The Financial Express

Push for listing of MNCs with Bangladesh stock market

| Updated: November 01, 2020 15:44:14

Lankabangla and Fianancial Express Lankabangla and Fianancial Express
Push for listing of MNCs with Bangladesh stock market

The securities regulator is seeking ways to get the multinational companies (MNCs) listed publicly in order to enhance the depth of the capital market.

At a meeting on Thursday, the Bangladesh Securities and Exchange Commission (BSEC) laid emphasis on the listing of the MNCs on the country's stock exchanges.

BSEC chairman Prof Shibli Rubayat Ul Islam chaired the meeting attended by the representatives of top stockbrokers, including IDLC Securities and EBL Securities. The meeting was held at the BSEC office in the city.

"The BSEC thinks that the MNCs which have been earning huge profits should be listed on the stock exchanges at fair value to enhance the depth of the market. The regulator will talk to the high-ups of the government about how the MNCs can be listed under a process," said the chief executive officer (CEO) of a leading brokerage firm.

At the meeting, the securities regulator also laid emphasis on protecting the interests of the minority shareholders, he said.

The sponsors of the listed companies sometimes want to take out loans using shares as collateral.

"But the BSEC said sponsors would not be allowed to use shares as collateral for loans if their joint shareholding falls below 30 per cent," the official said, adding that sales of sponsors' shares will also not be allowed if their joint shareholding is less than 30 per cent of the paid-up capital.

He said the securities regulator wants to accelerate the growth and stability in the capital market through ensuring good corporate governance of the listed companies.

At the meeting, the stockbrokers said many of them sometimes have to pay advance income tax (AIT) despite incurring losses.

"The BSEC has said they will sit with the revenue board and discuss how it can play more market-supportive role. The regulator will work towards facilitating the stakeholders," said a representative of another stockbroker.

The issue of offloading of shares by the listed state-owned enterprises also came up for discussion at the meeting.

"The stockbrokers said general shareholders will be deprived if the government issues fresh shares at a higher value," said a stockbroker who joined the meeting.

The CEO of another brokerage firm said they discussed the problems regarding negative equity which is hampering the operation of many lenders.

"We have told the meeting that the negative equity-related problems should be resolved to enhance our market supportive role for the capital market," he said.

"At the meeting, the BSEC has urged the stockbrokers to enhance their market supportive role. The stockbrokers said the problem regarding negative equity should be resolved for the sake of both investors and lenders," said the representative of a top broker.

He said the burden of negative equity has increased day by day as sales of shares in margin accounts earlier were not allowed.

"We told the meeting that the issue of negative equity must be addressed through an individual strategy of lenders. In that case, lenders should be allowed to adjust negative equity," he added.

The stockbrokers said presently the aggregate value of negative equity is around Tk 127 billion in the capital market.

BSEC commissioners Khondoker Kalamuzzaman, Dr Shaikh Shamsuddin Ahmed, Dr Md Mizanur Rahman and Md Abdul Halim were also present at the meeting.

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