Bangladesh Development Bank eyes January launch

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Bangladesh Development Bank eyes January launch
Md Hasan

The much-awaited formation of state-owned Bangladesh Development Bank Ltd (BDBL) has reached the final stages with its registration completed with the Office of the Registrar of Joint Stock Companies and Firms.

The central bank also approved a plan for BDBL to run as a scheduled bank.

The registration was completed on November 16.

A merger between Bangladesh Shilpa Bank (BSB) and Bangladesh Shilpa Rin Sangstha (BSRS) shaped up into BDBL.

Officials say BDBL will be able to launch operations in January 2010, with industrial financing, commercial banking and merchant banking at the heart of its services.

“This is a good step taken by the government,” said Md Mizanur Rahman, managing director of BSRS. “We expect BDBL to compete with other commercial banks.”

The incorporation and business of commence have been permitted by the government, he said. It will sign a vendor agreement with the government soon.

BSB and BSRS, with almost similar functions, were established in 1972 to provide loans and facilities to industrial institutions, help set up new industries and expand investment in Bangladesh.

But the two companies failed to meet expectations. In 1992, the government moved to privatise BSRS, which remained unaccomplished due to some complexities.

The companies’ board will sit on December 8 to fix a vendor agreement schedule with the government, the BDBL organogram, employee pay structure and select office space for the bank’s headquarters.

As per merger plans, the accounts of the two organisations will be consolidated by December 2009.

The paid-up capital of the merged company will amount to Tk 400 crore. The present paid-up capital of BSB is Tk 200 crore, and Tk 70 crore for BSRS. Making adjustments to the reserve funds of the two companies will raise the capital. In the meantime, BSRS raised its funds to Tk 200 crore.

As per BDBL’s operational plans, the banks will operate across the country by setting up branches at district levels. At present, BSB has 15 branches while BSRS has two.

BSB and BSRS have financed 174 and 69 projects so far, according to the companies’ websites. As many as 1,000 officials are working for the two organisations.

hasan@thedailystar.net

Mercantile Bank to finance purchase of tractors by farmers

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Mercantile Bank to finance purchase of tractors by farmers

From now on, Mercantile Bank Limited will finance the farmers directly to purchase tractors for the development of agricultural sector, said a press release.

In this connection, an agreement was signed between Mercantile Bank Limited and ACI Motors Limited, the sole distributor of Sonalika Tractors, in the city recently.

Mercantile Bank Managing Director (Current Charge) AKM Shahidul Haque and Business Director (Agribusiness) of ACI Motors Dr Khandaker Helal Uddin signed the agreement on behalf of their respective organisations in presence Md Abdul Jalil, MP, chairman of Mercantile Bank Kimited.

Local companies to get forex loans from PCBs

http://www.newagebd.com/2009/nov/23/busi.html#1

Local companies to get forex loans from PCBs
Asif Showkat

The private commercial banks are actively working to bring the credit system at a competitive level offering loans in foreign currencies to local businesses at the interest rate of global market standard, official sources said.

‘We have advised the local business conglomerates not to take costly credit from the international sources,’ said Atiur Rahman, governor of the Bangladesh Bank recently.

Biman Bangladesh Airlines will save nearly seven million dollars taking loan from local private commercial bank instead of foreign sources, he mentioned.

According to a recent bidding, Eastern Bank Limited has won the bid to finance Biman with $117 million beating foreign Citibank NA while Apexadelchi Limited will take a credit of 7 million Euro from the Bank Asia Limited.

Interest rates for the loans will be EURIBOR (European Inter-bank Offered Rate) plus 3.5 per cent, a source at the Board of Investment said.

The scrutiny committee on foreign loans of the BOI last week has approved the Apexadelchi loan to enhance the working capital of the company which exports footwear to Europe and China, the source added.

The EBL sources said that the loan agreement with Biman is likely to be signed in December next.

‘This is for the first time in history that a Bangladeshi bank has taken the initiative to enter into a deal, which was earlier done only by foreign banks,’ Ali Reza Iftekher, managing director and chief executive officer said referring to the agreed loan for Biman.

