There is no problem in the stock market, the chairman of the capital market regulator Bangladesh Securities and Exchange Commission (BSEC) thinks that the global economic recession is having a negative impact on the market. Shibli Rubaiyat-ul-Islam. Advising investors not to panic in the current market situation, he said, BSEC is determined to stabilize the market. Hoping for good things in the new year once the ongoing crisis is over. The chairman of BSEC told Business Journal about the deterioration of the current market situation and what investors should do at this time.
He said, ‘There is no problem in our stock market in the current situation. We have done all the reforms or steps required for the market. However, the global economic crisis, the dollar crisis, inflation and the fears that are being talked about at the national and international level about economic or other indicators in the coming days are having a negative impact on the stock market.
Commenting on the liquidity crisis in the banks due to the dollar crisis and price rise, he said, ‘Bangladeshi currency Taka has to pay for the imbalance of import and export in the world economic crisis caused by the recent corona crisis, Russia-Ukraine war. As the cost of import has increased more than the export, the dollar reserve has been strained As a result, the rupee tends to depreciate against the dollar A few days ago, where the exchange rate of 1 US dollar was 86-87 taka, it is currently at 104-105 taka. Here also the cost per dollar has increased from 15 to 17 taka. Besides, due to the instructions regarding bank exposure limit, some money has gone out from the stock market,’ he said.
BSEC chairman said, ‘Because of these adverse issues, institutional investors and even most of the common investors are watching the market movements. And the biggest thing is that the end of the year is only a few days away. At this time the bank and its subsidiaries naturally do not go for new investments. Because they have to do the closing.’
In response to the question whether the institutional investors are inactive during the bad times of the market, he said, ‘It cannot be said that they are inactive. I said a little earlier that at the end of the year there is a matter of closing their accounts. Also, there are important matters like provisioning against unrealized gain or loss in respect of investments that have been made throughout the year, which they have to complete by December 31.’
Shibli Rubaiyat-ul Islam, in response to the question of whether the country’s capital market and investors have benefited from the various steps taken by the new commission for market development, Shibli Rubaiyat-ul Islam said that since taking charge, the current commission has taken numerous steps including amendments to various laws, road shows, creation of capital market stabilization fund, and changes in the IPO process. Besides, taking various steps for market development is an ongoing process. Its benefits are sometimes short-term and sometimes long-term. In the near future, the country’s capital market will also benefit from this.
However, the commission is keeping an eye on the overall affairs of the market, he said, ‘The commission is working to increase the flow of liquidity in the market. We are working with all stakeholders including institutional investors on various action plans. Along with solving the ongoing global economic crisis, everyone’s joint efforts will bring something good at the beginning of the new year’- he expressed hope.
It should be noted that although BSEC has taken numerous important steps to stabilize the capital market, it is not reflected in the market. As a result, on Monday, the first working day after the Christmas holiday on Sunday, the index fell and the transaction fell below 200 crores. Earlier, on Thursday, the last working day of the week, shares worth 227 crore 74 lakh 78 thousand rupees were traded. That was the lowest transaction since July 16, 2020.
Despite falling to the bottom, the transaction did not fall below 200 crores in the last two years, but on Monday, 198.8 million 73 thousand takas changed hands, which is the lowest in the last 2 years and 5 months.
Less than this transaction took place on July 7, 2020. 138 crore 56 lakh 55 thousand taka changed hands that day.
The transaction on Wednesday was Tk 333 crore 58 lakh 98 thousand on the day when more than half of the companies decided to withdraw the floor price. On Thursday, transactions decreased by Tk 105 crore 84 lakh 20 thousand or 31.72 percent. On Monday it decreased by 28 crore 94 lakh 5 thousand taka or 12.70 percent.
Incidentally, Professor Shibli Rubaiyat-ul-Islam, chairman of the restructured Bangladesh Securities and Exchange Commission (BSEC), took the reins of the capital market on May 17, 2020 amid the Corona situation. Since joining the work, the capital market has gained momentum due to the multifaceted effective initiatives of the new commission. Investors regained confidence. However, after one and a half years of continuous growth, the capital market began to correct towards the end of last year. From February of this year, various global crises including war in Ukraine and Russia have been added to it. The country’s capital market was not spared from its influence.
However, the new commission’s action was not short of stabilizing the market. Especially the most important step of BSEC this year is the imposition of floor price. Due to the global crisis, the BSEC took the initiative to prevent the reduction of share prices by imposing the floor price in the second phase on July 28 this year. Although this type of system is not in the capital market of any other country in the world, it has been maintained in the interests of the common investors of the country.
Apart from this, cancellation of the lottery system of securing initial public offering (IPO) shares for all, implementation of the demand to determine the purchase price instead of the market price of the bank’s investment limit, resumption of production in several companies that had been closed for a long time due to various reasons, companies that had withdrawn money from the capital market and disappeared. , steps to return money to investors by delisting them, incentivizing companies to pay cash dividends instead of stock dividends, dealing in government securities and developing bond markets have also been played by the commission.
BSEC was on the hard line against those involved in manipulation throughout the year in the interests of the development of the capital market, order and transparency in the market. The commission has announced heavy fines and ban on the capital market for the members of various fraud circles due to the violation of securities laws.
In addition, to continue the investment education program in various districts of the country including the capital throughout the year, to organize a virtual road show in Japan, to encourage the work of market intermediaries, to give the Independence Golden Jubilee Award – 2022, to restore undisclosed money investment in the capital market in the budget; Facilitating investment in SME platform, helping Chittagong Stock Exchange (CSE) to set up commodity exchange, approving Bashundhara Group’s subsidiary ABG as strategic partner of CSE, legislation to set up Exchange Traded Fund (ETF) and Alternative Trading Board (ATB), dividend capital market for investors. Reimbursement through Stabilization Fund (CMSF), opportunity to buy shares by depositing cheques, taking steps to reduce spreading of rumors or fears about the capital market through social media, taking initiatives to increase investment in the capital market by banks and insurance companies,
Not only that, BSEC has also held roadshows in several countries to strengthen its position in the international arena. BSEC Chairman Professor Shibli Rubaiyat-ul-Islam has recently been elected as the Asia Pacific Regional Vice Chairman of the International Organization of Securities Commissions (IOSCO). He will serve in this position from 2022 to 2024. He assumed this responsibility on October 17. This is the first major achievement in the capital market of the country.
