DSE, top brokerages discuss measures to stabilise capital market

The Dhaka Stock Exchange (DSE) held a meeting with representatives of leading brokerage firms on Tuesday to discuss measures to ensure normal and stable trading in the country’s capital market.

The meeting, held at the DSE boardroom on September 15, brought together DSE Managing Director Nuzhat Anwar, senior officials of the bourse and representatives of leading brokerage firms.

Opening the meeting, Nuzhat Anwar said the main objective was to hear stakeholders’ views and practical experiences on the short-, medium- and long-term development of the capital market.

She said the DSE would carefully consider logical and constructive recommendations and, where necessary, place them before its board and the Bangladesh Securities and Exchange Commission (BSEC) for further action.

Anwar said preparations for launching the derivatives market were progressing. The DSE plans to complete the necessary software and technological preparations and commence operations within the stipulated timeframe.

She also said the DSE was working on issues concerning investors affected by five recent brokerage-related incidents.

DBA President Saiful Islam said the discussion focused mainly on two issues — a number of long-standing unresolved matters in the capital market and the market’s current difficult situation.

He said identifying the causes of the current problems and finding ways to address them were among the key objectives of the meeting.

“Identifying problems alone is not enough; we have to find practical ways to resolve them,” he said, urging stakeholders to present realistic solutions alongside the problems they identify.

Representatives of brokerage firms put forward various proposals on the current state of the market, stability, liquidity enhancement and restoring investor confidence.

They called for a review of long-pending issues and stressed the need for practical and effective measures to address them.

The participants proposed reviewing the technical and practical feasibility of introducing new trading strategies and products, as well as reopening the pre-opening session, which has remained suspended for a long time.

They also proposed reviewing the possibility of extending support and repayment periods under a special Bangladesh Bank scheme, considering its existing tenure and loan repayment schedule.

Another proposal was to introduce a members’ margin net-off facility to reduce the financial costs and liquidity-management pressure on brokerage firms.

The participants also stressed the need to make inspection and surveillance activities more regular, data-driven, risk-based and transparent.

They suggested taking action after system-based verification of information and giving greater importance to abnormal price movements and indications of actual irregularities rather than focusing solely on normal trading volumes.

The meeting also discussed expanding the capital market beyond its traditional equity-based structure by increasing the range of bonds and other financial instruments.

Participants called for a clearer regulatory framework defining the roles and responsibilities of dealers.

To attract foreign investment, they proposed identifying and removing policy and procedural barriers. They also stressed the importance of investor-focused seminars and dialogues, as well as greater direct engagement between the DSE and high-net-worth investors and genuine market participants.

The participants further called for initiatives to encourage leading companies to enter the capital market and for a review of the feasibility of introducing share buybacks in the long term.

At the closing of the meeting, Nuzhat Anwar said the DSE board had approved a plan to strengthen its IT and organisational capacity, which is now being implemented.

Despite some challenges, she said, the DSE was moving forward through coordination with all relevant stakeholders.

She said work was also underway to strengthen inspection and surveillance for better investor protection through staff training and the development of data-driven software.

The initiatives, she said, would help structure the inspection process and make data reconciliation easier.

A decision has also been taken to hold regular meetings involving the Central Depository Bangladesh Limited (CDBL), Central Counterparty Bangladesh Limited (CCBL) and IT teams under a BSEC initiative, she said.

The DSE is also working in coordination with relevant stakeholders on online account opening, simplifying services for retail investors and introducing T+1 settlement, among other issues.

Regarding the bourse’s new website, Anwar said its development was nearing completion and that it was planned to be launched at a press conference on September 22.

The existing website will remain operational for another two to three months to facilitate investors, she said, adding that necessary improvements would be made to the new platform based on users’ feedback.

The DSE managing director said the exchange would work with all stakeholders to make its operations more transparent, effective and accountable while contributing to the broader development of the country’s capital-market ecosystem.