Special assistant to CA, Anisuzzaman Chowdhury says to DSEGovt measures imminent to make visible changes in market

Spcial assistant to the chief adviser, Dr Anisuzzaman Chowdhury has assured that the existing problems surrounding the capital market will be quickly resolved for its sustainable development.

His assurance came on Sunday at a meeting at the Dhaka Stock Exchange (DSE). The newly-formed Capital Market Development Committee led by Mr Chowdhury, also chairman of the committee, paid a visit to the office of the Dhaka bourse.

It is a four-member panel formed in March this year, aimed at strengthening the Bangladesh Securities and Exchange Commission (BSEC) and supporting the development of the country's secondary market.

Mr Chowdhury said the securities regulator had been trying to list good companies. The public issue rules are at the final stage to be revised and the revised rules will be helpful in ensuring the listing of good companies.

"Initiatives have been taken to bring some government companies to the market," he said.

At the beginning of the meeting, DSE Chairman Mominul Islam highlighted structural problems hampering the growth of the capital market.

To boost the supply of quality shares, he said the government may divest from multinational companies and profitable local corporations in favour of foreign investors, with a condition that the enterprises get listed in two years' time.

Mr Islam also suggested a complete digitization of the IPO process and financial reporting.

He insisted on making income from asset-backed securities tax-free against corporate bonds, and making it mandatory to raise capital through public listing for companies with long-term debts surpassing Tk 5 billion.

Mr Islam also said the corporate tax rate gap should be widened to at least 10 percentage point between listed and non-listed firms without any conditions, which came down to 5 per cent last year despite market stakeholders' repeated demand for a wider gap.

Referring to the current bearish market trend, Mr. Islam said high interest rates of government securities, shrinking corporate profitability, legacy of negative equity, fear of a further devaluation of the local currency against the dollar and manipulation are hindering market growth.

The DSE chairman also requested for a complete waiver of annual maintenance fee of beneficiary owner's accounts in consideration of the present market situation. The annual BO maintenance fee is Tk 450.

He sought full exemption of capital gain tax for individual investors. Presently, 15 per cent tax is applicable if income from share trading exceeds Tk 5 million.

Mr Islam suggested gradual provisioning of negative equity and joint meetings between regulators and market intermediaries every month for decision making and policy support.

The DSE made a plea that at least one representative from the stock exchanges be allowed to take part in policy decisions.

Mr Chowdhury said the country's economy has now started to turn around as the chief advisor is working for reforms and development of the overall economy.

Many positive events are happening in the money market, including the repayment of foreign debts. "The impact of all these will soon be felt in the capital market," he said.

In 2026, Bangladesh is going to graduate from the status of least developed country (LDC) to a developing country, he said. To overcome the challenges after graduation, Mr Chowdhury said, "We need to reduce dependence on foreigners and build a strong capital market structure.

"If we can build a strong capital market structure, raising capital for industrialisation will be easy."