Prof Shibli Rubayat Ul Islam, chairman of Bangladesh Securities and Exchange Commission (BSEC), on Monday said that once introduced, the commodity exchange in the country would eliminate the scope for under-invoicing and over-invoicing.
“Work is going on to introduce commodity exchange in the country. If commodity exchange is introduced, then it will be possible to see both the international market and the scenario in the local market while staying inside the country,” he said.
The BSEC Chairman said this while addressing as the chief guest in a discussion titled “Problems and Challenges of Capital Market in Bangladesh” organized by the Economic Reporters Forum (ERF), at its auditorium in the capital, reports UNB.
Terming generating employment as one of the major problems of the country, the BSEC chairman said: “We were working hard to accommodate a suitable workforce with better jobs with higher salaries. But, all of a sudden, the (Ukraine-Russia) war started and thus had an impact on the global economy.”
He said although institutional investors occupy around 80-90% of the capital market across the globe, the situation is totally reversed in the country as around 80% of investors in the capital market here are small investors.
“We need to take necessary measures to give protection to the small investors. That's why we've taken a temporary measure through floor price. But it's not a permanent measure,” he added.
The BSEC chairman mentioned that if the commodity exchange is launched in the country, then anyone can know the price of rice in Ghana while staying in Bangladesh as well as which countries want to buy Bangladeshi RMG items at what price.
“With commodity exchange, we'll be able to see the international market and the local market while staying at home for which there will be no scope for under-invoicing and over-invoicing,” he noted.
DSE chairman Eunusur Rahman while highlighting the various challenges of the capital market said that the number of knowledgeable investors in the country is very small.
“We often make investments after taking advice from others. This is a big challenge for us. Besides, the number of institutional investors and skilled workforce is also less here in Bangladesh,”
Noting that the policy support in the country is still insufficient, he said that there are still caps on the bank interest rates, which means that anyone can take loans from banks at a 9% interest rate.
But large companies can take loans from the banks at an 8% interest rate, the DSE chairman said, adding that for this they might not go to the capital market as they would have to give dividends at a higher rate.
CSE Chairman Asif Ibrahim said that there is no commodity exchange in Bangladesh considering the overall size of the economy.
“We'll ink an agreement very soon with the Indian multi-commodity exchange. We've already sent the draft rules to BSEC in this regard. If we get approval, then hopefully we'll be able to launch a commodity exchange here,” he added.
