Govt to revamp capital market

In the wake of continuous falling, the government is going take effective measures to revive the capital market in order to build up confidence among the investors. In this regard, the Finance Minister AHM Mustafa Kamal will hold a meeting with stakeholders of the market at Bangladesh Securities and Exchange Commission (BSEC) office on Monday (16 September), paving the way for revival of stocks.

Earlier, the government on budget proposal in fiscal year 2019-20 has announced many steps forward to effectively stabilise the capital market in the greater interest of general investors, which was suggested by the regulatory body and Bangladesh Bank, but it failed to attract the investors in the market.

The top Leaders of Dhaka Stock Exchange, Chittagong Stock Exchange, DSE Brokers Association (DBA) and Bangladesh Merchant Bankers Association (BMBA), ICB Managing Director, Top Broker houses and others will be present at the meeting. In addition, representatives of several regulatory bodies, including Bangladesh Bank and Insurance Development and Regulation Authority (IDRA), may also be present there.

However, the capital market saw bearish trend continued for several months, witnessing the losing streak for the last third straight week, as worried investors continued their selling spree to ward off further losses. DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by around 1016 points or 17 percent to close at 4934 on Thursday since 24 January 2019.

On the other hand, the DS30 index, comprising blue chips, declined by 312 points or 15 percent to finish at 1,737 during the time and the DSE Shariah Index decreased by 164.24 points or 12.43 percent to close at Tk 1,156 on the time. The market capitalisation of the DSE also fell almost 12 percent to Tk 3,694 billion on Thursday, from Tk 4,199.88 billion in 24 January 2019.

On the other hand, the port city bourse, the Chittagong Stock Exchange (CSE) has also seen a negative trend since January 24, 2019 with its selective category index (CSCX) losing nearly 1,941 points to close at 9,095 points on Thursday. On the other hand, All Share Price Index of CSE was lower by almost 3283.69 points during the time to close at 14,982.13 points on Thursday.

Market analysts said investors felt confidence crisis in the market as the most of companies of the stocks cannot perform well as well as non-performing loans continued to haunt the investor sentiment. They said, the investors usually buy the share without any investigation, which push investors in risky position in the market.

Hence, investors should gather financial literacy before investing in the market, they added. Eminent economist and market expert Prof Abu Ahmed told Bangladesh Post, the share market is witnessing a continuous fall as most of the companies have failed to satisfy the investors with their earnings and dividends.

As a result, most of the investors are selling their shares to flee the market, he said. “The government should immediately prepare the ground quite well to bring in some good companies, in order to undertake a drive to develop a long-term financing capital market”, Ahmed added. The eminent economist said, the government should encourage good companies, including local as well as multinational companies, to offer IPOs.