Experts lambast govt for apathy to mend stock meltdown

Experts on Wednesday came down heavily on the government for taking no steps at all to stabilise the country’s capital market, blaming its foot-dragging over reforming the Securities and Exchange Commission and indifference to re-infuse investors with fresh confidence for the continued reign of volatility over the market for five long months.
They also held the Bangladesh Bank responsible for creating a fresh liquidity crisis which they termed a key factor leading the market to the recent meltdown.
Instead of taking action against the banks who had over-invested in the equities market in 2010, the central bank had simply compelled all the banks, without making any differentiation between the greedy and the fair groups, to meet the cash-reserve requirement and statutory liquidity ratio, the experts said. The BB did not even took a moment to consider the probable impacts on the securities market that would result as a consequence of imposing the regulations and thus gave rise to the present liquidity crunch.
They deplored the government’s utter failure or deliberate inaction to come up with a concrete course of action and implement it after submission of the probe report on the January’s stock market debacle.
The experts dubbed the government’s role following the submission of the probe report dubious and highly confusing as the report had recommended precise direction to and kinds of move to be taken to correct the flaws, crimes and manipulations of the market that had led to the bubble that burst.
‘It seems the government is in a dilemma about what it should do as a number of high-ups in the corridors of power are seen to feuding with one another,’ an analyst surmised. 
He categorically said, ‘The government high-ups are clearly divided on the stock market issue, not because they are trying to protect the small investors but because they have their own stakes in this case and agenda to serve.’
The experts also pointed out that the remarks the finance minister had made since the day the probe report was submitted were contradictory to one another and every one of them affected the market negatively.
The general index of Dhaka Stock Exchange has suffered a mammoth 1,250-point loss since the report-submission on April 7 till Wednesday.
Finance adviser to the immediate past interim government Mirza Azizul Islam remarked, ‘The government’s stance about the capital market issue is not clear at all.’
‘When the investors need from the government a clear direction about where the market is heading for, it keeps mum,’ he observed, adding, ‘Such silences have just given rise to rumours and baseless speculations, leading the market to further deterioration.’
The former finance adviser said, although a rumour that the government might impose capital gain tax and make taxpayer’s identification number mandatory for opening and maintaining beneficiary owner’s accounts had panicked the retail investors into making heavy sell-offs gone in the past few weeks, yet the government had not made any clear announcement on the issues.
Mirza Aziz, who was once a chairman of the SEC, said restructuring the SEC was taking too long, whereas, considering the present scenario it should be the top priority.
‘Reforming the SEC should be the top priority at the moment as the rest of the government measures and policy reforms would have to be carried out by the commission,’ he pointed out.
Slahuddin Ahmed Khan, a professor of finance at Dhaka University, said, ‘The Bangladesh Bank could not bar the commercial banks in time from getting over-exposed in the capital market and now, by taking a hard line against them, it was also worsening the situation in another way.’
He said, ‘Although the central bank is trying to justify its stance by pointing at the high rate of inflation but the money market hardly accounts for 10 per cent of the total inflation.’
He also explained that ‘The central bank cannot check inflation merely by adopting a stringent monetary policy as issues like the hike in food cost on the local market cannot be addressed by such policies.’
‘The central bank can take a flexible approach towards the commercial banks investing in the capital market for a while and subject to specific conditions as the market is now going through a severe liquidity crisis,’ suggested Mirza Aziz.
One of the analysts said, ‘Ultimately, investors bears the final brunt of the central bank barring the commercial banks from disbursing the profits they had pocketed from the capital market as dividends and by not compelling them to reinvest the profit taken away from the market.’            
AIMS Bangladesh Ltd managing director and chief executive officer Yawar Sayeed said, ‘It seems the whole issue is slipping out of the government’s grip because of its dilly-dallying in dealing with it.’
He also warned that ‘If things continue to remain this way, investors would never regain their confidence and the market would plunge into a deeper gloom and depression.’

