One of our main goals will be to move the country’s economy forward through the stock market in the next four years, said Bangladesh Securities and Exchange Commission (BSEC) Chairman Prof Shibli Rubayat-Ul Islam in an interview with The Business Post’s Niaz Mahmud.
On April 28, the government reappointed Professor Shibli as the chairman of the stock market regulator for another four-year term. He was appointed the BSEC chairman on May 17, 2020. His tenure will expire on May 16 of this year.
What are your achievements as BSEC chief?
I would not say unmitigated success. We started a market that was almost getting closed due to the Covid-19 pandemic. The stock market never seems to have gone through such a bad time. Two years of Covid, and another two years of war in Ukraine and Russia.
During this time, we worked on missing compliances. Now we have to go for their application.
Many innovative products can be made here that were not known in Bangladesh for 50 years. But now everyone has started to become knowledgeable about them. Due to which the bond market has started to develop.
The Dhaka Stock Exchange (DSE) has started working with our derivative market. Now I have given everyone a lot of freedom.
It is not my job to look at indices of initial public offerings (IPOs) and secondary markets from now on. Both of these are the responsibility of the stock exchange, along with the job to look after the capital market. This issue has already been reported to the stock exchange authorities.
Should the stock exchange play a role in attracting good companies?
Companies need to understand why they are not getting listed. Some do not come fearing trouble or monitoring and supervision. Those who are afraid of monitoring and supervision, and those who are good should not be afraid.
We will have a request to the NBR to further increase the tax rate of non-listed companies. We are not asking to reduce the tax, but we are asking that those who are non-listed should pay more tax.
Then maybe we will have good companies here. Then the trouble for the companies will be covered. The cost of monitoring supervision after listing is high. Many people do not want to spend that.
We have interfered with IPOs earlier because there are some bad people on the board who give approval to whoever they want. That is why we have prevented it from doing so. I have faith in the current board of DSE, and I believe they will do it well.
Let them do an IPO from now on, bring good companies so that the market can do well. In this case, we will not change the law. I will see what DSE wants, and I will help them. This will be our policy for the next four years.
From now on, we will develop new compliances. Let the DSE keep looking at the old work, and we will focus on the new work.
Market insiders say that good companies are not coming. What is your assessment of the companies that are coming after you are in charge of the capital market?
In our time, 70 per cent is coming from bank and insurance sector companies. If banks and insurance companies are not good, then who will we bring to the capital market?
There is an obligation to come to the stock market of bancassurance. We have also approved them. But we have approved fewer companies. Maybe 15-20 companies in four years, because the ones given approval previously got stuck in the process.
It was when the former chairman of BSEC M Khairul Hossain left. We later processed them and cleared them within the first year. There were about 30 companies there.
What is causing the foreign investment decline in our market?
The person who was investing Tk 85 in our market made a profit of Tk 20. Now he does not have this Tk 20, because the USD exchange rate has now become Tk 110 – Tk 115. It now costs him Tk 115 to buy one USD.
Even though the person made a profit of Tk 20, due to the exchange rate, he is unable to take his profit. That is why they think that if the USD rate increases further, then their real money will go down further. Fearing this, they withdrew their investment.
How is the response from roadshows abroad?
In mega projects in our country, foreign companies that will invest on a large scale will not come through the BO account. Foreign major investments will be national investments. The branding of this country is very important.
Because we have seen the propaganda about Bangladesh, false information is being given about the country. We have taken steps to prevent such things from happening. We got the result. Investments are coming from different places.
What’ll be the top priority for market development?
We will focus on mutual funds for the next four years. At one time, nobody could buy Treasury bonds. Now everyone can buy, and the turnover is Tk 1 crore to Tk 1.5 crore per day. It is going to be even more popular very fast.
“I have also told Biman Bangladesh Airlines to buy ten aircrafts. We will approve bonds for them. I told them, they do not need to go to the government for money. The foreigners will buy the bonds, and they will get them back after eight years.
I just want to do something good for the stock market. One of the main goals will be to move the country's economy forward through the stock market in the next four years.
What is your opinion about capital gains from the stock markets?
The International Monetary Fund (IMF) gives different advice to Bangladesh every year. One of them is the imposition of taxes on capital gains. But this is not possible in the current context. They discussed the matter with the National Board of Revenue (NBR). NBR will not impose the tax on capital gains.”
Other countries around the world are moving forward with bond issues. We have to go there too. The government’s development work should be done through bond issues. Then the people’s tax burden will be reduced.
What kind of steps is being taken to curb rumors? Also, do you have any advice for investors?
We have forbidden investors a thousand times not to make decisions by looking at social media posts. We recently had three people arrested. From now on, if anyone posts any rumors about the stock market, he will be arrested immediately.
If anyone writes on any topic, post with a price, or do anything else, they will be arrested. So if someone says he buys it and sells it, he will be arrested. The BSEC cannot do everything. So avoid such rumors.
