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Thursday, August 10, 2006

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HEADLINE
 
CDBL chief demands incentives for manufacturing cos to float IPOs
FE Report
8/10/2006
 

          Chairman of Central Depository Bangladesh Ltd (CDBL) Samson H Chowdhury demanded Wednesday of the government for framing stable fiscal and monetary policies as well as incentives to persuade entrepreneurs to go public.
"The government's fiscal and monetary policies seem to be the main causes for higher risk for profitability and the entrepreneurs suffer from uncertainty in their investment decisions including going public because of the current practice of too frequent changes at every budget occasions," Chowdhury, the country's leading entrepreneur said while addressing the launching ceremony of CDBL's global 'internet securities balance enquiry and portfolio valuation service' in the city.
The CDBL chairman, also the president of the Bangladesh Association of Publicly Listed Companies (BAPLC) demanded of the government to waive all import duties and taxes on machinery for manufacturing sector, continuation of tax-holiday for minimum seven years until the per capita gross domestic product (GDP) reaches at $5,000, fixation of corporate tax at 10 per cent for next 20 years and waiver of dividend income from double taxation to encourage the manufacturing companies to float initial public offerings (IPOs).
"The reasons for very poor response by the manufacturing companies to float primary shares in the stock market need to be assessed and addressed properly," Chowdhury, chairman of the Square Group said.
He said apart from the government's policies, the rigid regulations of the Securities and Exchange Commission (SEC) are also responsible for higher risk for profitability.
SEC chairman Faruq Ahmad Siddiqi, chairman of Sonali Bank board of directors Mirza Azizul Islam, Dhaka Stock Exchange (DSE) president Abdullah Bokhari, senior vice president Ahmad Rashid Lali and CDBL chief executive officer MH Samad spoke on the occasion.
International Chamber of Commerce-Bangladesh (ICC,B) president Mahbubur Rahman, former chairman of DSE Imtiyaz Husain and dignitaries of corporate sector were present on the occasion.
The other demands placed by the president of BAPLC are loan for all manufacturing companies under a reduced rate not exceeding 10 per cent, revision of IPO/rights issue regulations as per suggested by the BAPLC and the Metropolitan Chamber of Commerce and Industry (MCCI) in the past, allowing the payment of specie dividend by listed companies to increase supply of securities and annulment of section 2CC of the Securities and Exchange Ordinance, 1969.
The section 2 CC has enabled the SEC to use 'omnibus power' threatening the companies listed on the stock exchanges, he said.
The BAPLC president further said that the IPO conditionalities, among others, requiring proportionate directorship of institutions and individual shareholders and the provision of independent directorship on the board of a listed company are discouraging the majority sponsors of the corporate sector to go public.
"The nascent stage of the corporate sector development and management should not be ignored in such way," he regretted.
The SEC chairman, in his speech, said he will consider the demands and said the finance ministry is the sole authority to implement the suggestions for the welfare of the stock market.
Faruq Ahmad said the latest CDBL service will bring immense benefit to the thousands of investors as they will be able to access their CDS accounts through the internet.
The beneficiary owner (BO) account-holders will get the service for a nominal charge of Tk 200 per annum.
The SEC chairman formally inaugurated the CDBL service through pressing a computer button.

 

 
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