FE Report (October 25, 2010)
Finance Minister AMA Muhith described Sunday the current state of the country's stock market as "slightly volatile" and claimed that the market was not "overheated".
Muhith maintained that inflow of black money coupled with savers' funds with banks was behind the ongoing bullish trend of the market.
He dismissed the possibility of the stock market crashing like that of 1996 and said, "the market is quite mature now".
The finance minister was speaking at a discussion meeting on "State of the Economy", organized by the Economic Reporters Forum at the National Press Club in Dhaka.
Muhith, however, felt the need for stabilizing the capital market by increasing the supply of new issues and said the government would offload shares of 26 public sector enterprises within next three months. In addition, he said, efforts would be made to attract more private companies to go public.
He said demutualization of the stock exchanges was not possible instantly and responded positively when asked about giving permission to open the brokerage houses in some Upazilas.
"I am in favor of allowing brokerage houses in some upazilas instead of all upazilas of the country," Muhith said.
He said some listed public sector entities, including the Titas Gas Transmission and Distribution Company will offload more shares in the market.
Muhith said the government from time to time changes some regulations to ensure an easy and unhindered access of private companies to the market and help beef up supply of good stocks.
The government will consider allowing the Bangladesh-origin companies -case by case- to remit foreign currency abroad for investment, the minister said.
Pharmaceutical sector wants the lifting of the current ban on remittance of foreign currency abroad for investment, Muhith told the meeting.
The Ministry of Finance (MoF) in August this year asked Bangladesh Bank (BB) to examine the issue and submit a proposal to this effect immediately, it is learnt.
The move was taken by the MoF after the finance minister gave a positive signal in this regard, a top official said.
Presently, foreign currency can be taken outside the country under travel quota and against foreign treatment and for the purpose of study in foreign countries.
Muhith said the development approach of the incumbent government will be focused more on rural areas than on urban centres as majority population live in villages. He hinted at decentralizing public procurement from central level to regional levels in future.
The finance minister, at the meeting, blasted the UNFPA (United Nations Population Fund) for releasing a report on the population, saying, 'the agency has no authority to conduct such a survey.'
The UNFPA in its recent report titled, State of the World Population 2010', estimated the population of Bangladesh at 16.44 now with a population growth rate of 1.4 per thousand.
He said the weakness of the government lies heavily in the implementation of the development programmes, which, he said, will be addressed under a unique method of monitoring 50 to 70 development programmes closely to hasten the development process.
Muhith listed the hike in food prices in international markets as the main reason for inflationary pressure on the economy. The current volatility in food prices might increase further due to international market situation, he added.
"The prices of rice and wheat have shot up in the local market due to the increase in prices of the same items in the international markets. The government will broaden its safety net program to shield the poorest segment of the country from the price spiral of essentials," the minister told the meeting.
"We will have to face enhanced budget deficit in the current fiscal year due to broadening of the current safety net programme for poor families countrywide," Muhith told the meeting.
He said the government is serious about solving the prevailing power crisis as it plans to boost generation by another 4,000 megawatt power within 2012.
Expressing his satisfaction at overcoming the effects of the global economic slowdown successfully, the minister said the satisfaction must not end up in complacency.
In this connection, he said, the banking sector must not expand aggressively as the world economy is yet to come out of the recession.
Responding to a question, the finance minister said the government will not grant India the transit facility without any fee as there exist internationally- set regulations about levying of transit fees on the beneficiary countries.
"We will fix the rates of transit fee following negotiations with India," Muhith asserted.
ERF President Monwar Hossain conducted the meeting, while ERF General Secretary Abu Kawser delivered the vote of thanks.
Finance Minister AMA Muhith described Sunday the current state of the country's stock market as "slightly volatile" and claimed that the market was not "overheated".
Muhith maintained that inflow of black money coupled with savers' funds with banks was behind the ongoing bullish trend of the market.
He dismissed the possibility of the stock market crashing like that of 1996 and said, "the market is quite mature now".
The finance minister was speaking at a discussion meeting on "State of the Economy", organized by the Economic Reporters Forum at the National Press Club in Dhaka.
Muhith, however, felt the need for stabilizing the capital market by increasing the supply of new issues and said the government would offload shares of 26 public sector enterprises within next three months. In addition, he said, efforts would be made to attract more private companies to go public.
He said demutualization of the stock exchanges was not possible instantly and responded positively when asked about giving permission to open the brokerage houses in some Upazilas.
"I am in favor of allowing brokerage houses in some upazilas instead of all upazilas of the country," Muhith said.
He said some listed public sector entities, including the Titas Gas Transmission and Distribution Company will offload more shares in the market.
Muhith said the government from time to time changes some regulations to ensure an easy and unhindered access of private companies to the market and help beef up supply of good stocks.
The government will consider allowing the Bangladesh-origin companies -case by case- to remit foreign currency abroad for investment, the minister said.
Pharmaceutical sector wants the lifting of the current ban on remittance of foreign currency abroad for investment, Muhith told the meeting.
The Ministry of Finance (MoF) in August this year asked Bangladesh Bank (BB) to examine the issue and submit a proposal to this effect immediately, it is learnt.
The move was taken by the MoF after the finance minister gave a positive signal in this regard, a top official said.
Presently, foreign currency can be taken outside the country under travel quota and against foreign treatment and for the purpose of study in foreign countries.
Muhith said the development approach of the incumbent government will be focused more on rural areas than on urban centres as majority population live in villages. He hinted at decentralizing public procurement from central level to regional levels in future.
The finance minister, at the meeting, blasted the UNFPA (United Nations Population Fund) for releasing a report on the population, saying, 'the agency has no authority to conduct such a survey.'
The UNFPA in its recent report titled, State of the World Population 2010', estimated the population of Bangladesh at 16.44 now with a population growth rate of 1.4 per thousand.
He said the weakness of the government lies heavily in the implementation of the development programmes, which, he said, will be addressed under a unique method of monitoring 50 to 70 development programmes closely to hasten the development process.
Muhith listed the hike in food prices in international markets as the main reason for inflationary pressure on the economy. The current volatility in food prices might increase further due to international market situation, he added.
"The prices of rice and wheat have shot up in the local market due to the increase in prices of the same items in the international markets. The government will broaden its safety net program to shield the poorest segment of the country from the price spiral of essentials," the minister told the meeting.
"We will have to face enhanced budget deficit in the current fiscal year due to broadening of the current safety net programme for poor families countrywide," Muhith told the meeting.
He said the government is serious about solving the prevailing power crisis as it plans to boost generation by another 4,000 megawatt power within 2012.
Expressing his satisfaction at overcoming the effects of the global economic slowdown successfully, the minister said the satisfaction must not end up in complacency.
In this connection, he said, the banking sector must not expand aggressively as the world economy is yet to come out of the recession.
Responding to a question, the finance minister said the government will not grant India the transit facility without any fee as there exist internationally- set regulations about levying of transit fees on the beneficiary countries.
"We will fix the rates of transit fee following negotiations with India," Muhith asserted.
ERF President Monwar Hossain conducted the meeting, while ERF General Secretary Abu Kawser delivered the vote of thanks.
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