The central bank’s recent lifting of restrictions on offshore banking or foreign currency loans for local banks has broken the monopoly that foreign banks enjoyed earlier in case of banking outside the country’s export processing zones.

Only foreign firms in the EPZ were entitled to foreign exchange loans before the lifting of the restriction by the central bank.

Now there are nearly a dozen local and foreign banks providing offshore banking services to investors and businessmen in EPZ and all its transactions are in foreign currencies, mainly in US dollar.

Providing all credits to the Bangladesh Bank, the EBL’s Ali Reza Iftekher said, ‘It has helped a lot as the central bank has agreed to use its foreign exchange reserve for national interests.’

Irteza Reza Chowdhury, senior executive vice-president of the Bank Asia Limited told New Age that his bank would arrange the foreign loan signing ceremony with the Apexadelchi today.

BB cuts bank service charges

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BB cuts bank service charges
Rejaul Karim Byron

Bangladesh Bank has once again lowered different banking charges, fees and commissions to provide assistance to businessmen hurt by falling exports.

The central bank yesterday sent a letter to all commercial banks on the new decision.

The highest rate of tri-monthly commission for opening deferred L/Cs may be fixed at 0.50 percent of the total amount, down from 0.60 percent now.

The L/C confirmation charge has been fixed at a maximum of 0.20 percent from the existing 0.25 percent. L/C advising, amendment and transfer charges have been reset at a maximum of Tk 750 from the current charge of Tk 1,000.

Charges for data fax, handling, copy document endorsement have been cancelled, the central bank said in the circular.

Commissions on export bill negotiation and export bill collection may be set at a maximum of 0.15 percent. Earlier, the banks had fixed these charges independently.

When the banks give loans to any customer in foreign currency from the export development fund, the rate of interest will be fixed in line with LIBOR (London Inter-bank Offer Rate) plus 1 percent.

Exporters will not have to pay overdue interests in case of site payments for irrevocable L/C. Site payment means importers will pay the bank on receipt of export documents.

In the backdrop of falling exports, the government is going to provide different types of incentive to the exporters, said a Bangladesh Bank official. The government has already prepared a package.

The finance minister is likely to announce the package after returning from Turkey and the UAE. These steps have been taken in the banking sector as part of the measure.

Investment is also experiencing a sluggish trend. The cut in service charges is part of a measure to boost investment.

Earlier in September last year, the central bank cut service charges, commissions and fees. Earlier this year, the BB has asked Bangladesh Association of Banks and Association of Bankers Bangladesh to review the charges, fees and commissions.

The Federation of Bangladesh Chambers of Commerce and Industry sent a proposal to the BB four months ago to cut banks’ charges, fees and commissions.

Welcoming the BB decision, Helal Ahmed Chowdhury, managing director of Pubali Bank, said cutting charges and commissions is a continuous process.

“We have reduced it at least twice in the past one a half year,” Chowdhury said.

Farm, SME get priority in BB’s 5-year plan

http://www.newagebd.com/2009/nov/16/busi.html#1

Farm, SME get priority in BB’s 5-year plan
Staff Correspondent

Reaching out baking services to commoners across the country to give them maximum benefits of financial activities will be a key component of the Bangladesh Bank’s vision for the next five years.

The motto of ‘financial inclusion’ of the masses through increasing disbursement of farm loans and promotion of small and medium will be the core theme of the central bank’s five-year strategic plan now under preparation.

‘We want to establish a strong, dynamic and credible central bank. Apart from its traditional function, we want to serve the people in the best possible manner for giving them fruits of economic development,’ Murshid Kuli Khan, a deputy governor of Bangladesh Bank, said briefing journalists about the plan.

Food security of the people and generation of more income opportunities through jobs and self-employment would be possible if the goals to be set under the strategic plan can be attained, he told a questioner about the key objectives of the plan.

The five-year strategic plan, envisioned by the present central bank governor, Atiur Rahman, also development economist, is expected to be prepared and made public in the first half of January 2010.

