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CSE places proposals on capital market

Published: February 07, 2018 10:48:25 | Updated: February 08, 2018 11:05:17


In the wake of free-fall of the country's stock markets, the port city's bourse has come up with a four-point recommendation to improve the situation.

The proposals sent to the Ministry of Finance (MoF) on Tuesday include reviewing the banks' exposure limit on capital market and forming a national coordinating committee which will work for the development of the capital market, sources said.

The Chittagong Stock Exchange (CSE) also recommended strengthening the capacity of the state-run Investment Corporation of Bangladesh (ICB) so that it could support the capital market effectively.

The bourse also underlined closer coordination among the Bangladesh Securities & Exchange Commission (BSEC), Bangladesh Bank and the Ministry of Finance while taking any decision regarding the capital market.

The Banking Companies Act 1991, which was amended in 2013, has limited a bank's stock market exposure to 25 per cent of its capital. The capital includes paid-up capital, share premium, statutory reserve and retained earnings.

The banks, which are considered major institutional investors, squeezed their ability to invest in the capital market in recent times.

The CSE also suggested calculating the banks' total exposure to the stock market without taking into account their investment in non-tradable and non-listed securities, such as investment in preference share or bond and subsidiaries.

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