Regulator to weigh the potential of OTC market companies
Regulator to weigh the potential of OTC market companies
The currency markets regulator has initiated a proceed to check out the business potential of the firms trading over-the-counter (OTC) within efforts to bring them back to the key board of the exchanges.
The Bangladesh Securities and Exchange Commission (BSEC) has instructed Dhaka and Chattogram stock exchanges to appoint special auditors to review the business enterprise potential of 21 companies that are functioning.
"You want to examine the better companies of the OTC market and bring them to the main board," said a top official of the BSEC, preferring anonymity.
"We are analysing their potential. Let's see how many companies we are able to find fit for the key board."
The OTC market provides an alternative to stock market listing for securities of issuers that either choose not to be listed on the DSE or usually do not to meet up the relevant listing requirements, based on the DSE website.
At the moment, 64 stocks trade on the OTC.
The regulator also ordered the bourses to submit an in-depth report on another 43 companies that are also listed with the OTC market.
The bourses will measure the financial reports of the firms along with their business performance, production capacity, land and other tangible assets.
Retail investors welcome the move.
These businesses have raised funds from the investors but pay nothing in exchange. Moreover, some don't talk to the shareholders, said one investor.
Among the OTC-based companies, the DSE cannot trace 11 companies.
Some investors say the commission could bring them under accountability as sponsors of a number of the traceless companies are doing other businesses in the united states.
Earlier, the regulator moved to examine the business enterprise potential of the junk stocks, find out the firms that have shut, have been incurring losses or failing to hold an annual general meeting regularly. The review is underway.
The decisions from the regulator came after the appointment of the new commission led by Prof Shibli Rubayat Ul Islam, which aim at bringing discipline in to the market and restoring the confidence of investors.
