Slow process, complex rules discourage big firms to list

Tedious processes and cumbersome rules have discouraged big companies from listing on the stock markets, entrepreneurs say.

It takes a long time to raise funds through the initial public offering (IPO). But funds can be obtained quickly from the banks. For this reason, many entrepreneurs choose banks instead of stock markets to raise capital for expanding their business on time, according to them.

Against this backdrop, the entrepreneurs urged the securities market regulator and stock exchanges to simplify listing rules, to attract big companies to the markets.

The entrepreneurs highlighted the factors that account for dismal listing at an event on “Capital Market of Bangladesh- Prospects and Opportunities for Corporate Entities,” in Dhaka on Tuesday night. The Dhaka Stock Exchange (DSE) organised the event to woo big and profitable companies in the stock markets.

Representatives from more than 100 groups of companies including Akij, BRB, A K Khan and Company, Abdul Monem Group, Transcom, Bashundhara, PHP, Jamuna, Meghna, City Group, United Group, Rahimafrooz, Incepta, Kazi Firms, and Baraka Group attended the progarmme.

“If a company wants to be listed, it has to follow many rules and regulations and the process takes a long time,” Rangs Group Director Romana Rouf Chowdhury told the event.

“Moreover, the entrepreneurs remain worried about the company’s stock price, and the ups and downs of the stock markets,” she added.

Abdul Monem Group Managing Director Mainuddin Monem said, “It is easier to get loans for the banks, though it is not possible to do business with high bank interest.”

However, companies with strong fundamentals feel discouraged to be listed on the stock markets due to lengthy processes, he said. He planned to list two subsidiaries of the Group on the capital market this year.

In response to the entrepreneurs’ demands, Bangladesh Securities and Exchange Commission (BSEC) Chairman Prof Shibli Rubayat Ul Islam said the regulator gets ready to approve an IPO within two weeks if all the documents required for the listing are filed.

“We’re always business-friendly. It’s possible to approve the IPOs in two weeks once the proper and accurate documents are submitted,” he said.

Krishibid Group Managing Director Ali Afzal urged the BSEC to simplify IPO and listing rules to attract SMEs to the markets. Elco Wires and Cables Limited Director Kamal H Mazumder Dollar urged the regulator to reduce the lock-in period of the post IPO to only one year from the existing three years.

Uttara Group Chairman and Managing Director Matiur Rahman proposed to insure for the share price fluctuations so that businessmen get confidence in issuing the IPOs.

Envoy Group Managing Director Abdus Salam Murshedy said the second generation will no longer be interested in business unless the bureaucratic tangle is not circumvented.

Daffodil Group Chairman Sabur Khan urged the DSE to woo IT companies to get listed on the stock markets.

DSE Managing Director Tarique Amin Bhuiyan told the entrepreneurs that the stock exchange will start a pre-IPO advisory service for the non-listed companies to encourage them to be listed.

DSE COO Shaifur Rahman Mazumdar, in his keynote paper, described the benefits of the listing.