Investors’ protection urgent as the stock market thrives

NEWS reports said 39 companies have applied to float Initial Public Offerings (IPOs) of their shares to the stock market in view of the gradual recovery of the market in the recent past. The DSE index showed upward trends in the past weeks and the volume and value of trade on the floor increased almost on a daily basis. Meanwhile, small investors are also returning to the market defying the past fears. The fears had overshadowed their mindset following the 2010 stock market manipulation and crash. But a new spurt is now in sight as more firms and investors are showing interest to engage in the bourse. Reports said 39 companies have already applied to the Security and Exchange Commission (SEC) to float the IPOs to raise Tk 2,100 crore capital to expand their business. It was almost unthinkable in the past few years while people were waiting for a change. This is because the Awami League (AL) government and stock market scams have become almost synonymous since the two major market manipulations and crash had taken place under the AL government and its party men were also involved.
Meanwhile, the Awami League has returned to power again using a farcical election but people are impatient. They want to engage in some business to earn some income to make a living. So people are defying the fears and new business firms are also coming to market. Reports said companies, tied to the textile, power, real estate, ship building, manufacturing, engineering and financial sectors have submitted IPO proposals to the SEC and the regulator is looking forward to clearing them based on the verification of their company fundamentals. As we know, in fact the stock market recovery started from last year when foreign investments silently came in at a time when the prices of shares were at the lowest. Moreover, a total of 15 local companies floated IPOs and raised Tk 1200 crore to support their business.
We know that, the stock market is the best place in a secured environment to raise capital and is used both by the government and the private sector. The government may sell bonds and debentures to collect funds for infrastructure projects and repay it from future income, instead of borrowing from banks which it has to repay from budgetary funds. But our stock market is always vulnerable to vested interest groups and its stability is always at stake. But we must know that Bangladesh must allow the stock market to grow in total safety to serve the higher growth targets of the economy. It must not be treated only as a place for small investors to engage in speculative trading.
We are hopeful of the new stock market environment but at the same time warn the market regulator and the government to keep the highest vigilance to stop the return of manipulators on the floor to steal small investors’ money. The Awami League government has a special responsibility in the light of its past controversial role in this regard.