BSEC, DSE push each other to press BB

Bangladesh Securities and Exchange Commission and Dhaka Stock Exchange at a meeting on Thursday pressed each other to discuss with the central bank on relaxation of rules connected with banks’ capital market investment, sources said. BSEC chairman M Khairul Hossain presided over the meeting held at its office where BSEC commissioners Md. Helal Uddin Nizami, Md Amzad Hossain, Arif Khan, DSE chairman Siddiqur Rahman Miah, managing director Swapan Kumar Bala, directors M Kaykobad, Md Shakil Rizvi, Mohammad Shahjahan, Khwaja Ghulam Rasul and Sharif Anowar Hossain were present. Representatives of DSE at the meeting said if the Bangladesh Bank allows the banks to calculate capital market exposure excluding long-term equity investment, the banks will get a chance of increasing their stock market investment. Besides, it will automatically pull down some banks’ capital market exposure within the BB-set 50 per cent of consolidated investment limit and put a positive impact on the market accordingly, they said. As the market regulator, BSEC should talk with the central bank in this regard, they said. Following the DSE plea, the capital market regulator asked the premier bourse to press Bangladesh Bank to relax its latest directive regarding banks’ capital market investment. At the same time, the market regulator asked the stock exchange to hold meetings with the central bank in a bid to explain the prolonged market fall and suffering of investors due to banks’ inactively at the capital market. Although the premier bourse has already written a letter to the BB to discuss about banks’ capital market related issues. Despite the fact, BSEC asked the bourse again to discuss with BB regarding the issue. The commission at the meeting also said the DSE and DSE Brokers’ Association as a representative of the brokers should raise their voice regarding the negative impacts of banks’ inactivity on capital market. A BB circular issued in February last year had asked the banks to calculate capital market exposure on consolidated basis scrapping its earlier circular of counting capital market exposure on solo-basis. The central bank, asking the banks to bring down capital market exposure limit within the stipulated limit gradually by July 21, 2016, said the market value of total investment of a banking company in the capital market on consolidated basis could not exceed 50 per cent of the sum of its consolidated paid-up capital, balance in share premium account, statutory reserve and retained earnings as stated in the latest audited financial statement. DSE representatives at the meeting also requested the BSEC to take measures in reducing limit-free share prices movement of newly listed companies for the existing scope of five days, listing newly listed companies under ‘Z’ category in case of none-holding of annual general meeting in the immediate past year and not to allow margin loan for newly listed companies shares. Siddiqur Rahman Miah expressing concern over the prolonged fall in share prices requested the capital market regulator to take proper measures to remove obstacles which are hampering investors’ confidence over the market, a DSE press release said. Swapan Kumar Bala at the meeting said that the government should withdraw the capital gain tax on banks, non-bank financial institutions, merchant banks and brokerage houses under the newly imposed section 53 (0) of income tax ordinance. Bala also raised the role of Bangladesh Bank regarding banks’ capital market investment. Khairual Hossian said that the commission will discuss with the proper authorities for the continuation of existing facilities, the DSE press release said. The commission will also try to remove the obstacles for the investors, he said.