The Dhaka Stock Exchange on Thursday said that the bourse stopped making public the draft IPO prospectuses of companies on verbal instruction of the Bangladesh Securities and Exchange Commission. Replying to a question why the bourse stopped publishing draft IPO prospectus, DSE managing director Swapan Kumar Bala made the comment at a press briefing at the DSE office in the capital.
Previously, the DSE published the draft prospectuses of initial public offerings of different companies on its web site and the prospective investors could assess the IPOs before the initial offers got BSEC approval.
DSE independent director Abul Hashem and shareholding director Md Shakil Rizvi were also present at the briefing.
Swapan said, ‘The DSE stopped publishing a draft IPO prospectus before it gets BSEC nod following a verbal order from the regulator.’
‘But, the problem would be solved once the regulator approves a draft listing regulation submitted by the bourse,’ he said.
DSE sources said the regulator barred DSE from publishing any draft IPO prospectus after several newspapers reported that many companies provided false and fabricated information in the draft prospectus. ‘The regulator’s move has basically helped the errant companies which prepare inflated financial report to lure investors into the IPO process,’ said an official.
Asked about the DSE’s comment, BSEC executive director Saifur Rahman told New Age, ‘It might create confusion among the prospective investors if the draft IPO prospectus is
published before getting final approval as the draft IPO prospectus contains incomplete information and the issuer company often revises the draft.’
The BSEC never disseminates any information before it is finalised, he said.
Saifur also said that the bourse should always be careful in making any such comment.
At the briefing, Swapan also said that the bourse targeted to launch its new automated trading system by October this year as it had signed agreements with the two world renowned organisations on March 21 in a bid to upgrade the bourse’s reputation in the context of other countries of the world.
The bourse has also planned to form a clearing corporation in collaboration with the Chittagong Stock Exchange to introduce derivatives and future contracts to boost the bourse’s business, he said.
Replying to another question, Swapan said that there was a perception that the market was on downward trend due to a liquidity crisis which might have created due to the IPO as huge amount of fund remains blocked in the existing IPO process.
The problem might ease once the IPO subscription process through the stockbrokers will start as it will take up to 25 days to complete the process, he said.
Shakil Rizvi said there was a wrong perception among the investors about any capital market- related step taken by Bangladesh Bank.
To reduce the problem, the BB should consult the capital market regulator before taking any stock market-related decision, he said.
-With New Age input
