Regulator ask stakeholders to support market after removal of floor price

The securities regulator has sought all-out support from stock brokers and merchant banks to set a comprehensive plan for making the capital market vibrant again after the withdrawal of the floor price.

At a meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC) on Thursday, the intermediaries were asked to take preparations for supporting the market, with leaders of the DSE Brokers Association of Bangladesh and the Bangladesh Merchant Bankers Association present there.

"The BSEC has requested us to work jointly so that the market remains alive after the floor price removal," said Saiful Islam, president of the brokers association.

The securities regulator held a separate meeting on Thursday with representatives of the Association of Bankers, Bangladesh (ABB).

There, BSEC Executive Director Mohammad Rezaul Karim said the banks had the scope of enhancing their investments in the capital market within the stipulated limit.

"The bankers have assured us of their support to make the market vibrant after the national election," Mr. Karim told the FE.

Before these two meetings with stakeholders, BSEC Chairman Shibli Rubayat-Ul-Islam sat with the chairman of the National Board of Revenue (NBR) at his office.

The BSEC chairman urged the NBR chief to take capital market- friendly tax policies, including incentives, in the upcoming budget, Mr. Karim said.

As part of the regulatory move, the Capital Market Stabilisation Fund (CMSF) on Thursday decided to disburse Tk 1 billion to market intermediaries in loans for boosting the liquidity flow in the market.

In an emergency meeting, the CMSF board approved the decision of delivering the fund through a designated bank.

It is expected that the securities regulator will lift the floor price after the national election to be held on January 7.

Due to the floor price, a majority of the listed securities have remained stagnant and many shareholders have been unable to sell shares in the absence of buyers.

A section of investors may exert selling pressure following the withdrawal of the floor price.

Merchant bankers and stock brokers were asked to help ease the selling pressure and advised to inject own investments through dealer accounts.

The lenders should also provide margin loans to their clients based on the availability of funds.

At the same time, the market operators were asked to help create an upbeat sentiment about the market.

However, merchant bankers and brokers unanimously said the market should be allowed to move based on its own strength.

Preferring anonymity, a meeting participant said that how to exit from the floor price had been discussed.

Some of the market operators spoke in favour of removing floor price from all securities at once while others suggested doing so in phases.

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