BSEC, BB sit Tuesday to find constructive solutions to markets

The Bangladesh Securities and Exchange Commission (BSEC) and the Bangladesh Bank (BB) officials are going to sit on Tuesday to come up with a constructive solution for both the money and capital market, said the authorities.

The meeting would discuss publicly-listed banks' participation in the market stabilisation fund built under a BSEC instruction. The central bank did not allow banks to transfer any unclaimed dividends to the fund built for market support.

BSEC Commissioner Shaikh Shamsuddin Ahmed said, "Unclaimed dividends belong to the shareholders, not the depositors. We would humbly repeat the point in the meeting with the central bank."

The BSEC would also request the Bangladesh Bank to exclude all bonds from banks' capital market exposure calculation that would allow banks some breathing space to invest in securities, he said.

Besides, the BSEC would reiterate its request to the Bangladesh Bank to adopt a cost-basis while calculating the commercial banks' exposure in securities.

Shaikh Shamsuddin Ahmed said when a bank buys a stock cheap and its price goes high, the price spiral does not increase the bank's investment risk.

"We would again convey the simple logic," he said.

"Otherwise, banks' investment in the stock market would remain a major source of market volatility," added the BSEC commissioner.

The BSEC recently has written to the Bangladesh Bank seeking not to directly ask for information from capital market intermediaries bypassing the actual regulator BSEC as it spreads panic among stakeholders.