Reforms to benefit affected capital market investors: Finance ministry

The reform initiative taken by the securities regulator will benefit those who have suffered through the past misrule and share scams, said the finance ministry in a press release today.

The ministry states that during the last 15 years of the fallen Awami League government, like other sectors of the economy, free looting had taken place in the capital market. During this time numerous weak and almost non-existent companies were listed on the capital markets, it said.

These companies have become a burden for the capital market tomorrow, the ministry said, adding, gradually the true face of these companies is being revealed.

On the other hand, read the press release, through rampant manipulation in this market, the share prices of weak fundamentals, junk companies had been greatly inflated and the money of general investors had been stolen.

According to the press release, various artificial measures, such as the imposition of a floor price and upper and lower limits on circuit breakers, were previously employed to stabilise market conditions. However, it said, with the withdrawal of these interventions, the inevitable consequences of ongoing irregularities, corruption, and manipulation have become more apparent.

To address these issues, an investigation committee has been formed to thoroughly examine past irregularities, manipulation, and corruption, with the aim of stabilising the capital market, protecting investors' interests, and restoring public confidence, read the press release.

A five-member taskforce has been constituted to recommend capital market reforms to improve the capital market, increase investor confidence and ensure international standard good governance, it states. The scope of work of the capital market reform task force formed by the Bangladesh Securities and Exchange Commission (BSEC) has been determined to be 17, said the finance ministry.

If the share market reforms are implemented, the government is optimistic that it will benefit the market in the long term, read the press release.

According to the finance ministry, the BSEC has requested the World Bank for cooperation in the development of the surveillance system to control capital market supervision and manipulation.

It said the BSEC has taken the initiative to increase the supply of good fundamental shares in the capital market. As a part of this, the BSEC is holding a series of meetings with big industrial groups, said the ministry.

For this purpose, initiatives are being taken to ensure that the companies get fair value by reforming the Public Issue Rules 2015 for the listing of companies with good fundamentals in the capital market, according to the finance ministry.

To expand the country's capital market and create new investment opportunities, the finance ministry announced that several government institutions have been listed, read the press release.

The ministry said the government is optimistic that the listing of state-owned companies will not only deepen the capital market but also strengthen the capital base of these enterprises.