Thursday, 20 January, 2022

Capital market defies odds in 2021

Capital market defies odds in 2021

Popular News

# Tk 210bn market stabilization fund formed

# Trading of SMEs launched at Dhaka bourse

# OTC market abolished

The capital market has drawn a large volume of investment in the outgoing 2021 despite the corona pandemic.

Market insiders say that this year the market has provided the highest volume of return to the investors in 10 years thanks to the measures taken by the Bangladesh Security Exchange Commission (BSEC).

Dhaka Stock Exchange (DSE) performed the best among Asian frontier markets in May this year, according to Asia Frontier Capital.

Analysts say that the market stabilization fund of Tk 210 billion, formed by the BSEC, abolition of the Over the Counter transaction and allowing the small mid-size enterprises (SME) helped regain the confidence of the investors.

Policy Research Institute (PRI) executive director Dr Ahsan H Mansur said the stock market was mostly stable and positive in 2021.

“The market saw a few reforms this year including bond products. For long term financing, we should focus on capital market rather than depending only on banks.” Dr Mansur, a former mission chief of the International Monetary Fund (IMF), told the Daily Sun.

Mansur also suggested linking the provident and pensions fund of public-private organizations to the capital market to promote more inclusive growth.

In 2021, 13 new companies came up with initial public offerings or IPOs with a paid-up capital of Tk 25.86 billion. In addition, four companies from OTC market were re-listed in the main market with a total paid-up capital is Tk 1.64 billion. From SME segment, six new small businesses have been enlisted with the stock market in 2021.

BSEC abolished the OTC (over the counter) market. Of the companies' shares in the OTC market, 23 were listed on the small capital platform and 18 on the ATB (alternative trading platform) and the rest of OTC's shares were delisted from the market.

The long-awaited government’s Treasury bond transaction was completed with a view to establishing a viable and efficient bond market.

Regarding the performance of the stocks, BSEC chairman Prof Shibli Rubayat-Ul-Islam said the index started the year with 4000 points which fluctuated around 5000 to 6000 points over the year.

“The index performance was satisfactory. Besides, we have launched several innovative services like SME inclusion in the market. We developed the market stabilisation fund this year. There were some new mutual funds in the market. We will continue the reforms for strengthening the country’s economy,” Prof Shibli told the Daily Sun.

A total of nine securities, including 1 mutual fund, were listed on the DSE with a paid-up capital of Tk 60.02 billion.

BSEC established the stock market stabilization fund with the undistributed dividends of various listed companies to normalize the market through investment activities to address the volatile situation of the stock market in the liquidity crisis.

The brokerage houses have been given DSE fix certification by the two brokerage houses with the aim of improving customer service by launching their own OMS through API connection.

An electronic subscription system was introduced for the proportional distribution of shares to general investors. As a result, the issuer's IPO issue costs are reduced, also cutting the time between the start of the transaction and the receipt of the subscription.