The finance minister, Abul Maal Abdul Muhith, in the parliament on Wednesday said that he had failed in the offloading of shares of state-owned enterprises and hoped that the capital market would better in coming months as some initial primary offerings are coming soon.
‘I feel no hesitation about admitting that I have failed in offloading shares of government companies,’ he said.
He said it would take tome to correct the volatile capital market. He said some companies wanted to offload shares but it could not be done because of the suspension of book building system.
Muhith said that the government did not have any other alternative to demutualisation of the market for its overall development.
In reply to a supplementary question of Sultana Bulbul, Muhith said that the government wanted demutualisation of the capital market although people active on the stock market did not want it.
‘We do not have any alternative to demutualisation of the market because the same people are doing all the things… we will do it during the tenure of the present government,’ he said.
As for unpredictable behaviour of the capital market, Muhith said there might have been some mysteries behind such behaviour. He expected that things would come to light in the investigation.
‘We have some ‘tools’ such as the Central Depository Bangladesh Limited this time which we did not have in 1996. We will be able to trace the manipulators,’ he said.
Muhith said book building method was the best in the world but in the absence of proper laws, shares of two companies became overvalued through manipulation.
‘Loopholes are there in the law, which governs our chartered accountants, for fraudulence and manipulation. We are enacting a law in this regard to avoid manipulation in the book building method,’ he said.
Muhith, however, said they would follow book building method in future too.
He also said that they would impose some conditions so that premiums can be justified.
Muhith alleged that none of the previous governments had allowed the capital market to function properly.
‘But we took steps to make it functional. If we want to increase the investment volume, we will have to keep the capital market vibrant.’
‘There will be ups and downs on the market. It is the normal behaviour of the capital market. If shares become overvalued, correction is a must. We have to accept both rise and fall of the market,’ he said.
Muhith said, ‘It is my mistake. I am also taking the responsibility of any mistakes committed by the Securities and Exchange Commission or the Bangladesh Bank.’
In reply to another supplementary question of Jahirul Haque Bhuiyan, Muhith said the Dhaka Stock Exchange and the Chittagong Stock Exchange were under private ownership where issuers, brokers and investors are the same people.
‘We want demutualisation. We want to see three independent bodies. We will do it at any cost. If necessary, we will set up a national stock exchange,’ he said.
