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27 Mar 2013
POLICY SUPPORT FOR STOCK MARKET: BB should keep its promise: bankers

The Bangladesh Bank should keep its promise of giving policy supports to the capital market to make commitments made by banks to the market effective, said Bangladesh Association of Banks chairman Nazrul Islam Mazumder on Monday.
He said the BB agreed to withdraw banks’ provisioning of unrealised losses from the stock market investment but the facility was given only for three months.
‘We had to provision our losses we incurred before and after the particular period which put us in a tight spot in investing in the stocks,’ he said while speaking at a roundtable organised by Association of Bankers’ Bangladesh in a city hotel.
The chief of the BAB, a platform of bank owners, said some banks were sitting on huge idle money which they could invest and change the market scenario.
‘The Bangladesh Securities and Exchange Commission’s chairman often asks us to buy shares. When we buy shares the market goes up, but it falls again when we stop purchasing,’ he said.
Nurul Amin, president of the ABB, a platform of bankers, said the BB should postpone the provisioning of unrealised losses from the stock market investment to facilitate commercial banks to increase their investment in the market.
He also said that commercial banks’ stock market investment should be calculated as per the face value of the shares not the market price.
‘We will place this demand before the Bangladesh Bank in a meeting today (Monday). We think the facility will facilitate us to raise the scope for our investment in the capital market.’ Amin said.
He said share prices hit bottom in the last few days and the drop created scope for investment.
Federation of Bangladesh Chambers of Commerce and Industry president and convener of capital market coordination committee Kazi Akram Uddin said the share prices were very lucrative for investment at the moment.
‘Banks can easily buy and hold shares as it is a guaranteed return,’ he said.
Dhaka Stock Exchange president Rakibur Rahman said banks owed great deal to the stock market as they had raised their capital from the market.
‘Since 2009, banks raised 70 per cent of their capital worth around Tk 21,000 crore which made them so big today. So, banks need to come forward in the crisis situation of the capital market,’ Rakib said.
He said the institutional investors and banks behaved like retail investors, creating problem for the market.
Bangladesh Association of Publicly Listed Companies president Tapan Chowdhury said the capital market could contribute a lot to the economy.
DSE senior vice-president Ahmed Rashid Lali said the top brass of banks perhaps were not well advised by the banks’ departments dealing with the stock investment.
‘Banks’ managing directors take decisions based on the papers given by the departments and I feel there are information gap,’ he said.
Investment Corporation of Bangladesh managing director MD Fayekuzzaman and Bangladesh Merchant Bankers Association president Mohammad A Hafiz also spoke, among others, on the occasion.

Source :: New Age