The share market of the country has been facing liquidity crisis for few months and the transaction of Tk thousands of crore was downed to less than Tk 300 crore in Dhaka Stock Exchange.
The investors are not active in share trading. Everyday, its visible that only share of few companies is being traded among all the listed companies. Among the 300 listed companies, transactions are happening in share of 25 to 30 companies. As a result the index was fallen and share price nosedived.
How the market can be improved and recover in the present condition of liquidity crisis? Regarding it, the reporter of The Bangladesh Pratidin talked to some market experts.
Former caretaker government advisor Dr Mirza ABM Azizul Islam said, “The liquidity in the banks isn’t in good condition and they have been failing to provide sufficient loans. Many banks don’t agree to give loan in government-determined interest rate. As a result, sufficient money isn’t coming into the hands of the people. If the investors haven’t money in hand, how they can invest in share market? So, the interest rate of bank loans should be left upon the market mechanism.
Former chairman of Bangladesh Security and Exchange Commission (BSEC), Mirza Azizul Islam said, “The share market has been in nosedive for some time and price of the share of most of the companies are very low. As the new investment is not coming into the market, the amount of trade was reduced and liquidity crisis has been observed in the market. To get recovered from the crisis, the banking investment should be made normal. The crisis in the share market is also an outcome of low investment in the country and the same thing happened here. I think the initiatives taken by BSEC in this regard are absolutely right. Now, if the crisis in bank loans is recovered, then the liquidity condition of the market will be improved.”
Former BSEC chairman Faruq Ahmed Siddiqi said, “Share market has been in stagnant condition for three months. People can’t buy or sell share due to floor price. If they can’t buy or sale, then how the transaction will be normal? The share of big companies lack movement and ‘artificial index’ has been shown for the share of small companies.”
Faruq Ahmed said the application of floor price is not justified. It could only be applied in case of worst situation. However, if the regulators lift the floor price up, then the market will be uptrend again. It will be normal after the initial problems of few days.
He said the forced interfering won’t bring any good to the market. The market should be left to the investors and buy-sell platform should be provided as well. Then, the liquidity crisis will nor more present in the market.
Former chief executive officer of Dhaka Stock Exchange (DSE), Shakil Rizvi said, “Don’t worry over liquidity crisis in share market. Price of most of the share in the market is very low now. From past experience I can say the market will bounce back shortly even after the fall of share price. The market will return to normal condition as there’s no scope for more price drop anymore.
Shakil Rizvi told The Bangladesh Pratidin, “The market index and transaction as well as share price will rise within a few weeks. It’s always seen that when the market is in nosedive, then it begin to rise again. We’re going through that situation.
He said the instability in the economy of the country also affected share market. However, there’s no need to be worried about share market investment. The regulators already took some initiatives in this regard and the market will bounce back within short time.
@The report was published on print and online versions of The Bangladesh Pratidin on December 12, 2022 and rewritten in English by Lutful Hoque
