Wise up to stock market: SEC
The Securities and Exchange Commission yesterday urged merchant bankers and brokerage houses to organise regular awareness programmes for investors to help them make rational investment decisions.
At least one lakh new investors have entered the capital market in the last two years and most of them have no clear knowledge about the market and investment tools and techniques, said Faruq Ahmad Siddiqi, chairman of the SEC.
In most cases, the capital market regulator said, investors sometimes make decisions based on rumours instead of analysing company fundamentals.
“Such investor awareness programmes will help the investors to make knowledge-based investment decisions in lieu of rumour-based investment decisions,” Siddiqi said.
The entrance of new investors from across the country was due mainly to a steady growth in the capital market during the last couple of years, he said. About two years back, market capitalisation was below $ 4 billion and at present, it stands at around $14 billion, he said.
The SEC chief addressed the launching ceremony of 'Investors' Awareness Programme' co-organised by IDLC Finance Limited and IDLC Securities Limited in Dhaka.
Siddiqi said investors, especially amateurs, have to be well-informed before investing in securities. "They must know when an investment decision should be taken, when shares should be sold, how to analyse a company's financial statement, and figure out its price earnings ratio, net asset value and earnings per share," he said.
“The investors should be educated about the capital market first and then should make investment decisions,” Siddiqi stressed. “If investors make wise investments, they should be able to profit. Rumour-driven investments are too risky.”
IDLC Chairman Anwarul Huq and IDLC Chief Executive Officer and Managing Director Anis A Khan also spoke.
Professor Abu Ahmed of Dhaka University presented the keynote paper at the programme, while IDLC General Manager Arif Khan presented a paper on 'Capital Market Investment'. Former Dhaka Stock Exchange Chairman Imtiyaz Husain moderated the awareness programme.