Shakil Rizvi, Director of Dhaka Stock Exchange (DSE), the main capital market of the country, said that there is no problem in the stock market. He said, we, the investors, have stepped into the trap of fraud and bought shares worth 10 taka’s for 100 taka. Now when that share has come to 50 taka, then we have demanded the floor price. She shares and can’t go down now. Now those who understand that the price of that share is not supposed to be more than 10 taka, will never buy that share – this is normal. But it is also true about markets, as investors along with regulators expected, if not for the global crisis including the Russia-Ukraine war, the situation might not have been so bad.
At that time, Shakil Rizvi said, ‘The Russia-Ukraine war and the dollar crisis have created problems – there is no denying it. Moreover, the current global economy and its related forecasts do not bode well. And in this opportunity, a circle has gained their own benefits by giving a few companies. But investors cannot avoid its responsibility. Because the investors would not have bought shares of 20 rupees at 200 rupees and they did not sell them. He said, ‘Most of the stocks that are stuck at the floor price are overpriced, even though ordinary investors can make losses on those stocks. However, it is normal that no intelligent investor buys a share of 10 rupees for 20 or 50 rupees.
He also said, ‘There is no buyer in the market or there is a liquidity crisis – this is not right. Buyers are right in the market, maybe not at the price at which the stock is stuck on the floor. And money is also in everyone’s hands, but in terms of investment, they are observing the market movements and share prices.’ For example, he said, ‘If a car worth Tk 20 lakh is announced for sale at Tk 25 lakh, no one in Bangladesh will buy this car. Does that mean no one has money? You announce the sale of a car of 20 lakhs for 15 or 18 lakhs, see if there is money or not. Theoretically the stock market is not out of it. Therefore, there is not a liquidity crisis in the stock market, but a price crisis’ – he commented.
When asked about the role of institutional investors in the current market situation, the director of DSE said, ‘First I will say that the truth is always bitter. An institutional or institutional investor should never buy shares that have been overpriced by mistake or for whatever reason. Because they also invest money for profit. Besides, you know that in our country we mean institutional investors, most of them are subsidiaries of any bank or financial institution or any other institution. The money they invest in the market is not their own money. If that company is a subsidiary of a bank, then they invest a part of the customer’s deposits of that bank for the purpose of supporting the stock market and making a profit. And the most important thing is that they also have to be accountable. They cannot make uncertain or reckless investments at will. ‘
In this context, he further said, ‘There are few days left before the end of the year. At the end of the year their accounts are subject to closing. Also, there are important matters like provisioning against unrealized gain or loss in respect of investments that have been made throughout the year, which they have to complete by December 31. Institutional investors are passive in that sense – it cannot be said. But at the beginning of the year, they will return to new investment’ – he expressed hope.
Shakil Rizvi said, ‘I met the chairman of BSEC yesterday after taking charge as the director of DSE in the new term. At this time we also talked about the general issue of the market. I see no deficiency in BSEC’s sincerity in market stability. Therefore, it is not right to blame institutional investors or BSEC or DSE-CSE without being aware themselves’- he also commented.
The director of DSE said to the investors, ‘The main objective of investment is to make profit. But it should be at the logical level. This requires well-thought and analytical investment. No matter what business you’re in – if you don’t invest wisely, you’re bound to face losses. And if it is the capital market, then it is out of the question. It is a very sensitive sector for investment. A little manipulation could put you and your entire family in the way.’
He said, ‘I accept the responsibility of regulatory bodies and stock exchanges to take action on any irregularities or mismanagement of listed companies or markets. No one can avoid this responsibility. However, the responsibility of maintaining order in the capital market falls on everyone’s shoulders.
Incidentally, although BSEC has taken numerous important steps to stabilize the capital market, it is not reflected in the market. As a result, on Monday, the first working day after the Christmas holiday on Sunday, the index fell and the transaction fell below 200 crores. Earlier, on Thursday, the last working day of the week, shares worth 227 crore 74 lakh 78 thousand rupees were traded. That was the lowest transaction since July 16, 2020.
Despite falling to the bottom, the transaction did not fall below 200 crores in the last two years, but on Monday, 198.8 million 73 thousand taka changed hands, which is the lowest in the last 2 years and 5 months, not only this year.
Less than this transaction took place on July 7, 2020. 138 crore 56 lakh 55 thousand taka changed hands that day.
The transaction on Wednesday was Tk 333 crore 58 lakh 98 thousand on the day when more than half of the companies decided to withdraw the floor price. On Thursday, transactions decreased by Tk 105 crore 84 lakh 20 thousand or 31.72 percent. On Monday it decreased by 28 crore 94 lakh 5 thousand taka or 12.70 percent.
At the end of the day on Tuesday, the transaction has slightly increased to Tk 269 crore, but the overall market situation has deteriorated. At the end of the day, only 17 companies’ share prices increased, 136 companies decreased and 160 companies’ share prices remained unchanged.
