Good corporate governance a must for stock market

Mohammad Mufazzal

The securities market in Bangladesh is trying to be consistent but it will have to go a long way for a trend that will attract investors for making investment spontaneously without facing any malpractice, experts and stakeholders said.

"We could not achieve what we were supposed to achieve in last 50 years. But we are on the track. The stakeholders will have to change their attitudes to keep pace with other developed markets across the world," said Ahasanul Islam Titu, the president of Dhaka Stock Exchange (DSE).

He said definitely the DSE has shortcomings and that's why now the premier bourse is going to be demutualised.

"The strong base of a market is also dependent on innovative products and viable tax policies. However, we have advanced enough and will have to pass a long path," said Mr. Titu.

He said after the demutualisation, the DSE management will have to perform for the sake of their existence.

On the other hand, the market experts are not happy with the governance so far established in the capital market.

"The strong base of a market is dependent on the code of conduct, rule of law and good corporate governance," said Yawer Sayeed, the managing director of the AIMS of Bangladesh, country's first private asset management company.

He said several times the market has tried to be consistent depending on its own force but artificial moves taken for the sake of some quarters' interest did not work as per the hyperbolic publicity.

"Over the years we have observed that the listed securities were either over priced or under valued. In absence of good governance, the investors were not able to know about the companies' absolute performance," Mr. Sayeed said.

He said, however, the market is trying to be consistent but it will see the success subject to establishment of good corporate governance.

On the other hand, the ICB (Investment Corporation of Bangladesh) Managing Director Md. Fayekuzzaman said the existing market trend is logical in terms of turnover, market capitalisation and benchmark index.

"If we compare the turnover, market capitalisation and the daily index observed in 2012 and 2013 with those observed in 2007 and 2008, other than the bullish period, we will find that the present trend is usual," Mr. Fayekuzzaman told the FE.

He said unfortunately many investors were affected by the market debacle due to greed and fear.
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