Sunday, 29 January, 2023

We’re striving to build a reliable and sustainable capital market

Sayem Sobhan Anvir

We’re striving to build a reliable and sustainable capital market

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Apart from giant companies, small investors and ordinary people also aspire to see the country's capital market as a safe and profitable place for their investment. However, a secure capital market is yet to be built even though two biggest scams shook it in 1996 and 2010. ABG Limited seeks to establish the capital market as a reliable alternative income source for ordinary investors. All world-class innovative technologies and technical facilities will be assembled to build Chittagong Stock Exchange (CSE) as a technology-friendly platform for investors. It will help investors regain their confidence.

After several breakthroughs, Bangladesh has appeared as a rising tiger in South Asia. Breaking the cycle of hunger and poverty and leaving all threats behind, this Bangladesh is invincible-irresistible. The frenzy of indomitable energy of millions of people leads the nation to achieve a new identity- 'Solvent Bangladesh' in its golden jubilee of independence, from the stigma of a 'bottomless basket.' Bangladesh is now an incredible amalgamation of communal harmony with unquestionable success in economy, enterprise, industry, culture, education and health.

However, before the impact of the deadly coronavirus is over, the Ukraine-Russia war and global inflation have shaken the economy of the whole world. Bangladesh has also been affected by the worldwide recession. In the meantime, the global economic downturn has put the country's entire economy in extreme danger. The declining trend of the foreign exchange reserves of Bangladesh is the result of the global economic recession. It directly impacts the lives of people from all walks of life. Especially, low-income people suffer severely since the cost of living is increasing while income is decreasing badly.

The capital market could be the centre of safe income for ordinary people and small investors in this transitional period of inflation and increased cost. Even if inflation increases, people will have the strength to combat it if there is a developed, modern and stable capital market. Unfortunately, it was not possible to do that. 

But everything is not over yet. We have the chance to turn around. To build a prosperous and self-reliant ‘Sonar Bangla’ of Bangabandhu, the capital market, one of the essential parts of the financial sector, must be radically changed. We want to come forward as a saviour in this situation. Keeping that goal in mind, ABG Limited, a subsidiary of Bashundhara Group, is interested in becoming a strategic partner or strategic investor of the Chittagong Stock Exchange. Happily, we are moving towards achieving that desired goal. Now, we will focus on establishing this capital market as an equally supportive shelter for all.

Chittagong Stock Exchange has already received permission for commodity market from Bangladesh Securities and Exchange Commission (BSEC), the apex body of the capital market of the country. Nowadays foreign exchange has also become one of the pioneer instruments/securities among all other securities of the capital market. The popularity of the foreign exchange increased gradually over the years in developed countries across the world. You would be very happy to hear that ABG Limited has already taken notable initiatives to take on board of Chittagong Stock Exchange foreign exchange, commodities and derivatives. We are particularly working on how to take commodities, derivatives (equity, commodity, FX) and indices into the CSE’s trading platform with collaboration of global capital market leading companies. We believe ABG Limited will be able to assist CSE in introducing all aforementioned securities at the trading platform of Chittagong Stock Exchange by 2030.

As the country's leading business conglomerate, Bashundhara Group does not focus only on making money; it also performs some responsibilities for the people and nation. Our slogan is -`For the welfare of the country and people’, which was introduced by my elder brother. Since then, we all have taken this motto as a vow. One of our big goals is to achieve the welfare of the country's people and we are doing it differently. However, it is good to get an opportunity to do something in people's interest through the financial sector and the capital market. Hopefully, here too, we will be able to achieve the target.

We have already started working. A US-based firm is being tapped to make CSE technology-friendly. One of our goals is to bring the capital market into the hands of all people of the country by making it advanced and technology-friendly, primarily through modern technical management so that people can start investing from 5-10 thousand BDT for the long term. It is better to make a small profit rather than keeping money uncirculated in the bank.

People in almost every country across the world make long-term investment in the capital market along with bank insurance, which is a different source of income. From this income, they can spend extra money at the end of the year or people can go on outings on holidays. But two big crashes in our capital market in 1996 and 2010 have scared ordinary investors; now, people are terrified of investing in the capital market. Even hearing the name of the capital market brings negative questions to many people's minds. Most people now need more confidence for investing in the stock market, including foreign investors. This is mainly due to the need for more adequate information, fear of manipulation by evil syndicates and lack of stringent action against the culprits of the capital market.

