Stability in Stock Market: Investors want short-term initiative
Muhammad Ayub Ali :
Amid a prolonged liquidity crisis, dwindling investor confidence, and rising negative equity, the country’s stock market remains in a fragile state.
In response to this challenging situation, Chief Advisor Dr. Muhammad Yunus outlined a five-point directive on Sunday aimed at revitalising the market. Additionally, the Stock Market Reform Committee has submitted a set of medium- and long-term recommendations designed to support structural improvements.
These recommendations align with the broader reforms proposed by the committee, which focus on simplifying the tax structure, providing policy support for institutional investors, and streamlining the initial public offering (IPO) process to ensure greater efficiency and transparency.
Furthermore, the proposed fiscal budget for 2025-26 outlines a range of tax-related incentives intended to rejuvenate the market.
According to sources in the Finance Department and the National Board of Revenue (NBR), these include tax exemptions for investors, reduced tax rates for listed companies, and higher tax burdens on unlisted firms to encourage greater market participation.
However, these strategies focus primarily on the medium- and long-term outlook.
Market analysts and investors argue that while structural reforms are important, short-term interventions are urgently needed to restore immediate stability in the market.
At a broker house in Dhaka, it was seen that some retail investors were saying with anger and frustration, “We are tired of hearing about long-term plans. We need a positive response from the market now.”
An individual investor remarked, “We need order in the market so we don’t live in fear of losing our capital every day.” A retired bank officer added, “No matter how promising the plans are, without proper implementation, investor confidence won’t return.”
Experts agree that without a coordinated effort between regulators and market participants, a recovery will be difficult. While a long-term roadmap is essential, immediate and effective short-term actions-such as liquidity support, investor relief, and rapid listing of credible companies are equally vital.
If confidence can be restored at this moment, investors will also be interested in the market again. Otherwise, medium and long-term dreams will also turn into dust.
Stakeholders suggest several practical short-term initiatives that could help stabilize the market: activating government and institutional investors, expanding the Market Stabilization Fund, easing investment limits for banks and financial institutions, offering a relief package to margin-loan-affected investors, especially those impacted since 2010, enforcing the buy-back law without delay.