FE Report (October 26, 2010)
Finance Minister Abul Maal Abdul Muhith Monday said the government wants correction of the stock market but through a gradual process.
"The pinch of the massive correction will be too heavy for the general investors to bear," he said after a review meeting of the stock market at the ministry.
Market is too much liquid and the only solution is to increase the supply of good shares, the minister said adding, "It is not possible to control the market with directives."
He said the meeting decided that the minimum threshold of paid-up capital is revised downward at Tk 300 million from Tk 400 for listing with the bourses.
"The companies must raise Tk 120 million from the general investors," he said.
The Securities and Exchange Commission (SEC) has recently sent the proposal to relax the paid-up capital provision to the finance ministry and it was endorsed in the meeting.
Earlier in November 2009 the finance ministry instructed the market watchdog to fix the threshold at Tk 400 million.
Mr Muhith said the government is determined to offload shares of 26 state-owned companies but it failed the June deadline.
"We want to offload more shares of the listed SoEs and the rest of the companies will come to the market gradually," he said.
The prime minister will approve the summary of the status of the SoEs and after her approval it will be made public, he added.
"The companies will follow the book-building method for offloading shares," Mr Muhith said.
The minister said the finance ministry does not accept the submission of Industries Minister Dilip Barua in which he said there would be resentment from the workers if any SoEs are offloaded.
"As a minister I cannot overrule an observation of another minister but as a ministry we cannot accept his logic," Mr Muhith said.
A finance ministry official said the lock-in period of private placement shares will remain at one year and the SEC will fix the premium price for any company.
The meeting rejected the proposal of the standing committee on finance to relax the lock-in period to increase the supply of shares, he said.
He, however, said the SEC may review the decision if there is a positive impact on the market when Grameenphone private placement shares will hit the market on October 28.
The meeting was attended by SEC Chairman Ziual Haque Khandkar, Bangladesh Bank Governor Dr Atiur Rahman, Deputy Governor Ziaul Hasan Siddiqui, Board of Investment Executive Chairman Dr S A Samad, SEC member Mansur Alam and other officials concerned.
Finance Minister Abul Maal Abdul Muhith Monday said the government wants correction of the stock market but through a gradual process.
"The pinch of the massive correction will be too heavy for the general investors to bear," he said after a review meeting of the stock market at the ministry.
Market is too much liquid and the only solution is to increase the supply of good shares, the minister said adding, "It is not possible to control the market with directives."
He said the meeting decided that the minimum threshold of paid-up capital is revised downward at Tk 300 million from Tk 400 for listing with the bourses.
"The companies must raise Tk 120 million from the general investors," he said.
The Securities and Exchange Commission (SEC) has recently sent the proposal to relax the paid-up capital provision to the finance ministry and it was endorsed in the meeting.
Earlier in November 2009 the finance ministry instructed the market watchdog to fix the threshold at Tk 400 million.
Mr Muhith said the government is determined to offload shares of 26 state-owned companies but it failed the June deadline.
"We want to offload more shares of the listed SoEs and the rest of the companies will come to the market gradually," he said.
The prime minister will approve the summary of the status of the SoEs and after her approval it will be made public, he added.
"The companies will follow the book-building method for offloading shares," Mr Muhith said.
The minister said the finance ministry does not accept the submission of Industries Minister Dilip Barua in which he said there would be resentment from the workers if any SoEs are offloaded.
"As a minister I cannot overrule an observation of another minister but as a ministry we cannot accept his logic," Mr Muhith said.
A finance ministry official said the lock-in period of private placement shares will remain at one year and the SEC will fix the premium price for any company.
The meeting rejected the proposal of the standing committee on finance to relax the lock-in period to increase the supply of shares, he said.
He, however, said the SEC may review the decision if there is a positive impact on the market when Grameenphone private placement shares will hit the market on October 28.
The meeting was attended by SEC Chairman Ziual Haque Khandkar, Bangladesh Bank Governor Dr Atiur Rahman, Deputy Governor Ziaul Hasan Siddiqui, Board of Investment Executive Chairman Dr S A Samad, SEC member Mansur Alam and other officials concerned.
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