Although the two incidents have frightened ordinary investors, no attempt has been made to restore the investors' confidence. We want to light the lamp of lost hope in people's minds with a proper action plan and make the process easy so that investors trust the capital market again and make investment. It should work as an alternative source of their family income. As a strategic partner or investor of the Chittagong Stock Exchange, ABG Limited will first work to ensure easy access to information. Besides, through the responsible officials of CSE, regular transactions in the capital market will be monitored so that no one can loot the money of the investors. For this, the cooperation of the capital market regulatory body -- Bangladesh Securities and Exchange Commission -- will be required.

Our neighbouring nation India's National Stock Exchange (NSE) has an average daily turnover of 22,724 crore rupees whereas the average daily transaction in the two stock exchanges of Bangladesh is less than 1,000 crore BDT. Many people will say that their population is around 140 crore, their economy is large and the number of companies listed in the capital market is high. But our population is more than 165 million. We are lagging behind in terms of investment in proportion to the population. So, why will our transactions not be one-seventh? Why will not large capital companies be listed in our capital market? Why will not foreign investment increase in our capital market? Why cannot trust be returned? It is possible.

Let me come up with an example of NSE; the National Stock Exchange became the world's largest derivative exchange in 2021 despite the coronavirus pandemic. The information came from the statistics conducted by the Futures Industry Association (FIA). Also, according to the World Federation of Exchanges statistics, NSE ranks fourth in the world in cash equity based on the number of trades. We are at the very end of the list. The reason for this is interdependence. We have to look to developed countries for technology. When you want to start something new, you are told that it is impossible by us. But no one learns everything from the mother's womb. New tasks, new challenges and new experiences will emerge in our way and we have to face those. If necessary, we will hire a consultant to complete the work. But we must be in charge of the work. If not, the multinational companies will smuggle the money of this country abroad by earning in our country.

Look at the telecom companies in Bangladesh; Grameenphone has 8.4 million subscribers, Robi Axiata has 5.48 million subscribers and Banglalink Digital Communication Limited has 3.85 million subscribers. However, the number of subscribers of Teletalk Bangladesh Limited, owned by the Bangladesh government, is only 67 lakh. Following the laws of the Bangladesh government, other multinational companies have taken billions of money abroad for telecom business, but Teletalk is not in that competition. The main reason is the fear that we cannot do it. At the same time, we have extra love for foreign companies.

Multinational companies are also responsible for the dollar crisis in the country today. Although these institutions make thousands of crores of taka in profit in the country, the new investment is minimal. As a result, money is going abroad. The situation could have been different had domestic companies been given investment opportunities like multinational companies. Because the profit we make from the business is reinvested in the country. The domestic labour market is our main strength.

Bashundhara Group has always been giving importance to domestic products and domestic production. Many daily essential products are being produced here to meet the needs of the country's people. Not only that, the group has opened many avenues to earn foreign currencies which are helping the country curve down trade disparity. We are determined to play a role as one of the regulators in the country's transitional period. Respecting the country's laws and policies, we play a role in critical sectors. Similarly, we want to have a positive impact on the capital market as well so that ordinary investors regain their lost confidence.

But an initiative is needed there to restore the confidence of investors. Last year was the perfect time to take such a step. Everything came to a standstill when the coronavirus pandemic started in 2020. Despite that situation, share prices of 300 companies out of 368 listed in the capital market increased in 2021. Among them, the shares and company prices of 70 companies increased by more than 100 percent. Even after such an unnoticed rise in the capital market, we could not attract investors. Or those who came to the capital market at that time also moved to the sidelines due to the fear of gambling. But if we could secure capital market investment, Chittagong Stock Exchange could be a source of additional income for the middle class.

Even though multinational companies invest in our country and withdraw thousands of crores of taka, there is little foreign investment in the capital market of Bangladesh. Last September, only 1 crore 41 lakh BDT was invested in CSE. At the same time, DSE's foreign investment fell to the previous seven-year low. This situation must be changed. The commodity exchange as well as derivatives and options markets will also be set to open at the CSE. It will take three years to fully realise the dream that is starting today. After 36 months, you will see a new CSE, which will be more modern and secure. The system will be fully digitised and automated. 

