Regulator to consider DSE analysis on IPOs
The stock market regulator has decided to take into account the Dhaka bourse’ financial assessment of companies seeking to raise funds through initial public offering (IPO) while giving its nod to a firm’s plan on going public.
The bourse will have to carry out the assessment by professional auditors.
Last week, the Bangladesh Securities and Exchange Commission (BSEC) ordered the DSE to form an IPO experts’ panel which will scrutinise the financial reports of the IPO-seeking companies.
The DSE will send its consent to the BSEC on the basis of the analysis of the panel.
BSEC Chairman Khairul Hossain’s order came at a meeting with the board of the DSE and the DSE Brokers’ Association on Thursday.
The commission has approved about 60 IPO proposals, out of a total of 90, in the last eight and a half years’ of the current commission’s tenure, ignoring reservations of the largest bourse.
Some of the newly listed companies were downgraded to junk stocks and many reported lower earnings after their listing, much to the dismay of stock investors. The issue led to disagreements and strained relations between the BSEC and DSE from time to time.
The BSEC has realised that if the financial reports of the newly listed companies were assessed properly prior to their floatation, many would not have received the permission to go public, according to a participant who attended Thursday’s meeting.
This has prompted the commission to decide on accepting the financial assessment of the DSE, he said.
Minhaz Mannan Emon, one of the directors of the DSE, said the panel would be formed very soon comprising reputed audit firms in the country.
He said stock investors have lost their confidence in the market as the financial performance of many newly listed companies has frustrated them.
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