules and regulations to ensure good governance for the sake of the market's development.
Their suggestions came at a roundtable on 'Current scenario and outlook of capital market of Bangladesh' jointly organised by Bangladesh Merchant Bankers Association (BMBA) and the Capital Market Journalists' Forum (CMJF).
Bangladesh Securities and Exchange Commission (BSEC) Chairman Prof. Shibli Rubyat Ul Islam, and two former chairmen Prof Faruq Ahmad Siddiqi and Prof M Khairul Hossian attended the event.
"The main problem is that good companies are not coming to the market. I think no significant development of the capital market will be ensured until the good companies get listed," said former BSEC chairman Prof Faruq Ahmad Siddiqi.
One of the reasons behind the companies not getting listed is that they can easily get bank loans within one month and in some cases they face no problem even after not repaying the loans, he said.
"These companies also get the chance of rescheduling loans. They will prefer bank loans as long as they will have access to long-term liquidity," said Mr. Siddiqi.
He said only some 10 good companies were listed in the last 10 years and the scope for listing of the 'green' and infrastructure companies is also not visible.
Former BSEC chairman Prof. M Khairul Hossain said there are many weaknesses in the capital market.
"Our market cap-to-GDP ratio is very low and the financing from the banks is much higher than from the capital market," he said.
He laid importance on enacting laws and the government's supports as well as creating awareness among the entrepreneurs about raising funds from the capital market.
In his speech, BSEC chairman Prof. Shibli Rubayat Ul Islam sought support from the central bank and the revenue board in an effort to enhance the government's revenue from the capital market.
"We don't want to force the companies to go public. We want to motivate them. We recently sat with some good companies which will go public," he said.
He also said the country's market cap-to-GDP ratio will reach around 25 per cent following the start of trading of the T-bonds on the stock exchange.
Md. Nojibur Rahman, former principal secretary to the prime minister, said a strong political will is working in favour of the capital market.
"The coordination among the central bank, the securities regulator and the revenue board will help the market achieve a sustainable development," he said.
Prof Abu Ahmed, a stock market analyst, said multinational companies are not coming to the stock market although they are making good profits over the years.
Chairman of Dhaka Stock Exchange (DSE) Md Eunusur Rahman said that only the financial literacy would not bring good result unless good governance is ensured in the market.
Zahid Hasan, a member of national Board of Revenue (NBR), Asif Anwar, chairman of the Chittagong Stock Exchange (CSE), Md Sayadur Rahman, president of BMBA, Dr Azazul Islam, an executive director at the central bank, Dr Mohammad Helal, a professor at the University of Dhaka, and Richard D' Rozario, president of DSE Brokers Association, among others, also spoke at the programme.
Md Moniruzzaman, managing director of IDLC Investments, presented the keynote paper at the programme moderated by the CMJF president Ziaur Rahman.