Frequent SEC intervention in share market criticized

ormer Finance Adviser AB Mirza Md Azizul Islam criticised Saturday the role of the Securities and Exchange Commission (SEC) for its excessive intervention on the capital market. He also blasted the government for being indifferent to the need for offloading shares of the corporatised state-owned organisations.
Mirza Aziz termed the present market scenario 'resilient' and sought punitive actions against the individuals involved in the share market scam in 1996.
"The SEC should not intervene on the market regularly," Aziz said as the Chief Guest while inaugurating a
'Orientation Course on Capital Market for Economic Reporters,' held at the Dhaka Stock Exchange (DSE) Training Academy.
"The mechanism for market intervention, if considered inevitable, should be finalized in consultation with stakeholders to avert controversy and choose the right direction,' Aziz, also a former SEC Chairman added.
The day long workshop was jointly organised by the Economic Reporters' Forum (ERF) and the DSE Training Academy. DSE President MD Rakibur Rahman, Professor Abu Ahmed, ERF President Nazmul Ahsan, Executive Directors of SEC Anwarul Kabir Bhuiyan and Farhad Ahmed and ERF General Secretary Sajjad Alam Khan spoke at the occasion.
Mirza Aziz said the market should act on its own without any intervention by the regulatory agency. Regular intervention by the watchdog body harms the normal growth of the market, he added.
Criticising the government, the former finance adviser said the government has no clear idea of the capital market and this has resulted in indifference on the part bureaucrats to the offloading of the shares of the state-owned corporatised bodies.
"I can say for sure that the government has no clear idea about the ways of vitalizing the capital market,'' the former finance adviser said.
"Three state-owned banks, Biman Bangladesh Airlines and BTCL were corporatised during my period as finance adviser so that a considerable portion of their shares are offloaded into the share market,'
"No progress has so far been made to this effect though the incumbent government took the office about one year back.''
Mirza Aziz said the long term investment if made through bank loans would carry potential risks as majority of banks deposits are short-term in nature, which makes maturity mismatch.
He said the potential issuers prefer to bank loans as such loans has no accountability.
Responding to a query, Mirza Aziz admitted that some government officials are protesting the move to offload shares of state-owned enterprises (SOEs) to protect their 'vested' interests.
But they should be aware that they could continue enjoying some privileges even after offloading share of the SOEs, he said.
"A firm intention of the policymakers is necessary to offload SoE shares in the capital market and move forward the country's economy," he added.
The DSE President said the excessive intervention and directives by regulatory authority have been hampering the growth of the capital market.
Rakib said the government is suffering from the lack of coordination in offloading shares of state-owned enterprises and collecting funds from the share market to construct large infrastructure projects.
A section of bureaucrats not having even a minimum knowledge of capital market is acting as barriers to the growth of share market, overtly or covertly, he maintained.
He urged the authorities concerned to settle the litigation at the earliest, terming the Mutual Fund as the important element of the capital market.
Professor Abu Ahmed said both the government and bureaucrats must have clear desire to strengthen the capital market through offloading the shares of government-owned institutions.
Criticising the role of SEC, the capital market analyst said the top bosses of listed companies bracketed in 'Z' category use luxury vehicles, while declaring their companies as loss making.
He said the 'placement business' has emerged in the country in recent times, which should be stopped without further delay.
Anwarul Kabir Bhuiyan said a group of people is spreading the rumour that the face value of issues would be made at Tk 10. This is not true, he added.
"The SEC has not taken any such decision. The issue was only recommended by a body. Its implementation will be a lengthy process and we have many things to examine towards implementing the recommendation," Kabir told the meeting.
A total of 50 ERF members took part at the day-long workshop.