Capital market refinancing scheme: Injection of Tk 3.0b into stocks soon

Bourses on bounceback feeding on rescue doles

MOHAMMAD MUFAZZAL | Tuesday, 24 May 2022

Trade operators are set to receive around Tk 3.0 billion in immediate injection from the capital-market refinancing scheme worth 10.09 billion, amid government intervention to stimulate the bourses.

The supervision committee on the stock-market refinancing scheme sits today (Tuesday) to discuss how to speed up its operations and make it effective for propping up the bearish stock market.

"We are optimistic about disbursing an amount of Tk 3.0 billion from the refinancing scheme among market operators soon," says Mohammad Saifur Rahman, an executive director of the securities regulator.

Mr Rahman, who also heads the supervision committee, informs that their committee has called an emergency meeting to be held today (Tuesday).

Representatives of the central bank, the Investment Corporation of Bangladesh (ICB) and the Bangladesh Securities and Exchange Commission (BSEC) will attend the meeting.

The meeting has been convened a day after the government extended the tenure of the capital market scheme till December 2027.

The supervision panel has urged the government to make the refinancing scheme, which was introduced after the 2010-11 stock-market debacles, perpetual.

"Instead of making the scheme perpetual, the government has extended its tenure," says Mr Rahman.

Meanwhile, BSEC Monday received a letter from the central bank regarding the extension of the capital-market refinancing scheme.

The government launched the scheme worth Tk 9.0 billion in 2013 for the small investors who were affected by the 2010-11 market crash.

Of the Tk 9.0 billion, the state-run ICB earlier received Tk 8.56 billion from the central bank based on the demand of market operators, and the tenure of the scheme was extended several times.

The scheme received an interest worth Tk 1.53 billion from the funds worth Tk 8.56 billion disbursed among market operators such as stockbrokers and merchant banks.

On Monday, the government extended the tenure of the scheme pumping in Tk 1.53 billion to add up to Tk 8.56 billion.

The government moves came following eight days relentless fall in the share prices that caused the prime index of the Dhaka Stock Exchange to tumble to an 11-month low on Sunday.

However, as the news of fund infusions flew in, DSEX, the prime index of the Dhaka Stock Exchange (DSE), soared 118.86 points or 1.93 per cent in a rebound to settle at 6,261 on Monday, after losing 556 points in the past eight consecutive days.

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