Stabilising the stock market
In recent months, Bangladesh stock market nosedived to the lowest in years. Most of the companies did not provide basic financial data of their companies to the website of SEC, Dhaka Stock Exchange and Chittagong Stock Exchange. I have a few suggestions for stabilising the stock market:
1. Investment from NRBs: Foreign investors should be encouraged to invest if SEC wants to stabilise the stock market. In order to do that there should be around 20% quota for the NRBs.
2. Accountability statement: Each company needs to give next three years' future forecasting of the products, services and earnings. The companies must provide the information if they want to be enlisted in the SEC and DSE sites. If a company does not provide required data within a month to the SEC, the company's name should be de-listed from the SEC.
3. Actual valuation: The valuation of stock of each company should be re-evaluated and restated within six months to make sure that stock price of each company is fair, justified, and reasonable.
4. Limit the day trading: I think the govt. needs to think of banning the day trading altogether.
5. Investment from institutions: SEC, other business organisations and the govt. need to develop policies and an environment for the institutional investors. They can play a major role in stabilising the market.
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