DSE Brokers Association of Bangladesh (DBA) has called for sector-based classification of listed companies in Dhaka Stock Exchange (DSE) to align them with international standards.
In a letter to the chairman of Bangladesh Securities and Exchange Commission (BSEC) Khandaker Rashed Maqsood on Wednesday DBA President Saiful Islam said the 22 sector-based classification of listed companies at DSE is not with global market reality.
He said the practice currently followed for listing including the government and corporate bonds and mutual funds has remained unchanged for many years and it must change.
Saiful Islam said most global capital markets now follow the Global Industry Classification Standard (GICS) or Industry Classification Benchmark (ICB), which makes sector-wise market analysis more transparent, comparable and effective.
The DBA letter highlights some inconsistencies in existing classification such as in listing Marico Bangladesh Limited in the 'Pharmaceuticals and Chemicals' sector and British American Tobacco Bangladesh in 'Food and Allied' sector.
But according to international standards, both companies must be logically included in 'Consumer Staples' sector. Similarly, if companies like Walton, Singer, Bata and Apex are classified in 'Consumer Discretionary' sector, their true business character and consumer demand dependence will be properly reflected.
According to DBA, sector-wise performance analysis plays an important role in understanding economic trends, consumer behavior and income growth trends. An outdated or inconsistent classification framework undermines the effectiveness of these analyses.
The DBA further noted that adopting an internationally recognized sector-based classification would enhance market transparency, create comparability with global markets, increase foreign investor confidence, and enable the country's capital market to play a role as a strong economic indicator.
The DBA urged the BSEC to take the initiative to reform the sector-based classification at DSE in consultation with relevant stakeholders and expressed the hope that this step would further strengthen the credibility, trust, analytical depth, and global connectivity of domestic and foreign investors in the country's capital market.
