Finance Minister AHM Mustafa Kamal yesterday urged stock market investors to buy stocks after doing due diligence.
“Don't invest on the basis of faith only. You [investors] have to analyse the potential of a company before making an investment. Don't pay heed to rumours.”
His comments came at the opening ceremony of 'Investors and Entrepreneurs Conference Dhaka', organised by the Bangladesh Securities and Exchange Commission (BSEC) at the capital's Bangabandhu International Conference Centre.
The commission will organise another daylong conference as this in the port city tomorrow.
The minister advised investors to acquire financial knowledge first and not to come to the market to make gains within a short time.
“This is not a fish market where you will go and buy a fish. It is also not a market where the price of a share would double or triple within a week.”
About the current downtrend of the stock market, the minister said: “I want to see how low the index can go. It's a challenge for me.”
The government is taking steps to expand the contribution of the stock market to the GDP as a strong capital market is vital for ensuring sustainable growth of a nation.
The stock market did not develop at the pace at which the economy did, Kamal added.
Financial literacy is necessary to protect an investment as it will tell a person how to invest, where to invest and where not to, said M Khairul Hossain, chairman of the BSEC.
“We have to solve the problems related to taxes for making investments on the bond market for the sake of the stock market.” The problems can be solved with the assistance of the finance minister, he said.
Md Ashadul Islam, secretary of the banking division, and Helal Uddin Nizami, Swapan Kumar Bala and Khondoker Kamaluzzaman, members of the BSEC, were also present.
At the conference, Farhad Ahmed, executive director of the BSEC, chaired a seminar, where Md Mahbubul Alam, another executive director, gave a presentation.
Some companies have long been declaring stock dividends that have weakened their financial bases and ultimately brought down their earnings per share, said Shakil Rizvi, president of the DSE Brokers' Association.
“Such companies will fail miserably if they cannot earn higher profits to continue with the practice of providing stock dividends.”
Every investor of a company will have to be cautious and question where and how the money that came from stock dividend is being used, he said.
“Every company should be accountable for the stock dividends they are announcing.”