Immediate changes on cards to restore investor trust: Salehuddin
We are committed to resolving existing and past issues in the stock market so that both local and international investors feel secure in their investments, he says
Emphasis will be placed on implementing immediate solutions and medium to long-term plans to restore investor confidence in the stock market, said Finance Adviser Salehuddin Ahmed.
The finance adviser made the remark while briefing reporters about the government's efforts to support the market's recovery following a meeting with the Bangladesh Securities and Exchange Commission (BSEC) in the capital's Agargaon on Wednesday (30 October).
This was Salehuddin's first visit to BSEC after assuming his new role, where he discussed the current market situation for approximately 45 minutes. The meeting was attended by the BSEC chairman along with other senior officials of the regulatory body.
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Wednesday's stock market rally reflected growing optimism as the Dhaka Stock Exchange (DSE) benchmark index, DSEX, climbed by 148 points, marking a second consecutive day of gains. Turnover also exceeded Tk500 crore for the first time in 20 days.
The optimism was mainly driven by the news of the finance adviser's visit to discuss the ongoing capital market crisis.
Briefing reporters, Salehuddin said efforts are ongoing to address the prevailing issues in the stock market. "Initiatives are being taken to eliminate complexities in the existing systems and establish an internationally competitive stock market," he said.
Mentioning that the discussions with the BSEC covered liquidity crises and mutual fund concerns, Salehuddin said some immediate changes may be introduced, however, all solutions will be executed within the government's authorised limits.
However, Salehuddin did not address potential government incentives or the removal of the 15% capital gains tax imposed on individual investors when questions on the matters were placed by reporters.
BSEC Chairman Khandaker Rashid Maksud, during the briefing, said key policy proposals were discussed with the finance adviser, adding that the meeting covered extensive discussions on topics such as negative equity, liquidity support, tax reform, buybacks, and banking sector reforms.
Wednesday's market
On Wednesday (30 October), the DSEX rose by 148 points, closing at 5,165. The blue-chip index, DS30, also gained 58 points, reaching 1,916, while the Shariah-compliant index, DSES, increased by 23 points, closing at 1,136.
Market turnover increased by 49.8% to Tk519 crore, which is much higher than Tuesday's turnover of Tk347 crore.
In its daily market commentary, EBL Securities noted that the benchmark index of the capital bourse extended its positive momentum for two consecutive trading sessions, reflecting investors' buying appetite driven by favourable earnings and dividend declarations from listed companies amid anticipation of several stimulus from the regulator to revive investor's market sentiment.
According to the commentary, buyers continued showing their dominance across the trading floor on Wednesday, bolstered by better-than-expected earnings and dividend declarations of the listed companies.
Anticipation of several policy support from the regulator to enhance liquidity and reduce tax burdens further garnered the buying momentum, leading the benchmark index to settle in positive territory for two consecutive sessions, the commentary added.
Despite the market displaying recovery signs and attracting bargain hunters due to many stocks trading at significantly low levels, overall participation remains below par, and the sustainability of this upward trend is contingent on broader political and economic stability, the brokerage house said in its commentary.