 

Courtesy of New Age

Related News

Prime Bank opens Japan Desk

Business Desk : dhakamirror.com Prime Bank has officially launched “Japan Desk” with the objective of facilitating cross-border business initiatives and investments between Japan and Bangladesh. Naoki Ito, Japanese ambassador to Bangladesh, and Tanjil Chowdhury, chairman of Prime Bank, inaugurated the special desk at a local hotel in Dhaka, a press release said. “As many Japanese ... Read more

GP, EdTech collaborates to promote digital learning

Business Desk : dhakamirror.com Grameenphone has recently collaborated with Shikho – an EdTech venture in Bangladesh, to promote digital learning. Through this partnership, the connectivity partner to Digital Bangladesh, will host an array of educational content prepared by Shikho on its flagship app MyGP.  MyGP users can now avail of the 70-learning video content directly ... Read more

VLCC Health Care signs MoU with influencer Barisha Haque

Business Desk : dhakamirror.com VLCC Health Care Bangladesh on Saturday has inked an agreement with influencer Barisha Haque for promotion of its “Body after baby” programme. Under this agreement, Barisha Haque will be the delegate of Body after Baby program and shall be responsible to promote and give reviews over the services and products as ... Read more

NRB Bank launches eKYC ‘NRB Quick Account’

Business Desk : dhakamirror.com NRB Bank has formally launched its eKYC named as NRB Quick Account on 29 September at the bank’s Corporate Head Office, Dhaka. Mohammed Mahtabur Rahman, chairman of the bank formally inaugurated the programme, reads a press release. eKYC is a combination of paperless customer onboarding, promptly identifying and verifying customer identity, ... Read more

Fortune Rice Bran Oil observes World Heart Day

Business Desk : dhakamirror.com Fortune Rice Bran Oil, a brand of Bangladesh Edible Oil Ltd, celebrated World Heart Day on 29 September by providing free health services and special discounts on products. The oil company gave free health services at 22 parks in 10 major cities, and branded caravans roamed around major points in Dhaka ... Read more

Shwapno opens new outlet in Bogura

Business Desk : dhakamirror.com Shwapno, the country’s biggest retail chain shop, launched its new outlet in Bogura Upashahar area on Friday. During the inauguration programme, franchisee Mohammad Rashdeul Islam, managing director of Bogura Nursing Home AHM Mushihur Rahman, businessman AKM Rajiullah, Hafej Abdul Gaffar Imam, Shawpno zonal manager Musa Tarek, and outlet manager Siddiqur Rahman ... Read more

Hyundai cars will be assembled locally: South Korean envoy

Business Desk : dhakamirror.com Hyundai cars of Korea will be assembled in Bangladesh by the year end, South Korean Ambassador to Bangladesh, Lee Jang-keun said on Sunday. He said that in recent years, there have been some obvious and significant developments. The majority of Samsung Electronics’ gadgets are produced at Narsingdi in partnership with a ... Read more

Meghna EZ attracts Swiss investments

Business Desk : dhakamirror.com Sika Bangladesh, a subsidiary of Swiss Sika Group, a producer of construction chemicals, would invest US$6 million to develop a 10,000 square meter plant in the Meghna Industrial Economic Zone (Miez) in Sonargaon, Narayanganj. The factory will mainly produce admixtures and grout, an official said. Construction chemical products worth around Tk ... Read more

EBL raises Tk 122.4cr for TMSS

Business Desk : dhakamirror.com Eastern Bank Limited (EBL) has raised Tk 1,224 million (Tk 122.4 crore) through the issuance of zero-coupon bonds for Thengamara Mohila Sabuj Sangha (TMSS), a microfinance institution in Bangladesh. The EBL acted as the lead arranger while MTB Capital Ltd played a role as the trustee of the deal, said a ... Read more

Nagad offers up to 20pc cashback for Puja

Business Desk : dhakamirror.com Mobile financial service Nagad on Monday rolled out a campaign titled “Utshab er Khushi Nagad-a Beshi” on the eve of Durga Puja. Under the campaign, they offered up to 20 per cent cashback and discount for its customers in lifestyle, e-commerce, and restaurant categories at over 50 brand outlets across the ... Read more

