Capital market has turned around as local and foreign investors remained active amid high hopes following the government’s measures to restore the ailing market to a healthy state.
Some positive economic indicators encouraged investors to hold position on large-cap securities.
Market analysts said the capital market regulator's strict stance on ensuring mandatory shareholding, exemplary punishment handed out to offender worked well to rebuild investors’ confidence in the market.
The securities regulator's latest stance on ensuring mandatory 2 percent shareholding by each director and 30 percent shareholding jointly had a positive impact on the stock prices, they said.
After taking over in May, the new Bangladesh Securities and Exchange Commission (BSEC) chairman Shibli Rubaiyat held meetings with top officials of the Ministry of Finance, Bangladesh Bank and the NBR. He talked to stock market-related parties as well, a senior official of the BSEC said.
The regulator took various initiatives to bring back investors and entrepreneurs into market, he added.
There is no alternative to revival of the stock market to accelerate the economy, he underscored.
As part of the move, the new chairman reopened the stock market, which had been closed due to the coronavirus pandemic, by contacting the top level of the government, he said.
During the rogue virus pandemic, the stock markets all over the world remained open, but it was closed only in Bangladesh, he mentioned.
The market reopened on May 31 after shutdown for more than two months, he said adding, commercial banks were urged to return to invest in the stock market to attract investors.
The stock market regulator further ordered the listed companies and their board of directors to comply with the directives regarding holding minimum 30 percent shares jointly by the directors, other than independent ones, within 60 working days from July 29, 2020.
A leading broker said the stock market regulator's assurance not to lift floor price restriction until the market gets stable, no major spike in Covid-19 new cases and gradual reopening of the economy attracted investors to buy shares.
He said the expansionary monetary policy declared by the central bank is expecting that the increased money flow would help revive the economy from the Covid-19 fallout.
BSEC chairman Prof Shibli Rubayat-Ul-Islam said, “There was some stagnation in the market due to Corona pandemic.”
Investors’ trust in the market has returned, he said adding, the turnover in the market is increasing day by day.
Shibli said, “Work had to be started amid the litany of problems. The biggest problem is the lack of investors’ confidence in the market.”
“I had to talk to everyone to know and understand how to regain confidence and what the problems are,” he added.
“We want to buoy up the confidence of investors as much as we have gained in the last two months”, he said adding, I really want to build this market as a capital market.
BSEC leader further said from now on no one will be able to cross the market by committing irregularities. If necessary, the bad guys will be kicked out of the market, he added.
“I will fully automate the stock market. Work has begun. It will be visible in the next two years. Automation will increase transparency and accountability in everyone's work and investors will have easy access to sufficient data to invest,” he mentioned.
The stock market will be easy for everyone, he added.
As the country's economy grows, the stock market will soon keep pace with it, he informed.
Eminent economist and market expert Prof Abu Ahmed told Bangladesh Post, “The market has gone down a lot and has risen a bit from there.”
Investors are seeing some hope, he said adding, the government should bring some good companies to build strong capital market.
However, DSEX, the key index of the Dhaka Stock Exchange, went up by 660 points to close at 4,060.44 on Tuesday after reopening the market on 31 May.
The market capitalisation of DSE rose to almostTk 3,557 billion on the day, fromTk 3,161 billion on 31 May.
