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Monday, July 28, 2014

Monday, June 9, 2008
Business

Foreign firms reluctant to list due to lack of incentives

Ficci meet told

Multinational companies are unwilling to be listed on the stock exchange, as there are no proper incentives for doing so, said the president of Foreign Investors' Chamber of Commerce and Industry (Ficci).

“Good companies may not be encouraged to enter the market until they get the right type of incentives for their listing,” said Waliur Rahman Bhuiyan speaking at the monthly luncheon meeting of the chamber in Dhaka yesterday.

He said although Ficci has more than 150 members, only a very few are listed on the country's stock market.

He also said after 1996's bubble and bust, the entrepreneurs have lost their confidence to raise capital from the stock market or to list their companies.

Securities and Exchange Commission (SEC) Chairman Faruq Ahmad Siddiqi, who was a guest speaker at the meeting, said the market is now more mature with numerous changes in rules and regulations, introduction of electronic trading system and strict monitoring and vigilance.

The present overpriced market also shows that the investors have regained their confidence, he said, adding that one of the main problems in the market is now the huge mismatch between the demand and supply.

The market needs new issues, he said urging the multinational companies to list their companies on the stock exchanges, which is a cheaper alternative source of raising fresh working capital.

He said the existing pricing mechanism or the lack of proper IPO (initial public offering) pricing is one of the reasons the multinational companies do not come into the stock market.

“But, if the multinational companies seek high premium in line with their valuation, which Berger Paints Ltd. did, the SEC will off course consider the premium,” he said.

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