Dhaka bourse moves to deepen capital market listing MNCs, SoEs

Rezaul Karim | Published: July 31, 2017 09:42:56 | Updated: October 24, 2017 23:05:04

Dhaka Stock Exchange (DSE) has taken a fresh initiative to list more companies, especially the multi-national companies (MNCs) and state-owned enterprises (SoEs), for making the market more vibrant and stable, officials said.

It proposed the finance ministry late last week to take measures so that the SoEs and MNCs offload their shares in the country's capital market, they said, arguing that it would help deepen the market and mitigate vulnerability.

The premier bourse put forward the proposal on the following day after Finance Minister AMA Muhith asking the SOEs at a meeting on Wednesday last to speed up their efforts in offloading the shares.

The MoF would again sit with the SoEs in December next to follow up the development in this regard.

The government, stakeholders and market analysts had long been talking about the need for bringing stocks of more companies in the market, but the SoEs, MNCs and other foreign companies remain not so responsive.

Only 13 MNCs operating in the country are listed with the two bourses while only eight SoEs offloaded their shares in the market in an effort since 2009.

"If the set of proposals are implemented, the stock market will be more vibrant," DSE managing director K.A.M. Majedur Rahman told the FE Sunday.

According to the proposal, there are many foreign companies like multi-national banks operating in the country who are licenced for branch operation in the country. In many cases, our regulatory framework does not allow these companies to be incorporated in Bangladesh.

According to the securities laws, an unregistered company cannot approach to capital market either for fund raising or listing, said the DSE boss.

DSE proposed to form two or three committees comprised of representatives from different ministries, Bangladesh Bank (BB), Bangladesh Securities and Exchange Commission (BSEC), other relevant state agencies and the two bourses to recommend, re-arrange and find out ways of bringing more shares in the capital market. 

The proposal mentioned that offloading the shares of SoEs was one of the major policy decisions taken by the present government.

Despite repeated instructions by the Prime Minister and finance minister, offloading certain portions of shares of 26 SOEs still remain uncertain since the initiative taken in 2009.

Besides, a large number of MNCs and foreign companies were running their businesses in the country. But only a few were listed with the stock exchanges.

Many of MNCs and foreign companies were operating in some of the neighbouring countries and also listed in the respective countries' stock exchanges, the DSE proposal mentioned.

Presently, there are a good number of companies registered with the Register of the Joint Stock Companies and Firms in Bangladesh. Around 300 companies are listed in the stock exchanges of the country.

The proposal also pointed out that several reasons were earlier identified behind the unwillingness of the companies to join the capital market-regulatory constraints were also hindering the fund raising companies.

The government was trying hard to get the SoEs shares listed, but the relevant ministries and divisions remain extremely reluctant, said a high official of the bank and financial institutions division.

Besides, progress in divesting the SoEs themselves was found disappointing, he added.

Meanwhile, the government had discussions to list the MNCs and other foreign companies with the stock market.

"We are working on the issue. No major progress has so far been made," a high official of the BSEC said.

The MNCs and foreign companies were not listed with the stock exchanges at an expected level, an official at the MoF said, adding that it was less than those in India and Pakistan.

He said the latest move would help make the country's stock market vibrant if it is shaped finally. "It's high time for listing the new MNCs as the bourses are performing well now."


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