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SAM

Published:
2018-10-08 17:06:46 BdST

Capital market is a tool to boost investment: Muhith


FT ONLINE

Finance Minister A M A Muhith has expressed the hope that the country's capital market would flourish in near future based on the foundation built over the last 25 years.

"I do not say that a strong capital market has been built during the last 25 years after inception of the securities regulator. But during the period we've built a foundation, and the market will be flourished soon on it."

He said many people became 'worried' following two market debacles. Such worry prompted the securities regulator to take various efforts to stabilise the capital market during the last eight years.

He said these while speaking as the chief guest at the inaugural ceremony of World Investors Week 2018 at Krishibid Institution Bangladesh in the capital on Sunday.

Mr Muhith also focused on more investment to expand the areas of products and services (to cater to the needs of consumers).

"The country's economy witnessed a remarkable progress during the last 10 years following investment growth."

He, however, said Bangladesh is lagging behind in the investment indicator compared to that of other countries including India.

"Our investment ratio should be higher, and the capital market can play a vital role to facilitate private investment," he opined.

"The government has increased public sector investment to a large extent during the last 10 years."

But private sector can play an important role in increasing investment, and the government also has some responsibilities in this regard.

He also said the next five years are important for the capital market and the economy as well, as different targets, including Sustainable Development Goals (SDGs), are likely to be achieved by the time.

Meanwhile, the chairman of Bangladesh Securities and Exchange Commission (BSEC) in his speech on the occasion has warned the capital market intermediaries of taking tough steps like 'scrapping' the book building method in the event of their failure to protect investors' interest.

"The existing book building method will either be reviewed or scrapped, if the investors' interest is not prioritised by the market intermediaries," said Professor M Khairul Hossain.

The BSEC chairman also said the eligible investors should quote appropriate price for shares of a company willing to go public using book building method after properly adjudging its fundamentals.

Emphasising increasing the investors' awareness, he said the market intermediaries, including the issue managers, should prioritise the investors' interest while working for a company willing go public.

"Sometimes, the companies want to go public with window-dressed balance-sheets. In that case, the investors' interest gets affected, if the market intermediaries do not play their due role," he added.

Md. Asadul Islam, Secretary of Financial Institutions Division, said protection of the investors' interest is prioritised across the world.

"The investors will be empowered, if they become aware of their investments. They will have to avoid the tendency of becoming rich within a short time."

He also focused on removing weakness of the market regulation system for the sake of protecting the investors' interest.

After the inaugural session of World Investors Week 2018, the securities regulator held a conference on investment education and investors' protection.

The panellists of the conference also highlighted raising the investors' awareness to reduce investment risks.

BSEC Executive Director Farhad Ahmed said, "The investors will have to take their investment decisions after analysing the companies' fundamental strength and previous records."

He said an investor's portfolio should be diversified with different securities for obtaining safe return from his capital market investment.

Managing Director of Chittagong Stock Exchange (CSE) M Shaifur Rahman Mazumdar said expansion of the capital market is not possible with retail investors' participation only.

"Institutional investors should play their due role, so that the capital market can keep pace with expansion of the country's economy," he opined.

BSEC Executive Director Mahbubul Alam presented the keynote paper at the conference. Managing Director of Central Depository Bangladesh Limited (CDBL) Shuvra Kanti Choudhury also spoke at the conference, among others.

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