Share market behaviour irrational : MuhithStaff Correspondent
Finance minister AMA Muhith on Wednesday termed the behavior of the share market ‘irrational’.
He made the observation while meeting with the newly elected executive body of Dhaka Stock Exchange at his secretariat office to discuss the next fiscal budget.
‘There should be a solution to it,’ said the finance minister refereeing to the volatility in the share market. He said the market goes up and falls down.
Dhaka Stock Exchange, the country’s main stock exchange, has not given any sign of stability in the last one and half year following its biggest collapse in early 2011.
The DSE index shed more than 4,000 points during the period despite it was provided with a number of incentives.
Rakibur Rahman, the DSE president, said market condition would not stabilise without participation of the institutional investors whose present share in the market is only around two per cent.
He pointed out that growing participation of retail investors is not helpful for a bourse. ‘Retail investors should be driven out of the market for its stability,’ he said.
Securities and Exchange Commission chairman M Khairul Hossain who was present at the meeting
differed with the opinion of the DSE president.
He said lack of confidence among the investors is the main reason for the instability in the market.
The SEC chairman said they would fix the next course of action after getting a copy of the High Court verdict on holding mandatory shares of two per cent by the company directors.
‘I hope that the market will behave rightly then,’ he said.
The finance minister who also held meeting with officials of Chittagong Stock Exchange on the day reiterated that there would be no change in existing facilities like investment of black money in the share market.
Operators of both bourses have placed a set of recommendations for the next fiscal budget.
The recommendations include lowering the tax rate to 0.015 per cent from existing 0.05 per cent on members, lowering
corporate tax on banks and financial entities and incentives for newly listed companies.
The DSE present appreciated the finance minister for carrying out a reform programme in the share market. He said they would place details of the demutualization plan, a major component of the reform, in due time.
He suggested the finance minister for collecting funds from the share market for meeting the construction costs of Padma Bridge, progress of which has remained suspended for the last 10 months because of fund shortage.
The finance minister did not make comments on the proposals of the stock market leaders.
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