The government will implement demutualisation or separation of management of bourses from their shareholders within its tenure to infuse dynamism into the stockmarket, said Finance Minister AMA Muhith yesterday.
'We will realise our goal of demutualising stock exchanges before our tenure ends. We must do it. Otherwise the stockmarket will never be dynamic,' insisted Muhith.
The minister made the pledge at the lunch of a book, Sombhaboner Orthonity by banker and economic analyst Mamun Rashid, who prefers the title of the book as 'Hopeconomics' in English.
Former finance adviser of caretaker government AB Mirza Azizul Islam spoke on the book launch chaired by North South University Vice Chancellor Hafiz GA Siddiqi.
The book that contains 16 articles is dedicated to all teenage and women freedom fighters, who, as Rashid says, turned the impossible into a reality through their courage during the Liberation War. The book was published by Anyaprokash.
Dwelling on the hope of a prosperous Bangladesh, 50-year old Rashid discussed issues ranging from macroeconomic management, money and capital market to 1/11 changeover, education and the emergence of the middle class in the $99 billion economy growing
by more than 5 percent a year.
The development potential of Bangladesh is receiving attention worldwide, but the success attainted by Bangladesh still remains below the vast potential of the country, observes Rashid in one of his essays.
'It is essential to have a new economic system to realise the full potential of the economy,' he says, suggesting that the neo-economic model, based on transparency and good governance, should start through the partnership of all stakeholders such as government, regulatory agencies and private sector.
Rashid however argues that attempts should be made to enable Bangladesh to thrive in the open-market economy.
He also shared his thoughts on the banking sector and stockmarket based on his 25-year experience as a banker.
The stockmarket which became overheated during the last two-three years, plunged last month, forcing the government to come up with stimulus measures to recoup investors' confidence.
Rashid prefers establishment of a national stock exchange in Bangladesh to bring discipline to the stockmarket. He is in favour of demutualisation of stock exchanges.
Muhith said demutualisation is necessary and is one of the objectives of the government. 'We have to do it and probably the pace will increase after the recent events,' he said.
The minister also said the banking sector's involvement in stocks will have to be reduced slowly so that banks can finance more on expansion of trade and commerce.
Former caretaker government adviser Mirza Azizul Islam backed the call for demutualisation of stock exchanges.
'Stock exchange authorities are the front-line soldiers to enforce regulations. Conflict of interest arises when the brokers exclusively serve as members of the board of directors of stock exchange and assume the role of primary regulators,' said Islam.
Muhith praised the writer's focus on the potential of the economy and the essay on emergence of middleclass, a driver of an internal market.
The minister said statistics on the middleclass are scarce but the number has been observed increasing.
'Some say it (middleclass) was 14 percent of total population 20-25 years ago. Now it is 28 percent. It is a good figure and it has helped create a domestic market,' said Muhith