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Dhaka Tribune

100,000C special fund soon to revive capital market

Procedures and mode of operation of the fund would be figured out later

Update : 31 Mar 2022, 06:45 PM

A special fund of Tk100,000 crore is likely to be injected into the stock market fto boost its health.

The announcement came after the Bangladesh Securities and Exchange Commission (BSEC) and the associations of market operators reached an agreement during a meeting on Wednesday.

Representatives of Bangladesh Merchant Bankers Association (BMBA), DSE Brokers Association (DBA), Association of Asset Management Companies (AAMC) and Capital Market Stabilization Fund (CMSF) attended the meet chaired by BSEC commissioner Prof Shaikh Shamsuddin Ahmed.

"We sat to discuss the possible ways of enhancing the liquidity support for the stock market. We have agreed in principle on the formation of the special fund worth Tk100,000 crore," said the BSEC commissioner.

He also said that the procedures and mode of operation of the fund would be figured out later.

On March 21, the BMBA mooted a proposal regarding the formation of a special fund by issuing bonds through the CMSF.

Wednesday's meeting was held as part of BSEC's continuous effort to ensure increased institutional participation in the stock market as a counterweight against market volatility.

The securities regulator on Tuesday sought the support of the insurers' regulator in facilitating the listing of 26 insurers alongside ensuring their stipulated investments in listed securities.

Mohammad Rezaul Karim, BSEC's executive director, said that the market operators and the securities regulator also reached a consensus on enhancing participation of institutional investors during Ramadan to stabilize the country's stock market.

The BMBA representatives of the BMBA assured of injecting fresh funds worth around Tk200-300 crore through the own portfolios of merchant banks during Ramadan, he also said.

He said the representatives of DBA also told the meeting that the stockbrokers would also support the market through injecting around Tk1 crore by each stockbroker through their own portfolios.

The representatives of AMCs said they had already played a vital role in supporting the market through the investment made through their own portfolios of mutual funds, said the BSEC executive director.

BMBA president Md Sayadur Rahman said the securities regulator took into account their proposal regarding the formation of the special fund worth Tk100,000 crore.

"The securities regulator is working on our proposal. The main objective of the meeting was to discuss the ways of enhancing liquidity support for the market," he added.

The DBA said the stockbrokers would increase their participation in the market.

"We said at the meeting that the merchant bankers will ensure liquidity support worth Tk100-150 crore for the stock market," said the BMBA president.

AAMC president Dr Hasan Imam, DBA president Richard D Rozario and CMSF chief operating officer Md Monowar Hossain were also present at the meeting.

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