Stock fluctuations normal
"We don't manage portfolios and don't see who invests where but whenever the market falls, investors blame us," says BSEC chief
Prof Shibli Rubayat-Ul-Islam, chairman of the Bangladesh Securities and Exchange Commission (BSEC), has urged investors not to panic when the stock market index falls, reasoning that fluctuations are normal.
The problem is that investors become worried if they see that the index is dropping. If they start making purchases at that time, the index will also rise, he said.
Referring to investment practices of Warren Buffet, Prof Islam said the world-renowned stock market investor buys stocks when market falls and sells those when the market soars, and this was the right way to invest in a stock market.
"However, our investors behave just in the opposite manner," he said.
"We don't manage portfolios and don't see who invests where but whenever the market falls, investors blame us. When investors make money, they don't say anything," he added.
The BSEC has enhanced market monitoring, so there is no scope for a repeat of the scenario of 2010, he said. That year, the market index and turnover soared, crossing all previous records, before crashing.
Prof Islam's comments came at a seminar on the role of the capital market in the development of the small-and-medium enterprise (SME) sector organised by daily Banijjo Protidin at Economic Reporters' Forum.
"We always monitor the movements of listed companies and sometimes run special audits. The scenario of some companies scares us," he said.
Some company's funds have been siphoned off and some are really in trouble. "We are taking steps, what they deserve," he added.
To make the SME market of the stock exchanges vibrant, people who have investments of at least Tk 10 lakh should be allowed to trade there, said Sayadur Rahman, president of Bangladesh Merchant Bankers Association.
Investors with a minimum of Tk 50 lakh investment in the stock market are allowed to trade shares of companies on the SME platforms, according to the BSEC rules.
On the other hand, listed companies in the SME board should not be imposed the condition that they have to provide dividends in the first two years, he added.
SME Foundation Chairperson Prof Masudur Rahman, BSEC Executive Director Mohammad Rezaul Karim, DSE Managing Director Tarique Amin Bhuiyan and Capital Market Journalists Forum President Hasan Imam Rubel also spoke at the event.
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