The central bank organised a two-day workshop titled ‘Strategic Planning and Management Strengthening Workshop’ in Dhaka on November 13-14 and received inputs for preparation of the strategic plan.

Explaining the theme of financial inclusion, the deputy governor mentioned that the Bangladesh Bank might promote ‘one upazila, one product’ concept to encourage entrepreneurs of small and medium enterprises to take ventures based on specialisation of knowledge and skill in each locality and region.

‘Guava of southern region or mango of Rajshahi may be considered for supporting the projects. The central bank will play the role of a guardian in encouraging commercial banks to act accordingly,’ said Khan.

BB services to go rural

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BB services to go rural
The central bank launches upazila scheme next year to generate jobs

Star Business Report

The Bangladesh Bank (BB) will introduce next year a loan scheme styled ‘one banking product in each upazila’ across the country in an effort to generate jobs for more people.

The central bank will implement the programme under a five-year strategic plan from 2010 to 2014, BB Deputy Governor Murshid Kuli Khan said at a press briefing at the bank’s conference room yesterday.

Khan said the plan aims at taking the services of the central bank to more people apart from its traditional roles in controlling inflation and regulating banks. In line with the plan, highest emphasis will be laid on small and medium enterprises after agriculture sector.

Under the plan, different loan programmes will be launched targeting upazilas and villages so more rural people are get involved with the process of economic development.

Necessity of taking diversified programmes for different areas will surface in future and schemes will be taken accordingly, Khan said.

A workshop was organised for senior officials of the central bank at Jamuna Resort on Friday and Saturday to prepare the strategic plan, he said.

Earlier opinions were taken for the plan from the finance ministry, commerce ministry, Securities and Exchange Commission, Board of Investment, Economic Relations Division, various donor agencies and business bodies.

Khan said the plan is now at the final stage and would be launched soon.

The details of the plan will be made available through the Bangladesh Bank website.

The deputy governor said: “A vision of the future Bangladesh Bank was in our consideration while formulating the strategic plan. We want to see such a central bank where changes are visible and a continuous process.”

He said use of technology would increase to cope with the reality of globalisation. There will be scope for reaching the fruits of technology to each household. The future Bangladesh Bank will always encourage financial inclusion, he added.

Khan said: “We did not take any assistance from foreign consultants in preparing the action plan. In the plan there will be specific vision for every department of the central bank. The schemes described in the strategic plan will be evaluated every year.”

BB to roll out strategy for efficient banking

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BB to roll out strategy for efficient banking
Bss, Dhaka

Bangladesh Bank (BB) has prepared a five-year strategic plan to ensure efficient banking.

The plan, first of its kind in the country, focuses on stable monetary policy, automation, skilled development, capacity building and prudent credit policy.

BB Governor Atiur Rahman will disclose further details at a press conference at the central bank headquarters today.

The plan that received final touches at a weekend meeting at Jamuna Resort will be effective from January.

“We have prepared a strategic plan to face future challenges and make the central bank more efficient to support and develop the sector,” said Rahman who presided over the meeting.

“At the meeting, we have noticed that BB should continue its support to the agriculture sector and increase financial assistance to small and medium enterprises by two to three times than now,” the BB chief said.

Rahman said the overall investment would get more attention in the plan and BB will encourage more investment in agriculture and SMEs.

BB’s Automated Clearing House begins trial run

http://www.newagebd.com/2009/nov/09/busi.html#2

BB’s Automated Clearing House begins trial run
United News of Bangladesh . Dhaka

Bangladesh Bank on Sunday launched the trial run of newly introduced Automated Clearing House, as part of its move to digitalise the country’s banking system.

Under the new automated system, banks will not need to send their cheques physically to the clearing house at the central bank for effecting fund transfer. Now the banks can do the job online from their own offices using machine readable cheques and the funds will be transferred electronically.

However, the banks can also drop their cheques at the ACH at Bangladesh Bank where the machine can take image and data of 300 cheques per minute.

The new magnetic ink character recognition encoded cheques have already been introduced by different banks to integrate with the new system. The encoded cheques will reduce the cheque clearance time to only two hours from the two days required so long.