GP, Hatil team up to enhance lifestyle

Business Desk : dhakamirror.com Leading mobile phone operator Grameenphone paired up with premium furniture brand Hatil to enhance the lifestyle of its GPStar customers. Selim H Rahman, chairman of Hatil Bangladesh, and Asif Naimur Rashid, chief business officer of Grameenphone, signed the deal at the GPHouse in Dhaka on Monday, a press release said. Under ... Read more

Brac Bank opens 800th agent banking outlet

Business Desk : dhakamirror.com Brac Bank has achieved a milestone of opening the 800th agent banking outlet recently. Nazmur Rahim, head of alternate banking channels of the bank, inaugurated the outlet at Kaziganj Bazar in Habiganj on Monday. The bank serves around 2.10 lakh unbanked people in rural and semi-urban areas through its agent banking ... Read more

Newsweek report praises Walton

Business Desk : dhakamirror.com US weekly magazine Newsweek appreciates Bangladesh’s electric and electronics conglomerate Walton for its growing role in the economic growth and development of the country. The magazine highlighted the country’s development in their recent report, where it mentioned Walton is the corporate pride of Bangladesh whose spectacular growth runs parallel to that ... Read more

Rubana Huq honoured with Human Right Award by CNMI Sustainable Fashion Awards 2022

Business Desk : dhakamirror.com On the occasion of Milan Fashion Week, former president of Bangladesh Garment Manufacturers and Exporters Association Rubana Huq has been awarded the Human Right Award by CNMI Sustainable Fashion Awards 2022. The National Chamber of Italian Fashion, in collaboration with the United Nations Ethical Fashion Initiative, a programme of the International ... Read more

Registration for Banglalink’s ‘ennovators’ begins

Business Desk : dhakamirror.com Banglalink has kicked off the registration process for the sixth season of ennovators, a digital idea-based competition in the country. Ennovators is a platform for creative young people of the country looking to showcase their ideas in the field of digital innovation against the challenges of today’s world. Over the course ... Read more

DHL adjusts Bangladesh price for 2023

Business Desk : dhakamirror.com DHL Express, the world’s leading international express services provider, announced price adjustments today that will take effect on January 1, 2023. The average increase in Bangladesh will be 7.9 %, compared to 2022. “So far, 2022 has been another turbulent year with a volatile market environment challenging global trade. However, we ... Read more

TVS Motor launches new motorcycle

Business Desk : dhakamirror.com TVS Motor Company launched a 160cc motorcycle in Bangladesh yesterday bearing an anti-lock braking system J Ekram Hussain, managing director of TVS Auto Bangladesh, unveiled the TVS Apache 160 2V at a programme in Dhaka yesterday, said a press release. Rahul Nayak, vice-president of International Business of TVS Motor Company, Biplob ... Read more

CPA to start construction works of Bay Terminal in 2023

Business Desk : dhakamirror.com The Chittagong Port Authority on Wednesday informed that they had completed all the preparations, including land acquisition and design, to start the construction works of the Bay Terminal in Chattogram from January 2023. CPA chairman rear admiral M Shahjahan disclosed the information at a press conference at Munshi Fazlur Rahman auditorium ... Read more

Tri-nation firm Gava to invest $25.62m in Dhaka EPZ

Business Desk : dhakamirror.com Gava Private Limited, a company owned by Hong Kong, Sri Lanka and Switzerland, is going to invest $25.62 million at Dhaka Export Processing Zone (DEPZ) to set up a garment manufacturing industry. The company will produce annually 4.4 million pieces of jackets, fleece jackets, t-shirts, polo shirts, sweaters, trousers, coverall, stretch ... Read more

GP received approval to sell used recycled SIMs

Business Desk : dhakamirror.com The telecom regulator recently permitted Grameenphone (GP) to sell unused pre-approved old numbers that had been out of service for more than 450 days, a Bangladesh Telecommunication Regulatory Commission (BTRC) official said. Grameenphone has already started selling SIM cards against its suspended unused numbers, following regulatory approval. But, the ban on ... Read more