Economic Reporter :
The securities regulator has advised the country’s premier bourse to form an expert panel to scrutinize the upcoming initial public offerings (IPO) prospectus properly.
The Bangladesh Securities and Exchange Commission (BSEC) chairman M Khairul Hossain advised the board of directors of the DSE to form the expert panel to assess the IPO prospectus of companies seeking to float IPOs, said a DSE statement. The securities regulator also assured that the commission will give approval to the IPO of a company if the Dhaka Stock Exchange (DSE) expert panel would be satisfied with the company’s financial statements.
The decision was taken at an emergency meeting held at the BSEC head office in Dhaka on Thursday to ensure listing of quality IPOs in the stock market. The representatives from DSE and DSE Brokers’ Association (DBA) were present, among others.
The BSEC came up with the decision after huge criticisms from different quarters that the BSEC approved weak companies IPO ignoring DSE’s reservations about the companies’ IPOs.
In the past eight years, around 85 IPOs, mostly low profile companies were approved which failed to enhance the depth of the market. It was also alleged that a good number of low profile firms resorting to malpractices often showed higher profitability in their financial statements while applying for IPO approvals to the BSEC during the past eight years.
A DSE director informed the BSEC that IPO issue is limited within a few issue managers and merchant bankers although more than 50 merchant banks are operating in the country’s capital market.
The commission replied that they will take action or cancel license of those merchant banks which failed to bring new issues in the market over the years.
The DSE’s board of directors also expressed deep concerns over the current bearish capital market situation.
DSE director Minhaz Mannan Emon said the meeting with the regulator was fruitful and if the initiatives made at the meeting could be implemented, the confidence of the investors would be restored.
Emon said investors expressed disappointment over the audited financial statements of companies that floated IPOs as the information given in the IPO prospectus had been proved incorrect in many cases.
The securities regulator has advised the country’s premier bourse to form an expert panel to scrutinize the upcoming initial public offerings (IPO) prospectus properly.
The Bangladesh Securities and Exchange Commission (BSEC) chairman M Khairul Hossain advised the board of directors of the DSE to form the expert panel to assess the IPO prospectus of companies seeking to float IPOs, said a DSE statement. The securities regulator also assured that the commission will give approval to the IPO of a company if the Dhaka Stock Exchange (DSE) expert panel would be satisfied with the company’s financial statements.
The decision was taken at an emergency meeting held at the BSEC head office in Dhaka on Thursday to ensure listing of quality IPOs in the stock market. The representatives from DSE and DSE Brokers’ Association (DBA) were present, among others.
The BSEC came up with the decision after huge criticisms from different quarters that the BSEC approved weak companies IPO ignoring DSE’s reservations about the companies’ IPOs.
In the past eight years, around 85 IPOs, mostly low profile companies were approved which failed to enhance the depth of the market. It was also alleged that a good number of low profile firms resorting to malpractices often showed higher profitability in their financial statements while applying for IPO approvals to the BSEC during the past eight years.
A DSE director informed the BSEC that IPO issue is limited within a few issue managers and merchant bankers although more than 50 merchant banks are operating in the country’s capital market.
The commission replied that they will take action or cancel license of those merchant banks which failed to bring new issues in the market over the years.
The DSE’s board of directors also expressed deep concerns over the current bearish capital market situation.
DSE director Minhaz Mannan Emon said the meeting with the regulator was fruitful and if the initiatives made at the meeting could be implemented, the confidence of the investors would be restored.
Emon said investors expressed disappointment over the audited financial statements of companies that floated IPOs as the information given in the IPO prospectus had been proved incorrect in many cases.
