Brokers seek pre-opening session revival, margin net-off to ease liquidity pressure

Market intermediaries have proposed reviving the long-suspended pre-opening trading session and introducing new trading strategies and products to improve liquidity and revive activity on the Dhaka Stock Exchange (DSE).

The proposals came at a meeting between the DSE and representatives of leading brokerage firms held at the DSE boardroom today (15 September), where participants discussed short-, medium- and long-term measures to address the capital market's prolonged weakness.

The brokers also called for a review of debt repayment deadlines and extensions of Bangladesh Bank's special capital market schemes to provide relief to financially distressed intermediaries.

They proposed introducing a members' margin net-off facility to reduce financing costs and ease liquidity-management pressure on brokerage houses.

The meeting was attended by DSE Managing Director Nuzhat Anwar, senior DSE officials and representatives of leading brokerage firms.

Opening the meeting, Nuzhat said the DSE wanted to hear stakeholders' practical experiences and constructive recommendations on the market's development. 

She said the exchange would consider the proposals and, where necessary, place them before the DSE board and the Bangladesh Securities and Exchange Commission for further action.

She also said preparations for launching a derivatives market were progressing, with the exchange working to complete the necessary technological infrastructure, including software, within the planned timeframe.

Saiful Islam, president of the DSE Brokers Association (DBA), said the market was going through a difficult and frustrating period, while several longstanding issues remained unresolved.

"Identifying the causes of the current situation and finding ways to overcome them are among the key objectives of the discussion," he said, urging market participants to put forward practical solutions rather than merely identifying problems.

Participants also called for inspection and surveillance activities to become more regular, data-driven, risk-based and transparent. 

They recommended that regulatory action be taken after system-based verification of information, with greater focus on unusual price movements and genuine signs of manipulation rather than normal fluctuations in trading volume.

They further stressed the need to diversify the market beyond equities by expanding the range of bonds and other financial instruments. A clearer regulatory framework for dealers' roles and responsibilities was also proposed.

To attract foreign investment, participants recommended identifying and removing policy and procedural barriers, arranging investor-focused seminars and dialogues, and increasing direct engagement with high-net-worth investors and genuine market players.

They also urged the exchange to encourage leading companies to list on the stock market and examine the possibility of allowing share buybacks over the longer term.

Nuzhat said the DSE was strengthening its IT and organisational capacity, with a board-approved plan already under implementation. Training officials and developing data-based software are also underway to make inspection more structured and facilitate data reconciliation.

She said coordinated efforts were also progressing on online account opening, improving retail investor services and introducing T+1 settlement.

The DSE's new website is nearing completion and is scheduled to be launched at a press conference on 22 September. The existing website will remain operational for another two to three months to facilitate the transition and allow improvements based on user feedback.

Nuzhat said the exchange would work with all stakeholders to make its operations more transparent, efficient and accountable while strengthening the broader capital market ecosystem.