Initially, the new ACH will run for about 1100 branches of different banks within the Dhaka city. Gradually all the branches across the country will come under the new system.

Bangladesh Bank is implementing the ACH with $8.5 million financial support of the DFID, UK.

Formally launching the trial run of the new ACH system, Bangladesh Bank governor Atiur Rahman said the new system would take few months to be fully operational.

On the first day, three banks — Dutch Bangla Bank, Janata Bank and Dhaka Bank — commenced their online cheque clearing.

The BB governor said the trial run of ACH would continue until all the banks were ready to be integrated into the new system.

He noted that so far 35 of the 39 banks, both private and state-owned, completed all preparations to introduce the new system.

The central bank governor hoped that the rest of the banks will complete their preparations within few months to get the new ACH system fully functional.

He said the main benefit of the new ACH system will go to the business firms and to the remittance earners as they will get their payments within a day instead of waiting for days.

This will facilitate the online banking as well.

‘ACH system is based on latest state-of-the art technology. It’s a most secured system,’ he said.

The BB governor also said the existing clearing system would also continue alongside the new one.

He said the new automated system will contribute one per cent to the GDP through expediting the business transactions.

The function at the central bank was also addressed by deputy governor Ziaul Hasan Siddiqui, ACH project director Chowdhury Mohidul Haque and DFID Bangladesh chief Chris Austin.

A BRAC Bank press release on Sunday said the bank today starts the systems integration testing with the central bank for the Bangladesh Automated Clearing House.

BRAC Bank has been short-listed by the Bangladesh Bank for the BACH project to go live as a pilot basis. BRAC bank has been keeping the pace of developments to meet up the deadline of Bangladesh Bank, the release said.

MoU for postal money order thru’electronic fund transfer signed

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MoU for postal money order thru’electronic fund transfer signed
Bangladesh Post Office has recently signed a memorandum of understanding (MoU) with Information Technology Consultants Ltd (ITCL) for introducing postal money order service through Electronic Fund Transfer (EFT) solution.

M Mobasherur Rahman, director general of Post Office, and Kazi Saifuddin Munir, managing director and CEO of ITCL, signed the MoU on behalf of their organisations.

Among others, AKM Rafiqul Alam, additional director general (Postal Service) and AKM Rafiqul Islam, director (Mails) of the post office, and Zubaer Ahmed, senior executive officer of business development, and Nurul Huda, relationship manager from ITCL, were present in the signing ceremony.

Turnover may rise to Tk 3,000cr by year-end, says DSE chief

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Turnover may rise to Tk 3,000cr by year-end, says DSE chief
Bss, Dhaka

Daily turnover on Dhaka Stock Exchange may increase to Tk 3,000 crore by year-end if the current trend of investor confidence continues, said DSE President Rakibur Rahman yesterday.

Participants of the seminar were also optimistic about a stronger and more stable capital market when they discussed a new system of raising capital through issuing primary shares.

DSE organised the seminar in the city, bringing in stock-market stakeholders, experts and potential issuers together to discuss the potentials and the problems of book building methodology, a new system of determining the issue prices of an initial public offering.

Most participants have seen the new system as a supportive tool to ensure long-term stability and transparency in the capital market.

The DSE president was seemingly upbeat while making his opening remark before a big gathering of capital market experts, stockbrokers, present and potential issuers, merchant bankers and high officials of the stock market watchdog.

He observed that investor confidence had got the stronger ground, shrugging off all confusion and fear.

“We used to be scared to see the index beyond 3000-mark or the daily turnover above Tk 1,000 crore. But the situation had changed and the index remained stable over 3,000 points for a while when the October average of daily turnover was Tk 1,200 crore,” he said.

Rahman dismissed any confusion about the present bullish trend. “The market is on the right track,” he said.

Rahman suggested the government increase the inflow of good shares to keep the trend up by balancing demand and supply of shares.

“The government does not require doing business in hospitality, aviation and other services sectors, rather it can get more return by offloading shares from such public-run organisations,” the DSE president observed.

