Chief adviser orders listing of SOEs, govt-linked MNCs to revitalise stock market

The interim government has decided to bring profitable state-owned enterprises (SOEs) and multinational companies (MNCs) with government stakes to the stock market.

"For example, the government holds shares in Unilever. Measures will be taken to offload those shares in the market," said Chief Adviser's Press Secretary Shafiqul Alam.

He said the decision was made at a high-level meeting chaired by Chief Adviser Muhammad Yunus at the State Guest House Jamuna in Dhaka yesterday.

The meeting was attended by Finance Adviser Salehuddin Ahmed, Special Assistant to the Chief Adviser Anisuzzaman Chowdhury, Bangladesh Securities and Exchange Commission (BSEC) Chairman Khondoker Rashed Maqsood, and Financial Institutions Division Secretary Nazma Mobarek.

Based on the issues discussed at the meeting, the chief adviser issued five key directives, including the aforementioned one, aimed at revitalising and modernising the market.

Prof Yunus instructed the BSEC to explore incentive mechanisms to attract large domestic private companies—some of which have annual turnovers of $2–3 billion—in the capital market.

He specifically mentioned major business conglomerates like City Group and Meghna Group, which have large ventures, and directed authorities to take steps to bring them to the market.

In another directive, the chief adviser also instructed to bring in a team of foreign experts to reform the country's stock market effectively.

These experts, with no vested interest in Bangladesh's capital market, will be tasked with delivering actionable reform recommendations within three months, said Shafiqul.

At the start of the meeting, Maqsood gave a brief presentation outlining the progress and reform measures taken in the stock market over the past nine months.

"Many vested interests exist within the stock market," said Shafiqul. "Even when reform initiatives are taken, they are often obstructed by these groups. To counter this resistance, a team of foreign experts — free from any local conflicts of interest — will be engaged."

He continued, "They will propose ways to modernise the market and protect investors and stakeholders. They will submit a report within three months."

Shafiqul also noted that several entities operating in the capital market face allegations of corruption and irregularities. "The chief adviser has directed immediate action against those involved in such activities."

Furthermore, Prof Yunus discouraged large syndicated loans taken by major companies and urged a shift in focus towards fundraising through the capital market—via bonds or share offerings—instead of relying on bank loans, he said.

"The chief adviser has also instructed officials to take necessary measures to encourage companies to raise capital through the stock market rather than through excessive borrowing," Shafiqul said.

Meanwhile, the country's stock market has remained in a downward trajectory for the past nine months since August last year, as the Rashed Maqsood-led commission has allegedly failed to earn the trust of stakeholders and investors by addressing the issues that have plagued the market in the past.

The DSEX, the key price index, which stood above 6,000 points when Maqsood took office on 18 August under the interim government, dropped below 5,000 points, hitting 4,802 on 7 May—the lowest level since 23 November 2020.

Shafiqul said, "The directives are intended to benefit everyone, not just a handful of vested interests. In the past years, we have witnessed nothing short of looting in the stock market. We do not want to allow such opportunities again."

Experts not upbeat

Faruq Ahmad Siddiqi, former chairman of the BSEC, told The Business Standard that none of the directives given by the chief adviser are immediately implementable. "However, since he has chaired the meeting as the head of the government and issued some guidance, it could help restore a degree of investor confidence," he said.

Commenting on the meeting participants, Siddiqi noted that no representatives from market intermediaries or stakeholders were invited. "The chief adviser only heard from the BSEC. He didn't get to know what market participants want or what problems they are facing. As a result, the meeting was one-sided. If he had listened to both stakeholders and intermediaries, he would have gained a more complete picture of the stock market. That would have helped him make more informed decisions."

Echoing Faruq Ahmad Siddiqi's concerns, DSE Brokers Association President Saiful Islam said, "We hope the chief adviser will invite us to hear our concerns directly."