Bourses should keep an eye out for market manipulation

The country's bourses should have monitoring in place against stock market manipulation considering all the wrongdoings that happen before their very eyes, according to Salman F Rahman, the prime minister's private industry and investment adviser.

"Tracing market manipulation is the first priority for stock exchanges all over the world, so why should we lag behind in this regard?" Rahman said.

This is the responsibility of the government, finance ministry, Bangladesh Securities and Exchange Commission (BSEC) and also the stock exchanges.

"So, they need to be strong," he added.

Rahman made these comments yesterday during a webinar styled "Towards Sustainable Development of Capital Market" jointly organised by the Capital Market Journalist Forum and Bangladesh Merchant Bankers Association (BMBA).

Many listed firms have stopped production and yet their stock prices continue to soar.

The people who purchase these stocks and thw way through which the share prices were increasing should be well documented by the bourses.

"But in Bangladesh, manipulation occurs in broad daylight so why are our bourses so inactive," said Rahman, adding that in many cases brokers were involved.

"We have to change our mindset from one that only blames the government if we want to see a developed stock market."

"Besides, investors need to be more careful about their spending," said Rahman, also a former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

Meanwhile, the BSEC is working hard to bring good companies to the stock market, according to BSEC Chairman Shibli Rubayat Ul Islam.

The BSEC analyses a company's past profits before approving its initial public offering (IPO) and the entire process has been reduced to be completed in about one or two months, Islam said.

"We want to see investors in the stock market, not day traders because stocks cannot rise every day but traders cannot accept any share fall," he added.

To this end, the BSEC has initiated a financial literacy programme so that investors can properly understand market behaviour.

The new commission's move to hasten the IPO approval process is laudable but an initiative should be taken to bring small and medium enterprises into the market, said Shams Mahmud, president of the Dhaka Chamber of Commerce and Industry.

In developed countries, small and medium enterprises grow large once they make their trading debuts.

"And we need to create the same cushion," he added.

FBCCI President Sheikh Fazle Fahim, CMJF President Hasan Imam Rubel and IDLC Investments Managing Director Md Moniruzzaman also spoke during the event.