DSE to introduce online trading

http://www.newagebd.com/2009/nov/04/busi.html#1

DSE to introduce online trading
Staff Correspondent

Dhaka Stock Exchange will introduce internet-based trading system within six months to expedite stock trading.

‘For a fast moving market, it is needed to introduce the system,’ DSE president Rakibur Rahman told reporters after a meeting with the US ambassador James F Moriarty at the bourse’s auditorium Tuesday.

‘We’ll try to introduce the internet-based trading system by six months,’ he said.

Internet-based or online trading system means buying and selling stocks by giving the order though internet, usually on a broker’s form. In this system, buy or sale confirmation is done by mail or e-mail.

The DSE president said the settlement period would also be reduced to one day from existing three days if commercial banks launch online money transaction from one bank to another by December in compliance of the central bank’s directive.

On Monday, Bangladesh Bank issued a circular that said from now onwards the subscribers would be able to pay utility bills online from their bank accounts and also transfer funds to other banks. It added that transactions between buyers and sellers can also take place online, enabling e-commerce facilities in the country.

Through the online trading system, anybody can observe the market situation on the internet and place buy and sale order through one’s respective broker.

Quoting the US ambassador the DSE chief said, ‘He appreciated the development of the Bangladesh stock market and called to enhance transparency and accountability in the market to protect the small investors’ interest.’

Stock index soars to new high

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Stock index soars to new high
Star Business Report

The benchmark index of the premier bourse crossed the 3,400-point mark for the first time yesterday, riding on banking stocks as most banks posted better-than-expected quarterly financial results.

The DSE General Index (DGEN) gained 20.89 points, or 0.61 percent, finishing the day at 3,412.92.

The listed banks were disclosing their financial statements for the third quarter to September 30, 2009 during the last few days.

“The banking sector gained the most today [yesterday] following good third quarter results,” said an analysis by Brac EPL, an investment bank.

Among the biggest gainers, Dutch-Bangla Bank advanced by 8.18 percent, while Uttara Bank by 10.40 percent and NCC Bank by 5.53 percent.

Prices of the banking stocks, the bellwether of the market, remained low for a long time on concern of negative impact on their earnings in the wake of global recession.

But the third quarter results led the sector to rally, said a Dhaka Stock Exchange member.

The broader DSE All Share Price Index increased 17.68 points, or 0.62 percent, to 2,853.71.

The Gainers and losers were similar in number as 116 went to the positive territory, while the same were in the red side. Three securities however remained unchanged.

A total of 3,34,24,897 shares and mutual fund units worth Tk 951.78 crore were traded on the Dhaka bourse.

Titas Gas topped the turnover leaders with 10,59,000 shares worth Tk 74.29 crore being traded.

Uttara Finance, that rose 10.85 percent, was the biggest gainer on the DSE, while Bangas was the top loser that declined 9.98 percent.

Chittagong stocks also posted rise yesterday. The CSE Selective Categories Index gained 35.6 points, or 0.48 percent, to 7,389.71. The CSE All Share Price Index increased 54.7 points, or 0.46 percent, to 11,730.4.

A total of 49,64,266 shares and mutual fund units worth Tk 94.27 crore changed hands on the Chittagong Stock Exchange. Of the traded issues, 71 advanced, 85 declined and two remained unchanged.

Saiham Textile Mills, which went up by 16.98 percent, was the largest gainer, while Mercantile Insurance that declined by 15.25 percent was the biggest loser.

AB Bank topped the turnover leaders with 75,125 shares worth Tk 7.05 crore being traded on the port city bourse.

Financial sector logs hefty profit

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Financial sector logs hefty profit
Sajjadur Rahman

Bangladesh’s financial sector has recorded impressive profit growth in the first three quarters of 2009, showing strong resilience against fallout from global recession.

The sector — both banks and non-banks — posted 30 percent growth in net profit in the January-September period, compared to the same period a year ago.

Sector people linked the growth to a booming capital market, growth in remittances and a revival of congenial investment climate in the third quarter.

