Managing Director (MD) of Dhaka Stock Exchange (DSE) ATM Tariquzzaman said currently recession is hurting the stock market and blamed floor price set by Bangladesh Securities and Exchange Commission (BSEC) as responsible for plunge in business.
He said fixing floor price by the regulatory body is a direct intervention in market operation. By law, regulatory body cannot interfere in market operation in a free market economy. He made the observation while exchanging views with news men at a programme organized by Capital Market Journalists Forum (CMJF) at its office in the city on Tuesday.
Ziaur Rahman, president of the forum opened the programme while its general secretary Abu Ali conducted it.
Tariquzzaman who takes over in September this year said floor price is not a solution to market anomalies. It is a direct intervention not allowing the market to determine price based on demand. Neither the regulator nor the stock exchange can fix the price. It is also said in DSE ordinance.
He said, the market situation is bad now. Transaction volume is low. Many are blocked. They are unable to make any sales, nor getting buyers. Everyone knows this is not the rule yet the market is taking this shock.
He said floor price is one of the reasons for the current state of the market. Global recession is another reason. He said he was never in favor of floor price. If you had told me before launching it I would have said 'no'.
He said stock exchange management should have more role in vetting IPOs. It used to have a good role, now much less. Currently BSEC approves all types of public offering including IPOs. Different countries have different laws. Somewhere stock exchange management approves somewhere regulator approves. In our country, regulator approves IPO.
ATM Tariquzzaman took over as Managing Director of DSE in September this year. He talked about issues such as stopping capital market manipulation, de-mutualisation, strategic investment and technical assistance, bringing good companies to market, investor protection and establishing good governance.
ATM Tarikuzzaman said de-mutualization is done by separating ownership from management in the stock exchange. The Act gives preference to individual directors. Trek holders are also represented. But while working, it seems some things need to be changed. We will discuss it with the regulator.
After de-mutualization, the stock exchange has benefited a lot. Ownership and management are separated. No direct intervention possible. Board has no influence in operations. But there is room for more work, said the DSE MD.
About DSE's strategic investors, he said, there were some technical proposals of Shanghai and Shenzhen Stock Exchange. Some work on proposals has already been done, but more left. Implementation delayed due to Corona, he said and hoped the remaining works will be done soon.
Regarding protection of investors, he said, there will be profit and loss in the market. It is not possible to guarantee that no one will suffer loss. However, we are active in ensuring that no one is a victim of fraud, so that no one can embezzle investor's money.
He said surprisingly, DSE is being audited by the same auditor for 36 years. Auditor rotation is emphasized, otherwise there is room for partiality and false reporting, he said.
