STOCKS’ BEAR RUN

Stakeholders decide to meet BB governor to discuss way out

Staff Correspondent | Published: 00:05, Jan 18,2018 | Updated: 23:36, Jan 17,2018

 
 

Merchant bankers and stockbrokers have decided that they would hold a meeting with Bangladesh Bank governor Fazle Kabir soon to put forward some proposals for improving the current bearish situation at the stock market.
They made the decision at an emergency meeting between the DSE Brokers Association and the Bangladesh Merchant Bankers Association, held at the Dhaka Stock Exchange office premises in the city on Tuesday.
They held the meeting to discuss reasons responsible for the continued fall in share prices at the market and to find a way out.
The BB and the Bangladesh Securities and Exchange Commission should maintain coordination while taking any decision that might affect the capital market, they said.
DBA president Mustaque Ahmed Sadeque said, ‘The central bank makes decisions that affect the stock market without discussing with the other related regulators that sometimes spread panic among investors.’
He said that Investment Corporation of Bangladesh adjusted its single-party exposure at the end of last year as the BB forced the state-run investment firm to do that, ignoring appeals from DSE officials.
He said that the central bank issued a circular in 2014 to withdraw some funds of ICB’s investment in the stock market for adjusting overexposure. The ICB recently sold off shares
worth Tk 2,000 crore following the pressure from the central bank.
Institutional investors and some of the large investors also sold off their holdings amid the share sales of the ICB, the DBA president said.
Mustaque said, ‘We urged the ICB to discontinue the sales and the organisation has agreed. Now, we will request the finance ministry to permit the ICB to inject more funds in the capital market.’
He also said the BB recently planned to cut the banks’ advanced deposit ratio that might cause liquidity crisis at the capital market.
BB deputy governor SK Sur Chowdhury on January 3 said the ADR would be cut to 80.50 per cent for conventional banks and to 88 per cent for Sharia-based Islamic banks. The existing ratios are 85 per cent and 90 per cent respectively.
A speculation that the BB would announce a contractionary monetary policy for the second half (January-June) of this fiscal year later this month has kept the market damp in recent weeks, Mustaque said.
‘We will submit a set of recommendations to the BB and the finance ministry,’ he said.
The DSE key index, DSEX, lost 214 points since January 1 this year.
Moreover, the turnover at the bourse, an important indicator of the investors’ participation, has remained sluggish from December last year.
BMBA president Mohammed Nasir Uddin Chowdhury, secretary general Khairul Bashar Abu Taher Mohammad and ICB managing director Kazi Sanaul Hoq were present, among others, at Tuesday’s meeting. 

More about:

Want stories like this in your inbox?

Sign up to exclusive daily email

Advertisement

images

 

Advertisement

images