SEC urges Ctg giants to offload shares
On the back of a bull-run market, the Securities and Exchange Commission (SEC) chief yesterday urged Chittagong-based entrepreneurs to list their companies, as there is a dearth of quality shares.
“Here in Chittagong, many big entrepreneurs are running their businesses. They can raise funds from the market or offload a portion of their shares in the stock exchange,” Ziaul Haque Khondker said.
Inaugurating the Third CSE Capital Market Fair at the Chittagong Club auditorium, he said his organisation will extend all out support to maintain the capital market growth.
Chittagong Stock Exchange organised the two-day fair.
Although some big companies from the region such as S Alam Group and BSRM are listed, there are many others yet to be listed.
PHP, KDS, Mostafa Group and BSA are some of the big Chittagong giants that are not listed with the stock exchanges, although they often borrow from the banking sector or other financiers.
A supply of high quality shares is necessary to bring stability in the market, the SEC boss said.
Khondker said the market underwent a number of reforms on the regulatory front as well as in operational aspects in the last few years.
“In recent times, young and educated investors are entering the market, showing bright prospects,” he said.
He said in a span of just four to six months, the number of active Beneficiary Owner's (BO) accounts increased to 18 lakh from 12 lakh.
The SEC chief said, “We need to concentrate on retaining trust and confidence the investors demonstrated by providing quality services to them.”
He also called upon investors to take decisions based on accurate information, which is now readily available, and not based on rumours.
Dhaka Stock Exchange President Rakibur Rahman expressed his disappointment over the government's reluctance in offloading shares of the state-owned enterprises (SoEs).
More shares of SoEs need to be offloaded immediately to increase shares in the shallow market, he said. “If the government does not offload more shares right now and the market goes to a heated position before a crash, the bourses will not take any responsibility."
By 2010, he said, the daily average turnover will go up to Tk 3,000 crore from the current Tk 1,000 crore.
CSE President Nasir Uddin Ahmed Chowdhury said: “Our market is mainly based on equity and an equity dominated market is risky to some extent. We need to introduce new products to minimise risk.”
“The bond market needs to be activated along with the equity-based market,” he said.
He said local entrepreneurs often hesitate to come to the market as they fear they will be denied fair prices.
“But with the introduction of a book-building method, a modern price discovery system, private sector entrepreneurs will get fair prices,” Chowdhury said.
The CSE president said the capital market can play an important role in industrialisation and employment generation. The strength and depth of the country's capital market is sufficient to provide financial support to large development projects like the Padma Bridge, civil aviation and power sectors, he observed.
A total of 30 institutions, including CSE Brokerage firms, merchant banks, leasing companies, banks and other CSE listed companies are participating in the fair.