Bangladesh
5 years ago

Intermediaries urge BSEC to help solve pending issues

Banks' exposure to capital market dominates meeting of securities regulator, stakeholders

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The intermediaries of the capital market have requested the securities regulator to facilitate implementation of their demands, including revision of the banks' exposure to the stock market.

They also requested the Bangladesh Securities and Exchange Commission (BSEC) to look into some recent issues like 'no' dividend recommendations by some good companies which left negative impact on the capital market.

To put forward their demands, the market intermediaries held a meeting with the securities regulator in the capital on Thursday.

Representatives of Dhaka Stock Exchange (DSE), Investment Corporation of Bangladesh (ICB), Bangladesh Merchant Bankers Association (BMBA) and DSE Brokers Association (DBA) attended the meeting, chaired by BSEC Chairman Professor M. Khairul Hossain.

The BSEC commissioners and executive directors were also present at the meeting that also discussed the ongoing market situation.

The market intermediaries said their demands, which have been remained pending with the Bangladesh Bank, should be implemented for bringing long term stability in the capital market.

The BSEC assured the meeting of holding talks with the government so that the pending demands are implemented.

According to meeting participants, the stakeholders' demand included excluding the investments made in the bonds, subsidiary companies and green fields from the banks' exposure to the capital market.

"Another demand is to calculate the banks' exposure based on mark-to-mark basis instead of market price of the securities," a top BSEC official said.

In a letter to the central bank, he said, the finance minister earlier had recommended resolving the issues, including revision of the banks' exposure to the capital market.

"But the central bank is yet to implement the stakeholders' demands," he added.

The official said the central bank should resolve the pending issues for the sake of the capital market. "We will also talk to the government for solving the pending issues," he said.

Mostaque Ahmed Sadeque, the DBA president, said 'no' dividend recommendations made by some companies despite having good EPS have left a negative impact on the capital market.

He said those companies disbursed good dividend in the previous year.

"But the companies entered into 'Z' category recently from 'A' category due to recommending no dividend. We have requested the securities regulator to look into such issues which are affecting the market," he said.

The listed companies with June year-end started recommending dividends for the year ended on June 30, 2018.

Recently, two 'A' category companies have recommended 'no' dividend for the year ended on June 30, 2018.These companies have been shifted to 'Z' category.

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