“Institutions with operations in capital market have achieved substantial gains this year,” said Mafizuddin Sarker, managing director of LankaBangla Finance, a joint venture leasing and finance company.

LankaBangla Finance’s net profit grew nearly 45 percent to more than Tk 52 crore for the first three quarters, compared to the same period of 2008.

Pubali Bank’s net profit rose 25 percent to Tk 90 crore in the first three quarters from the same period a year earlier.

“Capital market operation has contributed substantially to growth,” said Helal Ahmed Chowdhury, managing director of the bank, a relatively a new entrant to the capital market operations.

Most banks out of the 48 banks and 29 non-bank financial institutions have achieved significant growth during the period, offsetting fears that the global economic slowdown would cost Bangladesh and its financial sector heavily.

These financial institutions are the prime source of funding for investment in industries and trade.

AB Bank, one of the largest private banks, has logged Tk 210 crore in net profit in the Jan-Sept period of 2009, up from Tk 181 crore in the same period a year ago.

Of the banks, Eastern, IFIC, First Security, Prime, Mutual Trust and Mercantile also grew by double-digit rates during the period. Islami Bank’s profit grew only 4 percent, which is negative for Premier Bank.

Eastern Bank’s net profit increased by 60 percent to Tk 115 crore in the first three quarters of the current year from the same period of last year, while it is Tk 62 crore for IFIC Bank, up from Tk 50 crore a year ago.

First Security Islami Bank earned Tk 21 crore in net profit, up from Tk 8 crore in the same period a year ago.

Net profit of the non-banks that include IDLC, Union Capital, Phoenix Finance and Investment, Uttara Finance and Prime Finance and Investment grew significantly in the period.

IDLC’s net profit increased by 55 percent to Tk 45 crore in the period. Prime Finance’s profit rose to Tk 41 crore from Tk 24 crore, Union Capital rose to Tk 11.24 crore from Tk 9 crore, Phoenix rose to Tk 14.36 crore from Tk 9.15 crore, Uttara Finance Tk 34.5 crore from Tk 23 crore.

“Banks and financial institutions have been optimising the still-untapped opportunities in the capital market,” said Anis A Khan, managing director of Mutual Trust Bank that has recorded 252 percent growth in net profit during the first three quarters of 2009.

Mutual Trust Bank’s net profit reached nearly Tk 37 crore this year from Tk 10.5 crore a year ago.

“Our capital market is still underserved compared to the total economy. There is ample scope to grow up,” Khan said.

sajjad@thedailystar.net

Bangladesh Bank introduces online payment system

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Banking enters new era
Bangladesh Bank introduces online payment system

Rejaul Karim Byron and Nafid Imran Ahmed

Hassles are about to be over. Shoppers will no longer have to go to market spending hours in traffic jams. One does not need to stand in long queues to pay utility bills. All are now possible on the internet.

Bangladesh Bank yesterday introduced online payment systems facilitating fund transfers and payment of utility bills on the net. The new move allows people to use local currency credit cards for online transactions within the country.

Although these services are being introduced on a smaller scale, it is seen as the first step toward a full-fledged online banking.

This move will certainly enhance the use of e-commerce and online banking services facilitating subscribers of all commercial banks in Bangladesh.

The central bank issued a circular to all commercial banks saying subscribers to internet banking will now be able to pay utility bills online from customers’ accounts to billing accounts.

“This will create a revolution in e-commerce and online banking,” said Bangladesh Bank Governor Dr Atiur Rahman.

Online fund transfer between two accounts under the same name in the same bank will also be possible.

The circular mentioned that e-commerce-based transaction between buyers and sellers can also be done through internet banking. Online transactions by credit card in local currency will also be possible.

“This is the first and the most significant step towards electronic transaction in the country,” Munir Hasan, consultant, Access to Information (A2I) project under the Prime Minister’s Office, told The Daily Star.

Vice Chairman of Association of Bankers Bangladesh Nurul Amin, also managing director of National Credit and Commerce Bank Ltd, said: “Banks need to be prepared for offering such services. Customisation and integration are necessary for this purpose.”

