The Chairman of the Bangladesh Securities and Exchange Commission (BSEC), Masud Khan, announced a proactive strategy to attract high-quality companies to the stock market. Khan emphasized the importance of enhancing market stability and maturity through this initiative during the 10th-anniversary celebration of CFA Society Bangladesh at Sheraton Dhaka.
Khan highlighted the current imbalance in the market, citing a lack of quality stocks and a dominance of trading in weaker and speculative shares. He stressed the urgent need to introduce strong companies swiftly to provide investors with access to fundamentally sound investment options.
To incentivize robust companies to go public, the BSEC is considering various measures. While discussing potential tax incentives with the National Board of Revenue (NBR), Khan proposed administrative changes to make listing more appealing. One suggestion was the establishment of a specialized tax framework for listed companies to reduce regulatory burdens on compliant entities compared to unlisted ones.
Khan underlined the advantages of listing, noting that publicly traded firms typically improve governance, management professionalism, and succession planning over time. He also unveiled plans to encourage direct listings, especially for multinational corporations, well-governed banks, state-owned enterprises, and reputable local companies. Direct listings could swiftly boost the availability of high-quality shares without necessitating companies to raise new capital.
Recognizing the heavy reliance on retail investors in Bangladesh, Khan emphasized the importance of increasing institutional participation in the stock market. He highlighted that enhanced involvement of pension, provident, and gratuity funds could elevate the market from a frontier-market status to meet emerging-market standards.
Moreover, Khan called for regulatory simplification and digitization to streamline processes related to IPOs, margin loans, and mutual funds. He advocated for full automation of applications for IPOs and rights issues, stating that regulators should focus on necessary regulations and simplify wherever feasible.
At the event, Asif Khan, the society’s president, and M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, also shared their insights on the market.
