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Big Changes Expected in the Stock Market After Elections

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Professor Shibli Rubayat-ul-Islam, the Chairman of the Bangladesh Securities and Exchange Commission (BSEC), has stated that our capital market faces no issues, but the challenges are international in nature. These challenges have transformed into internal problems. Various issues from abroad have affected us. However, significant anticipatory changes are expected during the upcoming elections because there will be a shift in people’s mindset. Over the next five years, businesses, banks, and other institutions will be established. Foreign investments are expected to flow in post-election. To understand the expectations and achievements for the stock market, especially in the context of the economy, BSEC Chairman shared insights in an exclusive interview on Orthosongbad with the financial news reporter Kafil Ahmed.

At present, he mentions that when people refer to the capital market, they typically think of the secondary market. However, in the stock market, there are various types of products. For instance, over the past year, there has been significant progress in the bond market. Treasury bonds and treasury bills have already been introduced, and trading has commenced. We are introducing various types of sukuk and other bonds. In the future, orange bonds and pink bonds are expected. Work is being done on derivatives, and Central Counterparty Bangladesh Limited (CCBL) is becoming active. Our commodity exchange will be established.

The Chairman of BSEC mentioned that in the past, our predecessors considered the secondary market as the capital market. They did not recognize all the components of the capital market. Those who were in charge in the past did not think about the elements of the capital market when they were responsible. My question is why they did not do that. We are working on the missing elements in the capital market that were absent during the past fifteen to twenty years. If those elements had come earlier, today the face of Bangladesh’s capital market would have been entirely different. We are addressing these missing elements amidst the ongoing battle against the COVID-19 pandemic.

He further explained that they are focusing on international aspects to make the secondary market more diverse, akin to the floor price. Due to the departure of funds from the stock market, the government has been blamed repeatedly. This blame does not always fall on the government; sometimes it is due to certain groups or individuals. Those who are 80 percent retailers in the market take various actions without considering the market. In what we are doing, criticism is inevitable. We are providing security to ordinary investors in the market as they constitute 80 percent. However, when compared to institutional investors, who also constitute 80 percent, our actions are being evaluated. If they make decisions like institutional investors, today the people of our country will be financially independent.

“We are working in a way that, with the changing character of the market, institutional investors will gradually increase. The way we are issuing licenses, approvals, and bringing in large groups to the market, we will be able to manage many things simultaneously with foreign entities. Already, big investors from both domestic and international arenas have started coming in. We will never let ordinary investors incur losses and lose their funds. We secure the capital, and then the benefits and gains will follow.”

Speaking about the minimum 30% public shareholding of companies listed on the stock market, the Chairman explained that it wasn’t given much attention in the past. However, they are now addressing this issue, and about 13-14 companies have been identified. Among these, about 7-8 companies are relatively weak in their position. We are putting significant pressure on those companies. For those struggling due to economic conditions, the board has given them time, but they must maintain the 30% shareholding.

BSEC Chairman Professor Shibli Rubayat-Ul-Islam mentioned that many large companies are now coming with rights bonus shares. However, their floating shares were low, and they did not have a 10% presence in the market. These companies are now coming with rights bonus shares to comply with the law. Due to the absence of floating shares in large companies, the price of a single share is in the range of thousands of Taka. Why does this happen? Because there is no floating supply. These companies’ shares are not as widely available to the general public in the stock market but are mostly held by the companies themselves or their stakeholders. All of these issues are being addressed now.

He also emphasized that we are moving forward in every aspect. He explained that we cannot dwell on past situations or look back; instead, we need to prioritize our current reality. The economic situation is not good for everyone, and not all businesses and trades are thriving. These factors need to be taken into consideration. He stressed that to understand reality, it is necessary to give consequences, and creating unrest among people will not lead to anything positive.

Regarding small and medium enterprises (SMEs), the BSEC Chairman, Professor Shibli Rubayat-Ul-Islam, stated that many companies in the SME market with paid-up capital ranging from 30 to 45 crore Taka, but the original market capitalization is around 1.5 to 2 crore Taka. The number of such companies has decreased from more than 50 to possibly around 12 or 13. Among them, 6-7 companies might not exist anymore, and the remaining ones are being rectified.

BSEC Chairman further stated, About government companies, mentioned that their boards and governing bodies hesitate to come under the corporate governance regulatory authority AGM. If well-established companies come, there would be many benefits to the government’s revenue account, and the government would become powerful by getting equity or investment returns. The lack of enthusiasm among companies is due to their boards. They do not want to come under any governance umbrella. Most companies have governance issues and are incurring losses. I think a good board will come among them. When they do, for their well-being, they will follow the corporate governance code for international recognition.

Regarding rumors and misinformation in the stock market, the Chairman commented that due to spreading false information or rumors on social media, many individuals have been arrested, and cases have been filed. Actions are being taken against those who spread rumors without evidence. He mentioned that they don’t publicly disclose the information about these actions, but it is essential to counteract false information to maintain peace in personal and family life.

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Heidelberg Cement Discloses their Q3 Financials

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Heidelberg Cement

One of the listed companies,Heidelberg Cement Bangladesh Limited discloses its financial reports for the first quarter, (January – March 24).

The company’s earnings per share (EPS) was Tk 6.96 paisa in Q1 of the current financial year (January – March 24). EPS was Tk 6.85 paisa during the same period last year. NAV per share was Tk. 74.16 as of March 31, 2024.

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Matin Spinning Reports Impressive EPS Growth in Q3

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Matin Spinning

One of the listed companies, Matin Spinning Mills PLC discloses its financial reports for the third quarter, (January – March 24).

The company’s earnings per share (EPS) was Tk 0.98 paisa in Q3 of the current financial year (January – March 24). EPS was Tk 0.11 paisa during the same period last year. NAV per share  (with revaluation reserves) was Tk. 57.19 as on March 31, 2024.

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EPS hikes for Prime Bank in Q1

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Prime Bank

One of the listed companies, Prime Bank PLC discloses its financial reports for the first quarter, (January – March 24).

The company’s Consolidated earnings per share (EPS) was Tk 1.16 paisa in Q1 of the current financial year (January – March 24). Consolidated EPS was Tk 0.92 paisa during the same period last year. Consolidated NAV per share was Tk. 31.93 as of March 31, 2024.

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