The interim government is taking steps for policy reform to restore confidence of investors, said Salehuddin Ahmed, finance adviser of the interim government.
"Reforms are being carried out now; we are not creating any new policies. We will not proceed as before, giving advantages or raising some share prices through policy," he said during a meeting with stakeholders at the Dhaka Stock Exchange (DSE) office on Tuesday (7 January).
He went on to mention that several measures, including liquidity support, have already been implemented, and discussions are taking place with brokerage houses, stock exchanges, and market stakeholders.
"We are confident that the market will improve," he added.
The adviser also said foreign and family-run companies should enter the stock market.
“How will the base grow without increasing the number of good companies in the market? Where will the investors invest?” he added.
He noted that an initiative is underway to enlist domestic, governmental, and foreign institutions in the stock market.
Addressing reporters after the meeting, Dr Salehuddin stated that multiple initiatives are currently being implemented to restore investor confidence in the market.
No policy is currently being devised to artificially increase the prices of shares, he added.
At a prior meeting with stakeholders, the adviser had emphasised that foreign companies operating in Bangladesh must be provided with encouragement and incentives to list in the market.
The meeting was attended by representatives from the Bangladesh Securities and Exchange Commission (BSEC), Bangladesh Bank, National Board of Revenue (NBR), Chittagong Stock Exchange (CSE), DSE Brokers Association of Bangladesh (DBA), Bangladesh Merchant Bankers Association (BMBA), Central Depository Bangladesh Limited (CDBL), Central Counterparty Bangladesh Limited (CCBL), Investment Corporation of Bangladesh (ICB), and the Financial Reporting Council (FRC).
During the meeting, stakeholders advised Dr Salehuddin on the importance of introducing duty and policy exemptions to attract foreign institutions and large corporations into the market, calling for discussions with officials from the government, NBR, and Bangladesh Bank.
The adviser also commented on the need to reduce reliance on long-term financing from banks in order to increase liquidity in the capital market and reduce non-performing loans.
"In every country, long-term investments come from the capital market, not banks. Businesses should not rely solely on banks for all their funding. They should have at least 20-30% of their own. If everything is based on debt, how would that work?" he said.
"If anyone obstructs the implementation of policies, actions will be taken against them," Dr Salehuddin added when asked about restoring confidence among those involved in malpractices within BSEC and DSE.
