Ibrahim Hossain Ovi

Prime Bank Investment, a subsidiary company of Prime Bank limited, is mulling over raising funds from alternative source to overcome dependency on bank loans.

In this regard, the company is going to organise a three-day long share market fair of Bangladesh at Whitechapel area in London from March 5 this year.

Local brokerage houses and merchant banks will take part at the fair, first of its kind, to draw the attention of the non-resident Bangladeshis to invest in Bangladesh share market.

President of the Bangladesh Merchant Bankers’ Association (BMBA), also CEO Prime Bank Investment Sheikh Mortuza Ahmed, said “We must have our own funds”.

“If we do not have enough funds we have to face liquidity shortage which creates shortage of cash flow in the share market,” he added.

He also said, “we are trying to raise funds from alternative sources so that we need not to dependent on banks for loans to avert further disaster in the stock market due to cash crunch.”

“We will seek cooperation from the market regulator to take up the initiative and follow the regulations in this regards,” he told daily sun.

“Collecting funds from alternative sources will not be wise decision as the share market is not stable at present,” Salahuddin Ahmed Khan, former DSE CEO said.

If it is done it should be based on the asset value of the company for reducing risk, he added. Institutional investments help stabilise the market as they are managed by the topnotch officials, said experts.

Many investors alleged that lenders frequently failed to give them margin loan at even 1:1 ratio, though the SEC now has set the margin loan ratio at 1:2. Fund crisis is still prevailing in the market, and the parent companies also failed to provide additional fund to the merchant banks, dealers said.

Currently, the source of funds for stock brokers and merchant banks is the parent companies and banks loans, they mentioned.

Due to shortage of funds, the stock market faced the steepest fall of 660 points on January 10 triggering the market watchdog to suspend trading of the bourse.

If funds are raised from the non-residents Bangladeshis, then it will increase participation of them into the country’s share market, said an expert.

Prime Bank Investment Ltd will sponsor the fair organised by UK-based media company Curry Life Events.

Curry Life Events organises different sorts of event in different parts of the globe including the UK and it also has got several publications and magazines.

Share market of Bangladesh is gaining with highest popularity among the NRBs and there is a great response from the expatriates in the UK and other countries in Europe, the company source said.

They are very much keen to participate in share business in Bangladesh as the government always encourages them to make more investments in the home.

The present government and the regulators are always working sincerely to remove obstacles against investment of non-¬residents and they also maintain a percentage of IPOs reserved for the NRB's, the source said.

Moreover, the interest of NRB's regarding Bangladesh share market is easily measured by looking at the size of application of IPO.

Syed Belal Ahmed of curry life events said “A large number of expatriates Bangladeshis living across the UK consider buying properties in Bangladesh as major prospective investments.

But now they want to diversify their investments and are showing interest in country’s share market, he said adding some NRBs have already invested in share market.

Hundreds of million of taka of NRBs remain idle which could easily be poured into the Bangladesh share market through proper guidance from the concerned bodies, he opined.