With investment in different countries of the world, it becomes a settlement. The buyer gets the shares and the seller receives the money. But our settlement cycle is still T-2, and it is- the percentage can be sold two days after buying the share. Similarly, the share sale money is deposited in the investor's account after two days through the banking channel. Banks are making profit by using the money at this time. But the investors do not get any benefit from this money. We should change the trade cycle. ABG Limited will work to change this situation. Investors can buy and sell shares whenever they want. Foreign investors will come to the capital market of Bangladesh.

In addition to the secondary market, we bring reforms in our primary and small-cap markets. Because the nameless companies are stealing money from the capital market by submitting fake prospectus. Many people think managers and audit companies are involved with this process. But these issues should be presented to investors through proper investigation. As a result, many companies went bankrupt after going public, but the investors still needed to get their money back. In such a situation, restoring people's trust without transparency and accountability is impossible. ABG Limited and CSE will work together to protect the interests of investors.

Although many public and private companies in the country have made thousands of crores of taka in profit, they are yet to come to the capital market through Initial Public Offering (IPO). Because, in the capital market, investors must give financial accounts in four quarters a year, assets and income-expenditure must also be shown. The Annual General Meeting (AGM) of all listed companies has to be held at the end of the year. As a result, those associated with the company will be unable to launder money or embezzle it even if they want to do so. They must come under the umbrella of transparency. They do not want to do that. Therefore, the government should reduce the tax benefits of multinational companies with large profits and list them in the capital market. It will increase the fund of the capital market as well as increase its depth. Investors will also be interested in the market.

Big companies want to avoid coming to the capital market. But some companies struggle a lot to go to the capital market. For example, a company applied to BSEC in February 2020 to raise funds for business expansion. But the company was allowed to withdraw money in 2022. In the meantime, the company has completed the development by borrowing from the bank; this should be different. A one-stop service should be introduced for the registration of new companies. Also, there should be the facility to open a BO account through an app with only NID card and mobile number. This will attract new investors.

The investment process should be simplified for ordinary and foreign investors. A strong unit should be opened to bring them to the capital market. This unit will attract investors from different countries to direct investment in Bangladesh. Besides, the students of various public and private universities in the country should be allowed to invest in the capital market on easy conditions apart from teaching them capital market investment strategies.

At the same time, a balanced, orderly and sustainable capital market should be developed to maintain the continuity of how Bangladesh is creating new successes in the development stage. And for this purpose, ABG Limited is determined to stand by the investors with all the necessary services and support.

As we all know, investors of our country have already lost their faith in the capital market. Again here we found to do something good for the economy of the country. We believe an exchange with all types of securities and sustainable secured global standard trading platform eco system will be able to attract not only all classes of investors but also compel all citizens of the country and foreign investors to invest in the capital market instead of investing or depositing funds anywhere else. Hopefully we, ABG Limited, will be in a very good position to transform the living standard of all citizens of the country through revamping CSE. Moreover, to expedite the eco system of the capital market in Bangladesh, ABG Limited also integrated three more new business ventures with a vision for vertical integration and financial inclusion. We, ABG Limited, are very happy to share the business identity of these specialised ventures with business prospects.  

ABG TECHNOLOGIES LIMITED has been incorporated to create a digital payment gateway for faster transactions of CSE. We believe it will help transform BSEC’s instant settlement desire into reality. Investors may obtain an easy and transparent way to invest in the capital market. By using this channel both investors and government of Bangladesh will be benefitted and get direct privilege. The company may contribute to fulfilling the dream of Digital Bangladesh of our Honourable Prime Minister. You would be pleased to know that the company is ready to work with CSE dedicatedly.

ABG Media Limited has been incorporated to establish a dedicated TV channel, magazine and newspapers for all types of business ventures, especially the capital market. The company will be able to contribute to branding and acquisition of new investors at the CSE.

ABG Datafication Limited has been incorporated to act as the data centre of all companies of the biggest business conglomerate known as Bashundhara Group. The company has the ability to provide e-KYC services to the exchange along with data centre and other facilities subject to the prior approval from relevant authorities.

With the contributions and assistance of ABG Limited, the capital market of the country will rise and CSE will become one of the top exchanges of the world.

The developed world has already moved to the digital economy. This digital economy will keep contribution to achieving the Vision-2040 of the government of Bangladesh. ABG Limited will contribute to transforming Bangladesh into digital economy by introducing utmost technology in the capital market. We envision engaging grassroots-level people with capital market and would like be a stakeholder of building Bangladesh with digital economy.  

“Joy Bangla”


Sayem Sobhan Anvir,

Managing Director of Bashundhara Group and ABG Limited