Security measures along with a legal framework need to be put in place to safeguard both customers and banks, he added.

These transactions will only be possible now within the accounts under the same bank offering online banking.

Online transaction between banks will be possible with the introduction of e-Payment Gateway, an e-commerce application service provider service that authorises payments for e-businesses and online retailers.

Bangladesh Bank had taken the initiative to implement the e-Payment Gateway back in 2008.

According to a report, the system should be ready for deployment within the next six to eight months and is expected to be operational at the beginning of the next financial year.

“We collect payment manually from 300-400 clients every day. The system consumes huge time and money. Now we are ready to start online payment collection on a pilot basis. We were waiting for this to happen for quite long,” said Fahim Mashroor, chief executive officer of Bdjobs.com.

Shoeb Ahmed, former general secretary of Bangladesh Association of Software and Information Services, also appreciated the initiative.

He said, “Banks are probably ready for this. But stakeholders and government bodies should be prepared for online banking, otherwise it might not be utilised properly.”

Shoeb said they proposed that the government establish a central payment gateway.

Physical credit and debit card payments are available across the country. Banks need to introduce Application Programme Interface (API) to implement the online credit card payment system. API ensures secure payment on the internet by providing both credit card and PIN numbers.

All banks have been advised to remain alert to the misuse of online payment system for money laundering. They will have to report to the financial intelligence unit on whether any irregularity or crime has been committed in violation of the anti-money laundering act.

Ctg entrepreneurs showing interest in stock market

http://www.thefinancialexpress-bd.com/2009/10/29/82839.html

Ctg entrepreneurs showing interest in stock market

Kayes M Sohel

from Chittagong

Reputed entrepreneurs of Chittagong are gradually looking at the stock market as an alternative source of fund mobilization for their new business set-ups and the on-going 3rd CSE Capital Market Fair is giving them the opportunity to gain the knowledge.

Experts see their interest on stock market as a sign of enrichment and depth of the country’s stock markets as the cheaper source of fund raising than banks.

“Stock-market is the cost-effective and tension-free means to finance new-business set-ups and expansion,” Abdus Salam, senior vice-president of Chittagong Chamber of Commerce and Industry (CCCI), told FE.

“Usually, entrepreneurs like me go to the banks and other financiers for taking credit at higher interest rate and after getting loans, they always remain in tension to repay the loan in time before going into production,” said Mr. Salam, also a reputed industrialist in Chittagong.

“If I, as an entrepreneur, raise funds from the stock market at low interest, then there is need for me to go to the bank,” he said.

The CCCI boss also said, “Initiatives have also been taken to encourage other entrepreneurs to list their industries with the stock exchanges.

He, however, said the rules and regulations should be industry-friendly so that the entrepreneurs can easily raise capital from the stock market.

Ziaul Haque Khondker, chairman of Securities and Exchange, inaugurating the Third CSE Capital Market Fair at the Chittagong Club auditorium previous day called upon the big Chittagong-based companies to list with the stock exchanges.

Although some big companies from the region such as S Alam Group and BSRM are listed, there are many others yet to be listed.

PHP, KDS, Mostafa Group and BSA are some of the big Chittagong giants that are not listed with the stock exchanges, although they often borrow from the banking sector or other financiers.

Mohammed Akther Parvez, director of PHP Group, said they are already in process to list some of their companies with the stock exchanges.

“PHP Float Glass Industries would be listed first,” he said, adding that they are also working to bring products such as mutual fund for the stock market.

Saiful Alam Masud, chairman of S Alam Group, said the SEC’s plea will encourage many Chittagong-based entrepreneurs to raise fund from the stock market. “They (entrepreneurs) will start thinking about the issue.”

“Listing of big industries will increase the market depth further. Not only that, both the entrepreneurs and investors will be benefited,” he said.

Meanwhile, the two-day capital market fair, organsied by Chittagong Stock Exchange, ended yesterday with huge response.

A total of 30 institutions, including CSE Brokerage firms, merchant banks, leasing companies, banks and other CSE listed companies with their products and services participated in the fair.