Dhaka Stock Exchange (DSE) Chairman Mominul Islam has commented that the country's capital market has contracted a lot in the last 15 years. He said this at the 'CMJF Talk' organized by the Capital Market Journalists Forum (CMJF), an organization of journalists working on the capital market, in Paltan of the capital on Saturday.
Mominul Islam said, 'Our stock market is very narrow. The stock market has lagged a lot in the last 15 years. At the same time, the stock markets of all other countries in the world advanced. In this situation, all the stakeholders of the country are working positively to advance the stock market of Bangladesh.
Stating that the board of DSE is moving forward with long-term and short-term plans, the chairman said, 'It will take some time to get the results of the long-term planning work. Much like the foundation of a building is not visible from the outside. But everyone can see the construction on top of the building. But, the real work is done during the construction of that foundation.'
Emphasizing on keeping the confidence of the investors, DSE Chairman said, 'Everything will fail if we cannot keep the confidence of the investors. A short term plan is being worked on for this. In this case, 4 tasks are given importance. Trying to come up with some good companies in 4 jobs asap. Apart from this, solving the problem of negative equity, giving tax benefits and stopping insider trading. We believe in zero tolerance policy regarding this trading.'
Mominul Islam believes that the capital market has gone backwards due to the unwanted intervention of the regulatory body. He said, 'The role that the stock market was supposed to play in Bangladesh has not happened. We are far behind the level of expectation. Stock exchanges were in trouble. One of these is undue interference by regulatory bodies. Apart from this, the stock exchange has human resource inefficiency and technical problems. And the Demutualization Act also has some limitations. There is no Chartered Accountant in DSE. It is very sad. We are trying to hire chartered accountants.'
In response to a question from journalists, the DSE chairman said, 'Currently our inflation, foreign exchange reserves are not that good. There is a volatility in the banking sector, we hope there is some stability. We have not yet reached the expected state. We are seeing a decline in imports of capital machinery.'
He also said, 'If the real economic investment is not right, then the capital market is a reflection of the whole market. So we have to keep that in mind. We are hopeful that by June we will be able to see a positive trend in the stock market.
Referring to the need to take some steps to reform, the DSE chairman said, 'It should also be seen that the patient does not die during the reformation. An adjustment has been made at one place, on capital gains tax above Rs.50 lakhs. We have some other demands. The Finance Ministry, NBR said, will look at these positively. Secondly, bringing in some good companies will create enthusiasm in the market. Many investors are passive, they will be active. A positive trend will be created.'
He said, 'We have tried to find out the problems of DSE. Already the list of problems is getting long, working on solving them. Brokerage houses that have withdrawn investors' money may be supported from the Investor Protection Fund. Apart from this, funds will be provided to the investors of those houses by selling the assets of the brokerage houses and selling the licenses.
Mominul Islam complained that although the incentive package of the development partners for the banking sector has not come for the capital market, we are trying to communicate with the multinational organizations such as IMF, ADB, so that we can get support from them. This will speed up our renovation works a little. Many support packages are coming for the banking sector of our country. So far no support package has come for capital markets. We want to strongly demand help from the government. The international organizations that are our partners, should look at the capital market, so that our reform works will be a little easier and we can be more capable.
He also said, 'Earlier the primary regulator had to work with the approval of BSEC in all cases. As a result, it became very difficult for DSE to monitor the companies. We have come a long way from this position. DSE monitoring will now increase in weak companies.'
Emphasizing on the delisting of weak companies, Mominul Islam said, 'The problem here is that most of the companies in this market are weak. It is difficult for DSE to monitor so many vulnerable companies together. Some companies have been listed in our market which were not supposed to be listed. Steps should be taken to delist them.'
CMJF president SM Golam Samdani Bhuiyan presided over the program and general secretary Abu Ali conducted the event.