Stock market has a good future

Prime Minister's Private Industry and Investment Affairs Adviser Salman F Rahman yesterday said the country's stock market has a good future.

Investors' confidence has returned as the new commission of the capital market regulator has taken many good steps. As a result, turnover of the stock market has increased along with the market capitalisation, he said.

"Our stock market has a long-term problem of having no vibrant bond market. The Bangladesh Securities and Exchange Commission is working on it too. So, I'm seeing good future in the stock market," said Rahman at a webinar on measures proposed in the budget for fiscal 2021-22 for the development of the capital market.

Bangladesh Merchant Bankers Association (BMBA) and Capital Market Journalists' Forum (CMJF) organised the event. Rahman cited a recent report by HSBC, saying that the British multinational investment bank saw good potential of the Bangladesh stock market.

At the event, stock market stakeholders called for widening the corporate tax gap between listed and non-listed companies to make getting listed a lucrative option.

The government took a good decision to reduce corporate tax for listed companies because it will improve capabilities on providing higher dividends, said Sayedur Rahman, president of BMBA.

The tax reduced for non-listed companies too, so the gap remains the same at 7.5 percentage points, which is not lucrative to getting listed, he said.

A listed company has to bear some additional costs in contrast to non-listed ones, he added.

Rahman, also managing director of EBL Securities, recommended widening the gap to 15 percentage points in order to attract companies with good performance records to the market.

Asif Ibrahim, chairman of Chittagong Stock Exchange (CSE), echoed the same, saying the government proposed reducing corporate tax for listed and non-listed companies by 2.5 percentage points, which was their long-sought demand.

But the reduction maintained the same gap, he said.

Ibrahim proposed reducing tax for listed companies by at least another 2.5 percentage points so that the gap with that paid by non-listed companies widens.

Then non-listed companies will be encouraged to get listed, said Ibrahim, who is also the founder chairman of Business Initiative Leading Development.

To enhance the depth of the capital market, profitable state-run companies should get listed but this was not focused in the budget, he said, adding that the government should work on it.

Along with it, income from all the bonds should get tax exemption so that the market gains a vibrant mode, added Ibrahim.

Prof Shibli Rubayat Ul Islam, chairman of the Bangladesh Securities and Exchange Commission (BSEC), said they wanted to be a business-friendly regulator and govern well.

"We have many plans on bond and sukuk, so we hope that the government will help us with the fiscal policy," he said.

"We have requested the government to allow undisclosed money to be invested in the stock market," he added, reasoning that this would attract more funds to the market.

Responding to the recommendations, Rahman said the logic behind the recommendation of widening the corporate tax gap and allowing undisclosed money is logical.

"The budget will be passed soon. We will try to include your recommendations," he said.

Shaikh Shamsuddin Ahmed, commissioner of the BSEC, Hasan Imam, president of the Association of Asset Management Companies and Mutual Funds, Sharif Anwar Hossain, president of DSE Brokers' Association, and Hasan Imam Rubel, president of the CMJF, also spoke at the event.