Capital market to be turned into investment centre: Muhith

Express (August 10, 2011)

Finance Minister AMA Muhith Tuesday expressed the hope that there would be sufficient mobilization of investment in the capital market over the next six months as the government wants to build it up as a significant arena for generating investment, reports UNB.

"It (capital market) isn't yet, but it is turning into an investment center," he told reporters while speaking at the dividend handover ceremony of the Bangladesh Development Bank Limited (BDBL) held at the Ministry of Finance.

Muhith informed that the government would initiate public bonds for investment purposes from the current year though there is a problem over making those fundable.

"It is a problem and once solution to this problem is made, I believe we can have a good bond market," he added.

He said the capital market should operate as an investment center and noted that more public scripts are in the offing.

Asked about the government's intention to offload shares of the State-owned-Enterprises (SoEs) and the state owned banks, Muhith said they would "obviously" enter the market.

He also claimed that the capital market is now in a very stable condition although recently there is some sort of volatility in the market.

"We shall obviously participate in the share market," Muhith said adding that the government is trying for many days to offload shares, but their efforts had so far come unstuck.

He said that the Securities and Exchange Commission (SEC) and the Investment Corporation of Bangladesh (ICB) have already been asked to take necessary steps for offloading the shares of the SoEs.

"The SEC and ICB would decide the right timing and I can't dictate that, as they will make the timing observing the market," he added when asked about the specific timeframe of offloading of shares.

According to sources at the Banking and Financial Institution Division, the government has fixed three fresh deadlines for offloading of shares for 23 SoEs through the issue manager ICB.

As per the fresh deadline, four SoEs -- DESCO, Titas Gas Transmission Ltd, Jamuna Oil Co Ltd and Meghna Petroleum Co Ltd -- given August 14 deadline in the first phase for offloading of shares. Jamuna Oil and Meghna Petroleum have already started offloading shares.

In the 2nd phase, five SoEs -- Essential Drugs Company Ltd, Bangladesh Shipping Corporation, Submarine Cables, Pragati Industries and Hotel International -- have been given a deadline of August 30 to offload their shares.

The remaining SoEs have been asked to offload shares as early as possible. A Banking Division official said that the top bosses of the SoEs might be served show cause notice this time if they failed to comply with the government decision.