The Investment Corporation of Bangladesh (ICB) has suggested enacting a law, making it mandatory for multinational companies (MNCs) to get listed on the bourses, sources said.
The proposal came in a paper prepared by the ICB as the Ministry of Finance (MoF) sought suggestions about ways to bring the MNCs in the bourses and make the secondary stock market a vibrant one, they added.
Experts opine that due to lack of quality shares, the stock market is not becoming vibrant and stable. Investors are confused and hesitant to make investment as a significant number of issues listed on the bourses have weak fundamentals, they added.
They said MNCs which have been making handsome profits for a long time can help meet the shortage of quality shares on the bourses. Divestment of shares of profit-making SoEs (state-owned enterprises) can also help in this regard.
According to the ICB, presently only 13 MNCs, out of 400, operating in Bangladesh are listed on the two bourses while only eight SoEs offloaded their shares in the markets amid repeated pressure from the government since 2009. These 13 MNCs hold 25 per cent of the total market capital.
As these MNCs pay handsome dividend every year, investors show much interest to invest in the shares of the companies.
Officials said there is no legal obligation that can force the MNCs to get listed on the bourses. However, the government has long been trying to bring the MNCs in the stock market.
The ICB also suggested offering special waiver for the MNCs to bring them in the stock markets. It said the MNCs can be listed on the bourses both by direct listing and initial public offering.
The ICB in its report named MNCs like Chevron, Unilever Bangladesh Ltd, Standard Chartered Bank, HSBC Ltd, Citi Bank N A, Siemens, Ericson, Mobil, Nestle, Avery Dennison, Youngone Corporation, Novartis Bangladesh, Coats Bangladesh Ltd, Grey Advertising Ltd, Asian Paints, ACS Textiles, MCC Transport, Hotel Amari, NewVision Solutions Ltd, RAK Paints, and CP Bangladesh, among others, which can be listed on the bourses.
Officials at the MoF said finance minister AMA Muhtih in late July sat with SoE bosses and asked them to step up their efforts in offloading shares. The minister will sit again with the SoE bosses and officials concerned in December next to follow up the development in this regard.
Meanwhile, the minister also sat with heads of some MNCs and foreign companies last month and discussed the issue of their coming to the bourses. The meeting also decided to seek written recommendations and suggestions from offices concerned on what steps could be taken for quicker enlistment of MNCs in the share markets.
Former chairman of Bangladesh Securities and Exchange Commission (BSEC) Faruq Ahmad Siddiqi told the FE earlier that divestment of shares of profit-making SoEs and listing of MNCs will help strengthen the markets with good shares.
The government will have to take bold steps to attract the MNCs in getting listed on the bourses, he said.
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