BSEC looking at ways to attract high-quality companies

The stock market regulator is looking at ways to attract high-quality companies to the capital market, but textile sector companies see problems with the listing regulations.

One of the major barriers to the stock market development in Bangladesh is the lack of profitable companies.

To address this issue, the new leadership of the Bangladesh stock market watchdog is engaging with local conglomerates.

On Monday, leaders of the Bangladesh Securities and Exchange Commission (BSEC) met with Chittagong-based local conglomerates to encourage them to list on the market.

Chittagong, known as the commercial capital of Bangladesh, is home to many big industries.

The BSEC met with companies such as PHP Group of Companies, BSRM Group of Companies and Pacific Jeans Group and others based in Chittagong.

PHP Group has a very large portfolio, including steel mills, Glass mills, spinning mills, Automobile, Fisheries and Agro products, while BSRM group is a major player in Bangladesh’s steel market and Pacific Jeans Group is a pioneer in the country’s denim industry.

BSEC leaders visited Chittagong to hear the views of these companies regarding their listing on the capital market.

The founder of Pacific Jeans Group, Mr M Nasir Uddin said there are problems with the listing regulations of the country.

According to him, the regulations governing the use of funds raised from the general public are contradictory with their requirements.

Denim manufacturers like him require funds to purchase raw materials and pay labour when they receive orders. Therefore, working capital is their priority. However, current listing regulations prohibit the use of the entire IPO proceeds as working capital, as there were cases companies raised funds from the capital market and invested in non-revenue generating assets, leading to company failures and investor losses.

To prevent such issues, the listing regulations in Bangladesh include some defense mechanisms.

BSEC assured that they will consider these problems.

Bangladesh's capital market has grown poorly over the last 16 years due to faulty market mechanisms and lack of product diversification. Increasing the number of good stocks is seen as a great way to address these problems.

The meeting took place in Radisson Blu Hotels & Resorts in Chittagong.

Chairman of BSEC Khondoker Rashed Maqsood, Commissioner Md Mohsin Chowdhur, Md Ali Akbar and Ms Farzana Lalarukh, among others from the regulator, participated in the meeting.

Chairman of BSEC Khondoker Rashed Maqsood stated at the meeting that BSEC is really serious to include good companies in the country’s capital market.

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