Home ›› 10 Mar 2022 ›› Stock
Securities regulator BSEC has proposed three mechanisms for enhancing liquidity in the secondary stock market that faced heavy sell-off due to the Russia-Ukraine conflict.
The three mechanisms include the enhancement investment by banks with low exposure limit to stocks, faster formation of a Tk 200 crore special fund by the banks which are yet to do so as per earlier decision and speediest approval of perpetual bond and subordinate bond proposed by the banks to meet the regulatory requirement.
As part of the Bangladesh Securities and Exchange Commission’s efforts to prevent the market fall, it on Wednesday called a meeting with chief financial officers of listed banks aiming at increasing liquidity in the stock market, according to BSEC spokesman Rezaul Karim.
The banks agreed to take the bourse-boosting measures as earliest as possible, he said.
At present, banks are allowed to invest 25 per cent of their capital in the capital market. “The banks that have investment lower than their exposure limit have been asked to raise investment of at least 2 per cent in a few days in the stock market,” said the spokesman.
On March 9, 2020, banks were allowed to form a Tk 200-crore special fund each by taking soft loans from the central bank to invest in the stock market. The fund will remain valid until February 2025 and the banks can take avail of the loans until January 13, 2025.
“Other proposals related to raising the bank's capital will also be approved on a priority basis,” said Rezaul.
“If the three decisions are implemented, we hope that the liquidity problem in the capital market will be solved soon. In addition, 25 per cent of the bank's perpetual bonds have the opportunity to be invested in the capital market. The mechanisms will also increase the institutional investor presence in the capital market,” he said.
