DSE to source funds locally, globally to alleviate investor panic
The association sought suggestions from journalists on necessary capital market reforms and ways to navigate the current challenges
Mominul Islam, chairman of the Dhaka Stock Exchange (DSE), said that the DSE will work to enhance liquidity management in the capital market in the short term by sourcing funds both locally and globally to alleviate investor panic.
He made these remarks at a discussion today (2 November) organised by the DSE Brokers Association of Bangladesh (DBA), titled "Current Context and Future Action Plan of the Bangladesh Capital Market".
The association sought suggestions from journalists on necessary capital market reforms and ways to navigate the current challenges.
DSE Chairman Mominul said that the capital market cannot be viewed in isolation, pointing to corruption, lack of accountability, inefficiency, and poor decision-making as its main obstacles.
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He said that many investors mistakenly expect to achieve quick wealth from the market, and this misconception has proven difficult to address. The focus on short-term gains has led even regulators to engage in unproductive competition.
He stressed that cultural change is essential, alongside policies to protect small investors.
Mominul suggested that the DSE should act as the primary market regulator, noting that the Bangladesh Securities and Exchange Commission (BSEC) often intervenes unnecessarily. He explained that rule violations should be addressed by the primary regulator, not the BSEC, as such involvement can undermine the BSEC's reputation.
To resolve the liquidity crisis, the DSE plans to source funds locally and globally, while also working on enhancing efficiency and transparency, improving legal and structural aspects, and addressing tax issues, he added.
DBA President Saiful Islam expressed disappointment with the interim government, pointing out that the capital market has faced significant challenges over the past 15 years.
He said that current policymakers continue to hold outdated, speculative views on the market, calling for government reforms to foster stability.
He urged DSE directors to review the Demutualisation Act of 2013 to increase the capital market's effectiveness.
Among the journalists, Ziaur Rahman, editor of Arthosuchak, described the current state of the stock market as deeply rooted in issues that cannot be solved easily. However, he believed that a path to recovery could be found through collective efforts.
Capital Market Journalists Forum President SM Golam Samdani Bhuiyan acknowledged that while there were expectations of positive changes from the new commission, it initially failed to manage the market effectively. Furthermore, its early measures led to increased panic within the market.
The Business Standard Special Correspondent Jebun Nesa Alo highlighted the financial statements of One Bank and Sonali Paper Company as examples for research, illustrating how a manipulated balance sheet can negatively impact investors. She also commented on the mutual fund industry and its trustees, pointing out that they have not been able to fulfil their roles effectively in supporting the capital market.
Prothom Alo's Business Editor Sujoy Mahajan suggested establishing a minimum Tk1 crore investor protection fund within companies and emphasised the need to elevate the social status of investors.
Senior Reporter Anwar Ibrahim from Samakal emphasised that the capital market primarily serves brokers and intermediaries, who can address its issues independently. He observed that problems began when banking institutions acquired brokerage houses, leading to high operational costs that were challenging to manage due to the small market size and limited profits. Additionally, brokers have established sub-brokers, incentivising them to continuously encourage the buying and selling of shares among investors.
Munir Hossain, a senior reporter at Jugantor, discussed the longstanding lack of confidence and coordination in the stock market, suggesting that greater alignment between the DBA and DSE could bolster investor confidence.
Senior Reporter Ahsan Habib from The Daily Star pointed out that most investors focus primarily on capital gains, which poses a major challenge for the country. He emphasised that brokerages and merchant banks should play a role in shifting investor perspectives.
Finally, Sushanta Sinha, chief business editor at 71 TV, commented that while regulatory bodies such as Bangladesh Bank, BSEC, DSE, and DBA are working toward positive changes, information gaps between them continue to hinder progress.
