Take steps to bring multinationals to stockmarket: Tofail

Commerce Minister Tofail Ahmed yesterday asked the securities regulator to take necessary steps so multinational companies operating in Bangladesh get listed on the stockmarket.

“The multinational companies are making hefty profits doing business here, but they are not sharing the profits with local people -- this is not done,” said Ahmed.

He spoke at the inaugural session of a three-day exposition on the capital market at the Institution of Diploma Engineers, Bangladesh. An online financial newspaper -- Arthosuchak -- is organising the show in a bid to prop up the stockmarket, which has been suffering from volatility since the price debacle in early 2011.

At present, 13 multinational companies are listed on the Dhaka Stock Exchange, the premier bourse. These include Bata Shoe, Grameenphone, Heidelberg Cement, Lafarge Surma Cement, British American Tobacco, Berger Paints, Linde and Singer.

Referring to the 2010-11 price debacle, the minister said, “That was an unexpected incident. All market stakeholders, including banks, should have been more careful.”

However, Ahmed said the market is stable now due to regulatory reforms and government initiatives, such as the demutualisation of the stock exchanges, and the enactment and modification of many securities rules and regulations.

“The capital market can play a vital role in the economic development of a country, and we want to carry on our economic progress with the help of our capital market,” the minister said.

A total of 40 companies, including stock exchanges, stockbrokers, merchant banks, asset management firms, credit rating agencies, audit firms and listed companies are participating in the show, which is being sponsored by City Capital Resources, Olympic Industries and Shahjibazar Power Company.

M Khairul Hossain, chairman of Bangladesh Securities and Exchange Commission, said an efficient capital market is required to accelerate a country's economic development.

“But the market capitalisation to GDP ratio in our country is only 20 percent,” he said, citing that it is four times higher than GDP in Hong Kong.

An absence of multi-products is a major weakness of the stockmarket, Hossain said. “Our market is equity based.”

However, the regulator is working on introducing different types of products, such as exchange traded funds and derivatives, by next year, he added. “Once these are in place, our market capitalisation to GDP ratio will be 50 percent.”

Four seminars on the prospects and challenges of mutual funds, investment strategy, good governance in listed companies and role of capital market in economic development will be held on the sidelines of the exposition, which will remain open to visitors from 10am to 8pm until Saturday.

The fair will also offer visitors a variety of entertainment options, including a raffle draw, which will offer Dhaka-Kuala Lumpur-Dhaka air tickets, motorcycles and smartphones. KAM Majedur Rahman, managing director of Dhaka Stock Exchange, Ahmad Rashid Lali, president of DSE Brokers Association, Md Sayadur Rahman, president of Bangladesh Merchant Bankers Association, and Ziaur Rahman, editor of Arthosuchak, also spoke.