Stocks
BB Seeks Development of Bond Market
Governor Abdur Rouf Talukder has expressed the desire to develop the bond market in Bangladesh’s stock market. He made this announcement during the Monetary Policy Announcement Ceremony for the first half of the fiscal year 2023-24, held on Sunday, June 18, 2023.
Governor Talukder stated that there are two components in our capital market: the equity market and the bond market. We have been discussing the equity market extensively, but now we want to focus on developing the bond market with the help of the central bank. Under the new banking company law, we have separated the bond market so that banks can invest more in this sector.
He further mentioned that the recent monetary policy aims to reduce the demand for money by increasing the policy rate. The cap on the interest rate for loans, which was previously at 9%, has also been lifted.
Abdur Rouf Talukder has stated that currently, there are four types of inflation-targeting monetary policies being practiced globally. These include interest rate targeting, price level targeting, monetary supply targeting, and exchange rate targeting. The Bangladesh Bank has been adopting the “price level targeting” monetary policy for some time now. However, a new monetary policy called “interest rate targeting” has now been announced, signifying a framework shift.
The new interest rate arrangement is referred to as a “smart” or short-term moving average rate. It will have a capped corridor of 3% above the average interest rate on the government treasury bills with a maturity of 182 days, which spans over six months. Currently, the average interest rate on treasury bills remains below 7%. This means that customers can expect a reduction in loan interest rates by approximately 10 decimal points, or around 10%.
In the new monetary policy, the policy rate has been revised upwards by 50 basis points, resulting in an increase of 6.5% points. This means that commercial banks will have to pay additional interest when borrowing funds from the central bank in times of urgency.
Simultaneously, the reverse repo rate has been increased from 25 basis points to 50 basis points. This implies that banks will now receive higher interest rates when depositing money with the central bank compared to the previous rate of 25%.
Furthermore, changes have been introduced in the policy rates and commercial bank rates. The special repo rate will now be referred to as the Standard Lending Facility (SLF), while the policy rate and reverse repo rate will be known as the Standard Deposit Facility (SDF).
In addition, it has been announced that banks will no longer sell dollars at the discount rate as part of the new monetary policy.
The adoption of monetary policy by the central bank aims to maintain the balance between inflation control and desired economic growth. Monetary policy plays a crucial role in managing the country’s economy. It is a means to control domestic borrowing, money supply, internal assets, and foreign assets, determining to what extent they increase or decrease.
The government has set a target of 6% inflation and 7% GDP growth in the upcoming fiscal year. However, the Bangladesh Bank has emphasized controlling inflation over achieving growth targets.
Officials from the Bangladesh Bank, including Deputy Governor Ahmed Jamal, Kazi Sayedur Rahman, Abu Farah Md Nasser, A.K.M. Sajedur Rahman Khan, Masud Biswas, Chief Economist Dr. Habibur Rahman, Executive Director and Spokesperson Abu Syed Al Mahmudul Islam, along with other relevant officials from the research department, attended the program.
Asif Mahmood, Chairman of ADN Telecom Ltd., extends a warm welcome to Shibli Rubayat-Ul-Islam, Chairman of the Bangladesh Securities and Exchange Commission (BSEC), on his reappointment.
Md. Maruf, serving as an Independent Director at ADN Telecom Ltd., and Md. Mostafijur Rahman, Assistant Manager at ADN Telecom Ltd., were also in attendance at the event. This occasion served as an opportunity for industry leaders to express their support for Shibli Rubayat-Ul-Islam’s continued leadership at the BSEC, highlighting his contributions to the regulatory landscape of Bangladesh’s securities market.
Furthermore, Asif Mahmood emphasized the importance of stability and continuity in regulatory leadership for fostering investor confidence and promoting sustainable growth in the securities sector. He expressed optimism about the future initiatives under Shibli Rubayat-Ul-Islam’s guidance, aimed at further strengthening the country’s capital markets.
The reappointment of Shibli Rubayat Ul Islam as Chairman of BSEC comes at a critical juncture, as Bangladesh’s securities market continues to evolve and expand, with increasing participation from domestic and international investors.
Dhaka Stock Exchange DSE, Bourse on the first working day of the week, 12th May, ended with a drop in Indices and hike in Turnover from the previous working session. This information is known from DSE sources.
985 crore 88 lakh taka shares were traded on this day. 74 crore 50 lakh more tradings were done in DSE today compared to the previous workday, 9th May , Shares worth Tk 911 crores 37 lakh shares were traded last time, Thursday.
The benchmark DSEX added 35.67 points or 5,696 The Shariah-based index DSES gained 7.89 points or 1,250, and the blue-chip index DS30 increased by 11.36 points or 2,026.
Of the issues traded, 93 advanced, 258 declined and 41 remained unchanged.
Padma Life Insurance Limited ranked top gainer on DSE, the share price increased by Tk 2.50 paisa or 10 percent. On this day, the share was last traded at Tk 27.50 paisa. Also Trust Islami Life Insurance ranked top gainer on DSE, the share price increased by Tk 4.40 paisa or 10 percent. On this day, the share was last traded at Tk 48.40 paisa
GQ Ballpen Industries Limited ranked top loser on the DSE, the share price dropped by Tk 4.3 paisa or 2.99 percent. On this day, the share was last traded at Tk 139.20 paisa.
DSE topped on trade is Asiatic Laboratories Limited 47 crore 6 lakh takas of company shares have been traded.
A total of 47 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 66 lakh 66 thousand 55 shares of the companies were traded. The financial value of which is 41 crore 29 lakh taka
The Dhaka Stock Exchange (DSE) and the DSE Brokers Association (DBA) have expressed gratitude towards Prime Minister Sheikh Hasina for her directive to list government companies in the capital market, a move hailed as timely and positive.
The directive was issued during the recent meeting of the Executive Committee of the National Economic Council (Ecnec) last Thursday.
Dr. Hafiz Muhammad Hasan Babu, Chairman of DSE, described the directive as a significant step towards enhancing the dynamics of the capital market. He emphasized that besides invigorating the capital market, this move would also attract foreign investment and promote sustainable development.
Despite previous efforts, government institutions had not been listed in the stock exchange, according to a notification issued by the DSE. The Prime Minister’s directive is seen as a pivotal step towards revitalizing and expanding the economy.
Dr. Babu further remarked, “The listing of reputable companies in the capital market, as directed by the Prime Minister, will greatly benefit the country’s economy. It will also enhance investor confidence.”
Similarly, the DBA released a notification applauding the Prime Minister’s directive, terming it as positive and timely for the capital market.
Saiful Islam, President of DBA, expressed optimism about the directive’s potential to accelerate the country’s capital market and overall economy. He pledged support to relevant government departments and regulatory bodies in implementing the directive, ensuring its positive impact on the economy, including the capital market.
