Commodity stock exchange to boost capital market turnover

Mohammad Tarequzzaman

Chittagong Stock Exchange (CSE) is putting utmost effort to boost its turnover as the present turnover of CSE is inadequate.

The authorities under the current CSE acting Managing Director Md. Ghulam Faruque is optimistic about the enhancement of the turnover very soon. In this connection, the Managing Director shared his upcoming plan with the Daily Tribunal as part of the turnover-boosting mechanism. The conversation with the correspondent, however, is disclosed below for readers’ interest.

The Daily Tribunal: What is the benefit of the capital market by introducing a commodity stock exchange and what about the progress of the commodity stock exchange?

MD. Ghulam Faruqe: Commodity Stock Exchange is very important all over the world because most of the developed countries are applying the traditional capital market product in their respective economies. Commodity exchange trading is doing a skyrocketing turnover business overseas except in Bangladesh. But CSE undertook an effective initiative to start trading on commodity stock exchanges. Recently, we submitted a draft proposal about the commodity stock exchange implementation to the Bangladesh Securities and Exchange Commission (BSEC). After getting the approval from BSEC, we will start trading on the Commodity Stock Exchange which would boost the existing turnover of the country’s capital market. If we implement this effective financial instrument, it will improve the overall capital market situation and the economy.

We have almost completed our official procedure in this regard and I am hopeful that this stock exchange trade will start by the end of this year or at an early stage of the upcoming year.

The Daily Tribunal: Would you mind expressing the limitation of CSE to fulfill its mission and vision?

MD. Ghulam Faruqe: Actually, CSE introduced a netting system to attain higher turnover and we felt comfortable with this system. The CSE turnover witnessed remarkable growth in applying the netting system. Already, this system is prevailing in many countries, but unfortunately, this effective trading was closed for a lack of sufficient digital platforms in our country.

As a result, our turnover declined. If we can again start this system, the cost of Central Depository Bangladesh Limited (CDBL) will decrease. Commenting on the challenges, he mentioned that the authority still did not have a netting system, derivative and etc.

Such limitations are an impediment to fulfilling our mission and vision. If we get a netting system and other policy support from the BSEC, it is possible to increase our turnover.

The Daily Tribunal: What is your assessment of the future capital market?

MD. Ghulam Faruqe: Within 1/2 years our capital market will be more vibrant and sustainable for the implementation of Central CounterParty Bangladesh Ltd, Commodities derivatives, Equity Derivatives, Exchange Traded Fund, etc.

The Daily Tribunal: The Bank and Insurance sector are being forced to enter the country’s capital market after a certain time according to the rules of BSEC. Do you think that it is rational?

MD. Ghulam Faruqe: It is my personal opinion that the highest impact-oriented sectors of the economy, namely the banking and insurance sectors should enter into the capital market. Currently, most financial institutions are not maintaining good governance and corporate governance issues accordingly. If they enter the capital market, it will improve their good governance situation.

And the second thing is that the investors will make a decision to invest their hard-earned money in any company.

Most investors are illiterate about capital market products, and for that, they are failing to understand the potential of any company.

The Daily Tribunal: What is your desire to see the capital market in the future?

MD. Ghulam Faruqe: I am performing my responsibility as an acting Managing Director of CSE. I want to witness the skyrocketing success of CSE to maintain the steady growth of the country.