Stock analysts on Saturday urged the government to encourage multinational companies and also local conglomerates with good records to get listed for boosting stock investors' confidence and ensuring fair distribution of profits.
They spoke at a roundtable titled "Present and future outlook of the capital market of Bangladesh" organized by Bangladesh Merchant Bankers Association (BMBA) and Capital Market Journalists' Forum (CMJF) at The Westin Dhaka.
Prof Abu Ahmed, a former chairman of economics at the University of Dhaka, said most of the companies which were allowed to enter the stock market over the past one decade did not have that good of a performance record.
"Unilever, Nestle, and MetLife have been working in the country for years and logging huge profits every year…Why are they not sharing their profits with the people?" he asked.
Many of those are listed in neighbouring India and Pakistan but not here. The government should think about it, he also said.
The National Board of Revenue (NBR) reduced the corporate tax gap between listed and non-listed companies by 2.5 percentage points to bring it to 7.5 percentage points, said Ahmed.
However, stock market analysts had repeatedly urged lifting the gap to 20 percentage points from the then 10 percentage points, he said.
However, Faruq Ahmad Siddiqi, a former chairman of the Bangladesh Securities and Exchange Commission (BSEC), questioned the rationality of companies coming to the stock market for funds when they can easily avail long-term ones from banks.
Unless the easy, long-term loans are stopped and good governance ensured, the companies will not come to the stock market. Unless companies with good performance records get listed, the stock market will not get developed, he added.
The tax gap can never be attractive, even if it reaches 20 percentage points, because there are a number of ways to evade taxes, he said.
The government reduced the corporate tax for both listed and non-listed companies in order to reduce the overall corporate tax, which is comparatively low abroad, said Mohammad Jahid Hasan, a member of the NBR.
"The share price valuation in our stock market should be accurate to attract companies with good performance records," said Prof Mohammed Helal Uddin, director (research) of the Centre on Integrated Rural Development for Asia and the Pacific (Cirdap.)
Unless there are good prices, good companies will not be interested to get listed even if big tax incentives are offered, he added.
A lack of returns in the money market and banking sector and other avenues are prompting investors to move towards the stock market, said Hasan Imam, president of the Association of Asset Management Companies and Mutual Funds.
The mutual fund industry is looking to expand its footprint across the country together with brokerages and the merchant bank ecosystem, he added.