The DSE Brokers Association of Bangladesh (DBA), the stock brokers' association, has written a letter to Chief Adviser Dr Mohammad Yunus, urging the inclusion of state-owned and multinational companies on the stock market. The letter, signed by DBA President Saiful Islam, was sent on Tuesday.
In the letter, the DBA highlighted that Bangladesh's capital market has endured severe irregularities, mismanagement, and instability over the past 15 years. As a result, numerous institutions have become almost ineffective, with real returns and capital depleting, leading to a 40 per cent contraction of the market in real terms.
The letter attributed the market's prolonged stagnation to various adverse events, both domestic and international. Specifically, it pointed to the financial crises caused by the scams of 1996 and 2010, which irreparably harmed investor confidence and market integrity. During this period, many investors suffered significant losses due to artificially inflated share prices, the DBA stated.
The letter further outlined how the COVID-19 pandemic in 2020 and the subsequent imposition of floor prices on shares for approximately 20 months inflicted lasting damage. These factors prompted international fund managers to withdraw from Bangladesh, resulting in substantial losses of savings and investments for local investors.
Of particular concern was the looting of thousands of crores of taka through substandard IPO listings. This malpractice has not only created a permanent liquidity crisis but also deepened the crisis of confidence within the market.
The DBA underscored a lack of good governance, transparency, and accountability among regulatory bodies, management, listed companies, market intermediaries, financial auditors, and rating agencies. This has exacerbated the challenges facing the market. The letter warned that failure to address these issues urgently under Dr Yunus's leadership would squander a crucial opportunity to reform the market, restore order, and create an environment conducive to raising state capital and business expansion.
