Lull in stocks investment though 14 banks form Tk 1,700cr funds

Staff Correspondent | Published: 22:25, Jun 22,2020

 
 

A file photo shows a representative of a brokerage house monitoring share prices on a computer monitor in Dhaka.  The trend of investment in the country’s stock market has remained very pessimistic amid the coronavirus pandemic though 14 banks have formed special funds involving around Tk 1,700 crore for investing the funds in the market. — New Age photo  

The trend of investment in the country’s stock market has remained very pessimistic amid the coronavirus pandemic though 14 banks have formed special funds involving around Tk 1,700 crore for investing the funds in the market.

Of the banks, Sonali Bank, Janata Bank, Agrani Bank, National Credit and Commerce Bank, One Bank, United Commercial Bank and Mercantile Bank have formed Tk 200 crore in stocks fund each, an official of Bangladesh Bank said.

Besides, Pubali Bank and City Bank have formed Tk 50 crore in special fund each, while EXIM Bank has formed Tk 80 crore stock market fund for the purpose.

Of the funds formed by the banks, the central bank has provided Tk 130 crore to two banks while the rest of the funds have come from the banks concerned.

Agrani Bank managing director and chief executive officer Mohammad Shams-Ul Islam told New Age, ‘Though the market has been facing slowness due to the coronavirus outbreak, we are hopeful that the market will turn around soon.’

The bank has been trading at the stock market through its stock market subsidiary and from its own portfolio, he said.

Shams also hoped that the new leadership at the regulatory body, Bangladesh Securities and Exchange Commission, would guide the market properly and try to ensure public trust in the market.

Stockbrokers said that investors had remained pessimistic about the market due mainly to the outbreak of coronavirus that brought business activities and trade almost to a halt for around two months.

Although the government withdrew shutdown on May 31, normalcy is yet to be restored due to a rapid increase in coronavirus cases and deaths, they said.

Because of these, investors have also remained pessimistic about the stock market, said stockbrokers.

Besides, the imposition of floor price system by the BSEC to check free fall on the market amid the pandemic was another reason for the fall in transaction volume and a very limited movement of share prices.

Amid prolonged market fall, the central bank in February this year allowed each bank to form Tk 200 crore in special fund for the stock market either by their own fund or by taking money for the central bank.

The BB also allowed the banks to keep their investments in the stock market from the fund facility outside the banks’ stock market exposure calculation.

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