Rising from the Calamity
Often we, the Bangladeshis, are termed as a “Hujuge Jaati” because of our tendency to start hopping once learning about a new opportunity. We pay so much concentration towards making moves to reap the benefits of the chance that we do not notice when our interest becomes our greed which eventually makes our every efforts fail. This is just the case which has been happening with our capital market since December 19.
For the last two years, the stock market has gained too much popularity mostly because of the continually rising trend. People took stock trading as an excellent way of fast-earning and the brokerage houses, in fact, faced a flood of potential investors wishing to open new BO accounts. Hence, the most primary cause behind the existing stock market abnormality could be attributed to the increasing number of investors most of whom are not conversant (even partially!) with the capital market activities. As these people are unaware of the long-term functioning of the market, they often make unscientific deals to gain short-term profits. According to Mr. Mohammad Nayeem Abdullah, lecturer at the School of Business in Independent University, Bangladesh (IUB), SEC must introduce some training facilities for the potential investors so as to provide them with the needed basic knowledge which will not only help them to smoothly facilitate their transactions but also will contribute in keeping the market in an “investor-friendly” position.
Again, stressing the importance of strong monitoring by SEC, one investor at CSE (preferring anonymity) said, “SEC should strengthen its monitoring function. I wish a strong Vigilance Software be introduced in future to identify the causes of the potential stock market irregularities.” “Also, there should be some organization like SIPC (Securities Investor Protection Corporation in USA) for providing backups to the investors in case of stock market crashes.” he added.
Another solution to cover-up the current market condition could be by the voluntary participation of institutional investors who could effectively drag the bazaar upward by buying shares from the small investors at higher prices. This act would take the misfortune of the mass up-to some tolerance level while causing very insignificant losses to the big investors.
In addition, to prevent future crashes, those shares should be introduced at a larger extent which provide the least scope for manipulation by the influential actors. Shares of public projects carried out by the government would be the best option for this purpose.
Finally, emphasizing on examining the activities of the banks, an official from a brokerage firm (wishing to be unnamed) said, “The government must check why the banks are in so much liquidity crisis in the beginning of the year as no major projects could be seen where the money is being needed.”
--- Tanzina Ahmed Choudhury ---