Capital market will not be in bubble any more, says finance minister

Finance Minister Abul Maal Abdul Muhith has said there will be no more bubble in the stock market with the government adopting measures for its proper development.

He gave this assurance while receiving a dividend cheque from the Investment Corporation of Bangladesh (ICB) at his Secretariat office on Thursday.

The minister said: “We’ve taken several measures, including demutualisation of stock exchanges, to develop a true stock market.

“The capital market has developed in Bangladesh through different initiatives in last five years.”

He said: “I’ve no hesitation in saying that there was no (true) capital market in the country before. My personal opinion is that it was a speculative market.”

Muhith said the present state of the market needed to be protected.

He said: “Ups and downs are always there in the stock market. But any crash is bad for the economy.

“However, the chance of any more bubble in the market is almost over because of the amended laws and rules.

“However, at this juncture, I can’t say that the possibility is fully over. I will be able to say that several years later,” he said.

The minister said the ICB, which was constituted for the development of the capital market, would have to keep a watch on the market so that it ‘behaves well’.

“You have to keep in mind that the main objective of the capital market is to finance (businesses). Here banks are doing that. But it’s not their responsibility,” he said.

ICB Chairman Mojib Uddin Ahamed and Managing Director Md Fayekuzzaman handed over to finance minister a cheque of Tk 51.257 billion as dividend against government’s stake in the corporation for the 2013-14 financial year.

Ahamed said the ICB had now become a ‘strong organisation’ and was playing a role in the economic development.

“Its profit is growing every year. This year we’ve given the government an amount which is 60 million more than the previous year’s figure,” he said.

The main index of country’s prime bourse, Dhaka Stock Exchange, had reached 9,000 points and daily turnover had touched Tk 32 billion in 2010 before it crashed.

The index went down below 4,000 points following a three-year downward trend. Recently, it started to rise and closed Thursday’s trade at 4,544 points.