Merchant bankers yesterday sought a quota reserved for them in every initial public offering (IPO).
They said it would help them strengthen themselves as active market intermediaries.
The bankers made the appeal at a discussion with the Dhaka Stock Exchange authorities in the bourse.
People present in the meeting quoted merchant bankers: “We are considered to be institutional investors. But, we do not get any incentives. If we get a reserved quota in the IPO, like other asset management companies or mutual funds, it will encourage us to act as real market intermediaries.”
Presently, a 10 percent quota is allocated for mutual funds and non-resident Bangladeshis in every IPO.
There are 29 firms with merchant banking licences from the Securities and Exchange Commission, of which only eight to ten are active in operations.
The DSE and the merchant bankers in the meeting also put forward some recommendations to the authorities concerned.
The recommendations include increasing the ceiling of the investment allowance to Tk 10 lakh, from the existing Tk 3 lakh, allowing the investment of undisclosed money in the capital market without any fine, avoiding double taxation, and refinancing schemes and arranging loans for merchant banks at concession rates to increase their liquidity.
They also recommended making licensing conditions for big and upcoming companies, such as telecom and energy, to be listed on the stock market within a certain period, listing Jamuna Bridge on the market and raising money for the construction of the Padma Bridge from the market.
“We will submit the recommendations to the authorities like SEC, National Board of Revenue, Bangladesh Bank and finance and law ministries and urge them to implement the proposals,” DSE President Rakibur Rahman told journalists after the meeting.
“These suggestions were made to further develop the capital market,” he added.
by- Sarwar A Chowdhury
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