BM Desk : After being listed on the capital market, the costs of companies increase in various sectors. That is why no company will be interested in increasing those costs to get only 5 percent tax benefits. That is why no good company has come to the stock market in the last five-six years.
Syed Nasim Manjur, an industrialist and Managing Director of Apex Footwear, made such comments at a discussion meeting organized on the stock market.
Syed Nasim Manjur, an industrialist and the Managing Director of Apex Footwear, made these remarks during a discussion meeting titled ‘Expansion of the Capital Market: Sustainable Economic Development Framework’ organized by the Bangladesh Merchant Bankers Association (BMBA) on Tuesday (July 08). He represented entrepreneurs and listed companies as an invited guest at this meeting held at the Sonargaon Hotel in the capital. In his address, he shared his views on the reasons why reputable companies are hesitant to get listed on the stock market.
He stated that there are numerous issues within our stock market that pose significant barriers for reputable companies seeking to list. Many firms are apprehensive about entering the stock market due to the existing rules and regulations that could lead to financial losses, which is not a realistic scenario. If a company fails to distribute dividends at the end of the fiscal year, it must confront various forms of accountability. Furthermore, it typically takes one and a half to two years to secure funding from the stock market via an initial public offering (IPO). There are no substantial tax incentives for being listed, and the system for appraising company assets is inadequate. The market has been structured in a way that restricts everyone due to the actions of a few unscrupulous individuals – this situation is unacceptable.
The chief guest of the meeting was Anisuzzaman Chowdhury, special assistant to the chief advisor of the current caretaker government, appointed with the rank of state minister. Dhaka Stock Exchange (DSE) Chairman Mominul Islam, Chittagong Stock Exchange (CSE) Chairman AKM Habibur Rahman, PRAN-RFL Group Director Uzma Chowdhury, Finance Ministry’s Additional Secretary of Financial Institutions Division Sayeed Qutub, and Investment Corporation of Bangladesh (ICB) Managing Director Niranjan Chandra Debnath were present as invited guests. BMBA President Majeda Khatun delivered the welcome address. BMBA’s former President Mohammad A Hafiz, capital market regulator BSEC Director Abul Kalam and others also delivered speeches. LankaBangla Investments CEO Iftekhar Alam made a presentation on the existing obstacles in listing new companies in the stock market.
In his address as the chief guest, Anisuzzaman emphasized that the financial market and the capital market serve as the two foundational pillars of the economy. For the economy to progress, it is essential that both pillars are strengthened equally. The previous administration has left the economy in a precarious condition, with numerous banks still grappling with liquidity issues. Under these circumstances, it is unrealistic to anticipate a recovery in the capital market. Nevertheless, the current government is prioritizing efforts to support the capital market.
DSE President Mominul Islam remarked that both the government and the regulatory body overseeing the capital market have historically treated the stock market as if it were a child. This approach has hindered the market’s ability to develop its own strength up to this point. Over the past 15 years, only 138 companies have been listed on the stock market, raising concerns about their quality.
Industrialist Uzma Chowdhury pointed out that there is a lack of product diversity within the stock market. Additionally, while there are many discussions regarding plans and changes in the market, the actual implementation of these initiatives appears to be minimal.
During the meeting, various challenges were identified regarding the process of listing new companies on the stock market. These challenges encompass the lengthy duration required to finalize the company listing process, inadequate company valuation systems that lead to reputable companies not receiving fair prices, insufficient incentives for entrepreneurs, the enforcement of minimum shareholding requirements, biases in direct listing regulations, the absence of delisting provisions, among others.
