Business owners are showing no interest in raising capital from the stock market. Due to a severe market slump and persistent volatility, no company is coming forward to get listed. With no Initial Public Offerings (IPOs) in sight, there has been no fresh investment in the stock market.
Since August, 2024 in the past eight months, not a single IPO has been listed in the country's stock market. Moreover, the Bangladesh Securities and Exchange Commission (BSEC) has not received any IPO applications for listing. In this situation, issue managers and entrepreneurs have lost confidence in the BSEC. A significant gap has emerged between market demand and supply.
Industry insiders say that under the current circumstances, no one feels convincing enough to invest in the market. The prolonged irregularities in IPOs have contributed to this decline in trust. Additionally, the present commission has not taken adequate measures to rebuild confidence.
According to BSEC sources, a new commission was formed after August last year, with Khondker Rashed Maksud appointed as chairman. After assuming office, he undertook several steps to restructure the regulatory body and reform the stock market. However, no visible improvement was seen in the stock market. During this time, general investors took to the streets, protesting for the restoration of stability in the market. No new company’s IPO has been approved, and instead, an IPO previously approved by the former commission was cancelled.
The current commission has conducted several meetings with major multinational companies about IPOs and investments, but these discussions have not led to any tangible results. There were also discussions about listing some profitable state-owned companies through IPOs, but no advancements have been made.
Up to August 2024, four companies — NRB Bank, Best Holdings, Asiatic Laboratories, and Techno Drugs — collectively raised Tk 645 crore from the stock market through IPOs. In earlier years, the figures were as follows: in 2023, four companies raised Tk 202 crore; in 2022, six companies raised Tk 626 crore 26 lakh 9 thousand; in 2021, fifteen companies raised Tk 1,858 crore 44 lakh 4 thousand; and in 2020, eight companies raised Tk 985 crore 87 lakh 23 thousand through IPOs.
Investment Corporation of Bangladesh (ICB) Chairman and market analyst Professor Abu Ahmed told Bangladesh Pratidin, “In the past, there wasn’t enough effort from the higher authorities to list good companies. There’s no incentive involved, so why would good companies come? Work is now being done on this issue. A task force has been formed to look into it. Even if not monthly, we need at least four to five quality IPOs every year. Otherwise, no one will be interested in the stock market.”
Saiful Islam, President of the DSE Brokers Association of Bangladesh (DBA), stated that the regulatory authority has lost its effectiveness, creating a sense of fear and uncertainty.
He noted that potential capital-raisers are also losing hope, leaving the stock market without any IPO activity.
According to him, a market without IPOs cannot be considered a functional one, as IPOs are vital and irreplaceable.
He added that the current IPO process is not investor-friendly, and urged the regulator to identify the existing problems and address them promptly.
(Translated by Afia Nanjiba Ibnat)
Bd-pratidin English
