The share market has been stuck in price fall since many years. The index increases a bit before Eid-ul Azha. However, in the running week, the price has fallen again. Now, lack of trust is visible in investment.
Each year, in the budget, the government assures in taking steps to fix share market. But, in the budget of current year, there was no announcement of motivational package or facility over share market issue. Due to continuous price fall, the lowest prices of shares have been fixed by providing floor price.
In this circumstance, how the share market can bounce back? The reporters of The Bangladesh Pratidin talked to the market experts in this regard.
Share market analyst Professor Abu Ahmed said, “Uncertainty is active among people about several issues in Bangladesh now. The uncertainty centered on the upcoming national parliament elections. There is a sense of uncertainty among many about whether there will be fair elections or whether there will be political stability. Various economic indicators are down. The country's debt is increasing. Balance of Payments is declining. Big investment is not taking place. Especially foreign investment is now kind of stopped. Also those who are selling shares are not buying new ones. Due to this, the stock market has seen a long price decline.”
Abu Ahmed told Bangladesh Pratidin that trading is going on only around certain shares. More than 70% of the companies are locked into the floor price. No one can sell shares because of the floor price, neither can buy. How will the index increase? The floor price should be lifted from the market now. There is no such method anywhere in the world. Due to this, the price of all types of shares, both good and bad, has fallen in the market. Shares of many good companies have fallen below their fair value.
He also said 10/20 companies are doing syndicate trade. Syndicate trade is going on with the opportunity of floor price. Authorities should take action against those who are doing irregular or serial trading in the market. A vested group is spreading various rumors. Action should be taken against them, too.
Director and former president of Dhaka Stock Exchange (DSE), Shakil Rizvi said “A kind of panic has spread in the stock market. A major cause of this panic is economic instability. Bank interest rates have recently been increased by monetary policy. Interest rates on deposits have also increased. This has reduced the liquidity in the stock market. Many investors are investing in FDR. Many do not want to take the risk involved in investing in the stock market. However, although there are short-term risks in investing in the stock market, there are definitely profits in the long-term. It is more than the bank. Everyone should remember this. Fixed asset prices never fall. So now is the best time to invest in the market.”
Shakil Rizvi told The Bangladesh Pratidin that the fear created among investors has no real basis. There is nothing to fear about investing in the stock market due to economic uncertainty. The authorities have already taken several steps. The market is moving fast.
He said that rumors of various crises have created a kind of panic. The impact of this panic has fallen on the stock market. There is nothing to panic. The market will turn around quickly.
Bangladesh Merchant Bankers Association (BMBA) president Saidur Rahman said, “There is no reason for the current price drop. There is no bad situation in current market. Everyone should hold shares with confidence. If the trader has more volume than the investor, the market has a little more risk. That happened in the case of Bangladesh. Traders want quick profits. Now is the best time to invest in the market if you think long term rather than quick profit.”
He said, after the fall in prices in many countries of the world, the stock market has now turned around again. Our stock market will also turn around quickly. But the authorities have to play a role to put the market on a strong foundation. The stock market is always a long-term investment and does not allow a lack of confidence. There is no major volatility in the market. Interest in long term investment in our market is low. As a result, panic has spread among people when the market index falls.
Saidur Rahman told The Bangladesh Pratidin that long-term investment should be increased. How will the market be stabilized if everyone trades daily? Invest without paying heed to market rumors. This fear will pass and hope the market will turn around soon. The share price will also increase.
@The report was published in Bengali on print and online versions of The Bangladesh Pratidin on July 7 and rewritten in English by Lutful Hoque
