Stock market can't keep pace with economic growth

The stock market has failed to keep pace with the country's robust economic growth because of the reluctance of the conglomerates to get listed and give the general people the opportunity to invest in good companies, analysts said yesterday.

Bangladesh's gross domestic product is growing at over 7 percent every year but the growth of market capitalisation is not on a par with it, they said.

The Central Depository of Bangladesh Limited (CDBL) and the University of Liberal Arts (ULAB) organised the event on investors' education and protection, on ULAB's Jigatola campus.

“The growth of Bangladesh's economy is praised in international forums but stock market does not match the high growth rate,” said Md Helal Uddin Nizami, commissioner of the Bangladesh Securities and Exchange Commission (BSEC).

He said the stock market experienced many reforms as well in the last few years but big conglomerates were yet to come forward. Many big conglomerates do not want to share ownership of the entities with the public and abide by rules and regulations of the securities law, he said. The BSEC is trying to increase institutional investors' base in the market, said Nizami, also a professor of the University of Chittagong.

The risk was higher, as the base of retail investors was much higher than institutional investors, he said.

“When there is a boom in the stock market, general investors come over to invest. But when it stays in its lowest point, they do not come. But they should come when it stays at its lowest point as it would be lucrative for them.”

“Investors should gain proper knowledge about the stock market before pouring their money into it,” said AK Abdul Momen, director of the CDBL. Professor Imran Rahman, dean of ULAB School of Business, gave a presentation while Khondoker Kamaluzzaman, commissioner of the BSEC, and Shuvra Kanti Choudhury, managing director of the CDBL, were present.