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Govt swings into action to stabilise capital market

Staff Correspondent | Published: 00:00, Jan 17,2020

 
 

A file photo shows the shadow of a man speaking on his phone on a monitor displaying share price movements at a brokerage house in Dhaka. The government on Thursday swung into action to stabilise the country’s stock market that has been in turmoil for the last 11 months. — New Age photo

The government on Thursday swung into action to stabilise the country’s stock market that has been in turmoil for the last 11 months.

The moves came as the relentless meltdown caused the core index of Dhaka Stock Exchange to fall by more than 1,900 points and the market capitalisation to lose Tk 1 lakh crore.

A number of senior government officials on Thursday at a meeting at the Prime Minister’s Office discussed measures, including injection of funds, to stabilise the capital market.

Officials of the Bangladesh Securities and Exchange Commission and the finance ministry held the meeting with principal secretary to the Prime Minister’s Office Ahmad Kaikaus.

A press release issued by the BSEC said that a meeting of ‘policymakers’ at the PMO ‘directed’ the authorities concerned to implement a 6-point proposal as short-term measures to develop the capital market.

An official who was present at the meeting, however, told New Age that the meeting made no decision to direct any authorities for taking any measures, rather it discussed what measures could be taken to stabilise the market.

There will be follow-up meetings with authorities concerned like the Bangladesh Bank to finalise the recommendations.

The officials later briefed prime minister Sheikh Hasina about the discussion, he said.

The meeting discussed that banks and non-bank financial institutions could be asked to increase investment in the capital market.

The investment capacity of state-run Investment Corporation of Bangladesh could be enhanced.

The senior government officials may take initiatives to enlist on the stock market good companies including multinational and government-owned companies.

Merchant bankers and institutional investors can be given loan facilities on easy terms.

Necessary measures should be taken to attract foreign investment and build their confidence in the country’s stock market.

Meanwhile, the BB on Thursday encouraged banks to invest in the capital market.

An official said that the central bank contacted at least five banks, which were earlier active on the capital market but are now reluctant to inject fund, to encourage them to invest in the capital market again.

He said that the government also asked the BB to make recommendations on how to increase fund flow to the capital market.

A meeting was held on Thursday at the board room of Sonali Bank head office in Dhaka to enhance cooperation among four state-owned commercial banks.

The chairpersons, chief executive officers and managing directors of the banks also discussed different issues including flow of investment to the capital market.

The meeting emphasised an increase in investment on the capital market and also instructed the officials to take necessary steps in this regard.

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