Four state-owned banks to offload shares

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Bangla Tribune Report
Published : 15:50, Feb 09, 2020 | Updated : 17:29, Feb 09, 2020

File photo shows Finance Minister AHM Mustafa Kamal.The government will offload shares of four state-owned commercial banks in an effort to boost the capital market, says Finance Minister AHM Mustafa Kamal.

Bangladesh Development Bank Ltd (BDBL), Agrani, Janata and Sonali banks are set to be listed with the stock exchange by September this year, he told the media on Sunday (Feb 9) after a high-level meeting at the finance ministry.

The government has formed a panel, which includes a representative from the banks. The Investment Corporation of Bangladesh (ICB) will coordinate with the panel during the process of going public.

The plan to prop up the share market also includes divesting 25 percent stake of already-listed Rupali Bank up from the existing 10 percent, according to Kamal.

Presently, more than 90 percent shares of the Rupali Bank Ltd are held by the government, 4.47 percent by institutes and only 5.34 percent by the public.
Kamal informed that the meeting decided to bring first the Bangladesh Development Bank Limited (BDBL) into the capital market which will be followed by the Agrani Bank Ltd, the Janata Bank Ltd and lastly the Sonali Bank Ltd.
Since, the Sonali Bank Ltd performs the treasury function, it could take some more time to bring it to the share market but rest of the banks would be listed with the capital market within September or October of this year, the finance minister said.
He said the main function of the government is to support or facilitate the share market when asked him what would be the impact of this latest decision on the capital market.
“The government has no hand over the behavior of the capital market or whether it will go up for fall down…But the general investors of the country will be benefitted. Seeing the public shares offloading, the foreign investors will be much more attracted to invest,” Kamal added.
In order to increase the exposure of the institutional investment in the market, he said the government, last week, asked seven energy sector state-owned enterprises to complete the valuation of their assets in two months for the divestment of their shares on the bourses.
Out of those seven companies, the Titas Gas Ltd and Power Grid are already listed with the bourses.
Turning to the macroeconomic situation of the country, the finance minister said, “Like always, we’ll claim that the economy of the country will not fare bad at the end of this year and all concerned stakeholders believe that we’ll attain our targeted 8.20pc GDP growth in the current fiscal year.”
He said there is no bad signal in the economy except one area which is now going negative and it would not be wise to evaluate the whole economy with just one area.
“In all considerations, I think that our position is good. Like I always said, I’ll say again that we’re concerned with one sector which is the capital market. Although capital market is the reflection of the economy, but we’ve long been noticing that our capital market is not aligned with our economy. There are some mismatches, especially with the low level of institutional investment,” he added.
The finance minister said since the government wants to move forward the economy in a sustained way, it is addressing the institutional barriers and problems in the life and non-life insurance companies, in the capital market as well as in public and private sector banks side by side amending their legal frameworks.

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