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The government-formed Bangladesh Capital Market Sustainable Development Committee has started its work to streamline the stock market by identifying the challenges and potential improvement methods, officials said on Thursday.
The committee is likely to hold its first meeting next week and devise its work plan to prepare possible policy recommendations for improving the struggling stock market, said Financial Institutions Division (FID) officials.
"We are now at the formation stage of the 10-member committee. We have sought representatives from the authorities concerned for our committee. Hopefully, the full committee can sit together for a meeting next week," said a senior FID official.
"After preparing our action plan at the meeting, we will hold meetings with key partners, including the Dhaka Stock Exchange (DSE), the Chittagong Stock Exchange (CSE), regulators, banks, financial institutions, brokerage houses, investors, issuers, and various companies, to identify the challenges and the way forward," he added.
On February 3, the FID formed the committee, headed by its Secretary Nazma Mobarek, to streamline Bangladesh's limping stock market.
A National Board of Revenue (NBR) commissioner; a Bangladesh Bank (BB) director; a Bangladesh Securities and Exchange Commission (BSEC) executive director; representatives from the Bangladesh Insurance Development Authority (BIDA), the Microcredit Regulatory Authority (MRA), and the Financial Reporting Council (FRC); DSE Chairman Mominul Islam; and CSE Chairman AKM Habibur Rahman are the committee members.
FID Joint Secretary (Capital Market) Dr Delwar Hossain has been made the committee's member secretary.
Following a meeting with the BSEC beneficiaries in January this year, Finance Adviser Dr Salehuddin Ahmed instructed the FID to constitute the development committee to strengthen the stock market.
According to the terms of reference, the committee will recommend policies to overcome the stock market's vulnerabilities and improve the market.
Besides, it will identify market risks; find out the potentials of integrated development of the stock market and money market, including commercial banks; exchange information among the regulatory authorities; establish good governance; check financial corruption; and make policy recommendations in line with international standards.
Despite the government's various efforts, the capital market is not improving. Rather, it has been going through a rough patch over the years. Besides, lots of regulatory failures and manipulations further weakened the market.
Analysts said the Bangladesh economy failed to reap benefits from the capital market due to its weak regulatory framework and dishonest interventions by some players.
Another government official said it is a big concern that the number of beneficiary owner (BO) accounts and initial public offerings (IPOs) have been declining over the last few years in a big economy like Bangladesh.
"We will try to identify the challenges, IPO obstructions, and the marketing system in our meetings with the relevant authorities and investors," he said.
"We will also emphasise governance issues in the capital market management so that it can function properly," added the official.
The stock market has experienced significant fluctuations since the 2010 crash, reflecting a challenging macroeconomic and political environment.