Ahmed Shawki
The government on Sunday asked four state-run banks and the Investment Corporation of Bangladesh again to purchase shares with the funds from their own capital to stabilise the volatile stock market.
Experts and general investors, however, observed that the latest directive of the government might not yield any positive result as a similar move of the government two weeks back had failed.
‘I don’t think any financial organisation will invest money from their own funds in a falling market,’ said an expert.
The Dhaka Stock Exchange in a post on its web site on Sunday said that the government ordered Sonali, Janata, Agrani and Rupali banks and ICB to buy shares from the two bourses in the country.
The government earlier issued similar order to state-run banks and allocated a Tk 600-crore fund to ICB in three instalments for the same purpose.
A senior official of ICB on Sunday told New Age that they were almost out of funds allocated by the government as they had already invested more than 90 per cent of the total allocation and would have to bear a severe pressure to meet the order yet again.
‘We have already finished the first two instalments and only 25 per cent of the second instalment remained in our hand,’ he said.
The state-run banks are also in a tight spot with their investment in the stock market as the prices of the stocks are going down continually, he said.
The market experts questioned the practicability of such directive like asking financial institutions to invest in the market. They considered such directives futile and useless as they claimed the amount demanded to stabilise the market are hardly bearable by any institution.
Salahuddin Ahmed Khan, a former chief executive officer of DSE, said, ‘The amount of investment needed to stabilise the market can only be met if the government invests itself,’
‘The institutions are also suffering from credit crunch. As they also run with a commercially viable motive, pressuring them would not change the faltering scenario,’ he explained.
The general investors seem sceptic and aggravated following the announcement of the directive as they think such declaration ineffective.
The investors on Sunday blasted the government for its failure to stabilise the stock market and also questioned its sincerity in the issue.
Many retail investors claimed that the government did not have any genuine intention to stabilise the market and it seemed that the government enjoyed the sufferings of the general investors.
Selim, an investor standing in front of the DSE building said, ‘When the government makes such announcement, we believe it and count on it. But they take the advantage of our trust on its decision.’
‘The government better not test our patience any more,’ he warned.
The general index of the DSE collapsed by 337.58 points, or 5.81 per cent, to close at its 10-month low at 5,463.35 points on Sunday.
The DSE index had also suffered a loss of 125.41 points, or 2.12 per cent, to close at 5,800.94 points in the past week after the government announced measures to stabilise the market.
Read the original story on the daily New Age
