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Finance minister: Govt to bring 4 SoBs into capital market

  • Published at 05:27 pm February 9th, 2020
Logos of four state owned banks

Currently more than 90% shares of the Rupali Bank Ltd are held by the government, 4.47% by institutes and only 5.34% by the public

Finance Minister AHM Mustafa Kamal on Sunday said the government decided to bring four more state-owned commercial banks (SoBs) into the capital market likely by October this year alongside increasing the exposure of Rupali Bank Limited to further revive the market.

“We’ll bring in four more state-owned commercial banks–BDBL, Agrani Bank Ltd, Janata Bank Ltd and Sonali Bank Ltd– into the capital market. Rupali Bank is already there and its offloading of shares will be raised to 25% (from existing 9.91%). It could take place in one go or in two phases subject to the demand of the market,” he said.

The Finance Minister was briefing reporters after chairing a meeting on offloading of shares by the SoBs held at the Finance Division conference room at the secretariat in the capital.

Bangladesh Bank Governor Fazle Kabir, Financial Institutions Division Secretary Md Ashadul Islam, Finance Division Secretary Abdur Rauf Talukder, Chairman of the Bangladesh Securities and Exchange Commission (BSEC) Md Khairul Hossain, Chief Executives of the four state-owned commercial banks, among others, attended the meeting.

Currently more than 90% shares of the Rupali Bank Ltd are held by the government, 4.47% by institutes and only 5.34% by the public.

Kamal informed that the meeting decided to bring first the Bangladesh Development Bank Limited (BDBL) into the capital market which will be followed by the Agrani Bank Ltd, the Janata Bank Ltd and lastly the Sonali Bank Ltd.

He said a committee has already been formed with a representative from each of these SoBs where the Investment Corporation of Bangladesh (ICB) will act as the coordinator to facilitate the listing of these banks into the capital market.

Since, the Sonali Bank Ltd performs the treasury function, it could take some more time to bring it to the share market but rest of the banks would be listed with the capital market within September or October of this year, the Finance Minister said.

He said the main function of the government is to support or facilitate the share market when asked him what would be the impact of this latest decision on the capital market. “The government has no hand over the behavior of the capital market or whether it will go up for fall down…But the general investors of the country will be benefitted. Seeing the public shares offloading, the foreign investors will be much more attracted to invest,” Kamal added.

In order to increase the exposure of the institutional investment in the market, he said the government, last week, asked seven energy sector state-owned enterprises to complete the valuation of their assets in two months for the divestment of their shares on the bourses.

Out of those seven companies, the Titas Gas Ltd and Power Grid are already listed with the bourses.

Turning to the macroeconomic situation of the country, the Finance Minister said, “Like always, we’ll claim that the economy of the country will not fare bad at the end of this year and all concerned stakeholders believe that we’ll attain our targeted 8.20% GDP growth in the current fiscal year.”

He said there is no bad signal in the economy except one area which is now going negative and it would not be wise to evaluate the whole economy with just one area.

“In all considerations, I think that our position is good. Like I always said, I’ll say again that we’re concerned with one sector which is the capital market. Although capital market is the reflection of the economy, but we’ve long been noticing that our capital market is not aligned with our economy. There are some mismatches, especially with the low level of institutional investment,” he added.

The Finance Minister said since the government wants to move forward the economy in a sustained way, it is addressing the institutional barriers and problems in the life and non-life insurance companies, in the capital market as well as in public and private sector banks side by side amending their legal frameworks.