Mohammad Mufazzal
Stakeholders have termed introduction of the 'Investment Analysis Rules' a good beginning and expressed optimism that it would help reduce the rumour-driven investments in the capital market.
The Bangladesh Securities and Exchange Commission (BSEC) approved the Investment Analysis Rules on July 24 last providing for employing investment advisors by eligible stakeholders to give clients tips on investments. The rules will come into effect through a gazette notification in this connection.
As per the rules, merchant banks, stock brokers, stock dealers, asset management companies, investment advisers and independent research firms will form research teams comprising at least three members each. The research teams will prepare written reports for their clients.
"Independent advisers and independent research firms shall obtain registration certificates from the securities regulator to be eligible for publishing such research reports," the rules said.
The contents of a research report should include the investment rationale, methodology, investment risk, investment recommendations, target price and absolute and relative valuation, according to the rules.
"It is a good beginning. The stock brokers and stock dealers willing to provide advisory services to their clients will be able to open research wings by employing analysts," said Mr Ahsanul Islam Titu, president of the Dhaka Stock Exchange (DSE).
He expressed his optimism that the stock brokers and stock dealers now would get an opportunity to change the investment behaviour of their clients, who have the tendency of making investments without any justification.
Mohammad A Hafiz, president of Bangladesh Merchant Bankers Association (BMBA), said the research analysis rules would now help reduce the tendency of taking investment decisions based on simply rumours.
"From now on, investors will want to know as to why they will purchase a company's shares, when they will be provided tips based on a research report," Mr. Hafiz told the FE.
Dr. Swapan Kumar Bala, Chief Executive Officer of the Dhaka Stock Exchange (DSE), said by introducing the research analysis rules the securities regulator created an opportunity for the professionals to work in the capital market.
"By obtaining registration from the securities regulator the investment advisors and independent research firms will be able to prepare research papers containing the contents on investment as stipulated in the rules," he said.
The research analysis rules said any person seeking to become a research analyst must posses relevant academic and professional qualifications such as CFA/CPA, CA, CMA, CS, BMA, MBM, master degrees in Economics, Accounting, Finance or Marketing or certificates from the Bangladesh Institute of Capital Market (BICM).
Any of the analysts will also have at least three years' experience of working in an organisation involved with the capital market or financial market.
Stakeholders have termed introduction of the 'Investment Analysis Rules' a good beginning and expressed optimism that it would help reduce the rumour-driven investments in the capital market.
The Bangladesh Securities and Exchange Commission (BSEC) approved the Investment Analysis Rules on July 24 last providing for employing investment advisors by eligible stakeholders to give clients tips on investments. The rules will come into effect through a gazette notification in this connection.
As per the rules, merchant banks, stock brokers, stock dealers, asset management companies, investment advisers and independent research firms will form research teams comprising at least three members each. The research teams will prepare written reports for their clients.
"Independent advisers and independent research firms shall obtain registration certificates from the securities regulator to be eligible for publishing such research reports," the rules said.
The contents of a research report should include the investment rationale, methodology, investment risk, investment recommendations, target price and absolute and relative valuation, according to the rules.
"It is a good beginning. The stock brokers and stock dealers willing to provide advisory services to their clients will be able to open research wings by employing analysts," said Mr Ahsanul Islam Titu, president of the Dhaka Stock Exchange (DSE).
He expressed his optimism that the stock brokers and stock dealers now would get an opportunity to change the investment behaviour of their clients, who have the tendency of making investments without any justification.
Mohammad A Hafiz, president of Bangladesh Merchant Bankers Association (BMBA), said the research analysis rules would now help reduce the tendency of taking investment decisions based on simply rumours.
"From now on, investors will want to know as to why they will purchase a company's shares, when they will be provided tips based on a research report," Mr. Hafiz told the FE.
Dr. Swapan Kumar Bala, Chief Executive Officer of the Dhaka Stock Exchange (DSE), said by introducing the research analysis rules the securities regulator created an opportunity for the professionals to work in the capital market.
"By obtaining registration from the securities regulator the investment advisors and independent research firms will be able to prepare research papers containing the contents on investment as stipulated in the rules," he said.
The research analysis rules said any person seeking to become a research analyst must posses relevant academic and professional qualifications such as CFA/CPA, CA, CMA, CS, BMA, MBM, master degrees in Economics, Accounting, Finance or Marketing or certificates from the Bangladesh Institute of Capital Market (BICM).
Any of the analysts will also have at least three years' experience of working in an organisation involved with the capital market or financial market.
Blogger Comment
Facebook Comment