(Updates with market close in fifth paragraph.)
Nov. 23 (Bloomberg) -- Bangladesh’s market regulator has formed a panel to find ways to compensate investors who’ve lost money in the stock market as the nation’s equities head for their worst annual decline in 14 years.
Local individual investors, including those who borrowed money to buy shares and made losses, may benefit from the compensation package, Securities and Exchange Commission Chairman M. Khairul Hossain told reporters in Dhaka today. The six-member panel will submit its report to the Ministry of Finance in two months, he said.
The government also abolished a 10 percent tax on capital gains from stock-market investments for overseas investors and non-resident Bangladeshis, Hossain said.
The tax break “will increase the flow of foreign funds into Bangladesh stocks,” he said.
The Dhaka Stock Exchange’s benchmark General Index plunged 4 percent to 5,372.66 at close, before the announcement of the panel was made. The gauge, which climbed 83 percent in 2010 and 62 percent in 2009, has tumbled 35 percent this year, headed for its worst annual drop since 1997.
Today’s announcement comes after the regulator said last week that it will take measures to stabilize the stock market, following an emergency meeting between Prime Minister Sheikh Hasina and SEC officials.
Investor protests earlier this year after the gauge’s worst single-day loss in five years forced authorities to close the bourse on Jan. 10. The government will offer tax incentives on investments in stocks and waive levies on income from mutual funds, Hossain said Oct. 17.
Bangladesh, where more than half of the 166 million people don’t have access to electricity, aims to boost economic growth to 8 percent within three years, from 5.8 percent in 2010, central bank Governor Atiur Rahman said in April.
--Editors: Abhay Singh, Suresh Seshadri
To contact the reporter on this story: Arun Devnath in Dhaka at firstname.lastname@example.org; Shikhar Balwani in Mumbai at email@example.com
To contact the editor responsible for this story: Darren Boey at firstname.lastname@example.org