‘Market stabilisation fund should be much bigger’

The Capital Market Stabilisation Fund, which the Bangladesh Securities and Exchange Commission (BSEC) recently formed with an aim to safeguard the bourses and its investors, should be much bigger with the direct participation of listed firms, opined Azam J Chowdhury, the immediate past president of the Bangladesh Association of Publicly Listed Companies.

To this end, listed companies should keep depositing 1% of their annual profits in the special fund, he suggested, so that it can invest big in good stocks during market dips and harvest handsome profits during the market peaks.

Azam J Chowdhury, along with the top officials of the securities regulator, stock exchanges, and the stabilisation fund, was speaking in a programme at a capital hotel on Tuesday.

The Capital Market Stabilisation Fund organised the event to celebrate the birth anniversary of Father of the Nation Bangabandhu Sheikh Mujibur Rahman and introduce its investors' claim settlement process.

Praising the idea, role and the huge potential of the market stabilisation fund, Azam J Chowdhury, also an entrepreneur, said there should always be a strong counterforce for the sake of market stability to combat the actors desperate to manipulate the capital market.

The Capital Market Stabilisation Fund has already allocated Tk250 crore for capital market investment. The latest round of Tk100 crore of the investment, as well as some regulatory steps, has helped rebound the market that suffered volatility immediately after the beginning of the Russian invasion of Ukraine in late February.

The BSEC last year formed the fund out of the piled up unclaimed cash dividends, public subscriptions, bonus and right shares within listed firms and some unclaimed client money in the market intermediaries.

Initial compilation of data suggested around Tk1,000 crore in cash and shares worth Tk20,000 crore should be transferred to the Capital Market Stabilisation Fund. However, half of the cash and a small portion of the shares were deposited by the listed firms till the date.

Meanwhile, many of the firms claim that they are now finding the actual claimant to hand over the piled-up assets, while some firms are still dilly-dallying citing a lack of proper record of the years-to-decades old information.

BSEC Chairman Professor Shibli Rubayat-Ul-Islam, who was the chief guest at the event, said his commission would go tough against the listed companies which would not submit final data of the unclaimed assets of shareholders by the end of this month.

Unclaimed cash had been a consequence of non-communication with the relevant shareholders, companies' ill motive not to disburse cash dividends citing postal failure in distributing dividend warrants.

However, the unclaimed assets transferred to the Capital Market Stabilisation Fund is subject to refund to the actual claimant by a month of claims made.

The Capital Market Stabilisation Fund, in the programme, launched the investors' claim settlement process and handed over refund cheques to 18 investors.

BSEC Commissioner Professor Shaikh Shamsuddin Ahmed, Capital Market Stabilisation Fund Chairman and former principal secretary to the prime minister Nojibur Rahman, Capital Market Stabilisation Fund Trustee Board Member and senior journalist Shyamal Dutta, its Chief of Operations Md Monowar Hossain and others were present at the event.