DHAKA: The regulatory body of Bangladesh Securities and Exchange Commission has failed to speed up the transaction even after several initiatives in the capital market.
Everyday market transactions are decreasing. The average turnover of Tk one billion crore came down to two hundred crore taka.
According to people concerned, the capital market now suffers from extreme confidence and liquidity crises. They also said investors will incur severe losses if the market continues the losing trends.
Meanwhile, in the market analysis, the general index of the DSE was 5,821 points on January 31. In the last four and a half months, it has decreased by 5,196 points. That means, during this time the index fell 625 points.
On the other hand, the average turnover in the market was about thousand crore taka in January last year. At present, it has decreased by Tk 255 million (till May 15). If this trend continues, then the general investors will lose all their capitals.
General investors believe that it has been done due to placement and IPO trade. According to them, thousands of crores taka have left the market due to placements.
People concerned also believed that bringing the weak companies in the market with high premiums have had negative impact on the market.
A placement is the sale of securities to a small number of private investors that is exempt from registration with the Securities and Exchange Commission under Regulation D, as are fixed annuities. This exemption makes a placement a less expensive way for a company to raise capital compared with a public offering.
While talking to Banglanews, DSE director Minhaz Mannan Imon blamed liquidity crisis and lack of confidence for low trading in the market.
He said that confidence in the market now lies in the zero level. Investors are cheated in every IPO lottery. Investors have no confidence in balance sheets and IPOs which prompted the present state of the market.
Bangladesh Capital Market Investor Oikya Parishad General Secretary Abdur Razzak said that on the other hand, the confidence of investors in the market are not returning as institutional investors remained away from the market and thousands of crores of taka left the market through placements.
DSE Broker's Association (DBA) president Shakil Rizvi thinks that there is a liquidity and confidence crisis due to the placement of thousands of crores thaka left the market due to the placement.
Citing that the prevailing crisis will be reduced, Shakil Rizvi said, there will be incentive for the capital market in the upcoming budget. After the next budget, the market will be good and the confidence of investors will come back
Economist AB Ahmed told Banglanews that there is a liquidity and confidence crisis in the market. It is not enough to give incentive only to overcome the crisis, rather the government should be compelled to the listing of the multinational companies as well as the government organizations in the market.
Economists Abu Ahmed also advised investors to invest in good companies and pay attention to long-term investment to get benefit.
BDST: 1344 HRS, MAY 16, 2019
RS/SMS
