Md. Muzibur Rahman :
We know that the role of stock market for capital formation & financing mega projects is important.
The public or private investors can get advantages from stock market for financing their projects. The industrialists can raise their capital for investment & production issuing shares or bonds in that market. One is the deficit group & the other is the surplus group.
The deficit group is the Industry/Company who needs capital. The surplus group is the peoples or investors who invest. So, the stock market is the strong infrastructure & medium worldwide to engage in the production process of all idle & surplus money of small investors with well, organized, transparent & with control mechanism.
It directly helps to supply capital to the Industry/Company. When we need capital for funding our companies/organizations, what we think? We think about the sources of money to get the fund & invest accordingly.
Among all other sources, we can think of our capital market/share market to manage fund for financing. Thus a stock market can help a nation for its economic growth & development. It directly or indirectly contributes for wealth creations & employments.
It helps also for resource creation, distribution, redistribution, diversification of economic activities, diversification of people’s income & their portfolios.
Over 3 million people directly or indirectly are engaged in the trading of the stock market in Bangladesh. The numbers of investor are increasing day by day.
It is helping partial solution of unemployment problems. Many unemployed youths, students, retired officials & other adult persons directly or indirectly are involved with the stock market. The stock market serves as an important indicator of the overall health and sentiment of the economy.
Movements in stock prices and stock market indices can reflect economic trends, investor confidence, and market sentiment. Positive stock market performance is often associated with a buoyant economy, while significant declines may indicate economic challenges.
There is a correlation between the development of the economy & capital market. Its role is also investment and savings, corporate governance and transparency, benchmark for valuation of the products, efficient allocation of capital & much more. The Regulating Authority is trying to various stakeholders to invest in stock market.
Bangladesh Bank recently had issued a circular about investing of expatriates in the stock market. The expatriates can be attracted to invest in the stock market. The prices of the products are much low level for economic & political turmoil of the country. They can buy the good fundamental shares at reasonable price & can be benefitted in the long run.
The expatriates send their money to their native land for purchasing land, household appliance, to make house, to buy plot & flat, for the execution cost of relative’s marriage, for various entertainment &ceremony etc. They can invest in the stock market for their personal & social gain in the future avoiding investment in the unproductive sectors.
Recently they are sending more remittance in the country & it is helpful for our reserve increase. If they invest in the stock market for long term, they will be benefitted too much because maximum stocks are undervalued in this time.
The Regulating Authority can make arrangements to advertise, communicate through various diplomatic channels with the expatriates for investing in the stock market. Moreover, more foreign companies can be attracted to invest in our capital market. Before some days, BSEC had already begun ‘Road Shows’ of capital market in the foreign land. The purpose and goal of the ‘Road Shows’ was quite successful.
The economic development of Bangladesh, the low price situation of the products of the country’s stock market which is lucrative for investment, investment-friendly facilities and possibilities, development activities and the positive steps taken by the government were highlighted in the road shows.
The expatriates and foreign investors were invited to these mega international events. They were enthralled by the overall progress of the policy in various sectors including economic development, investment-friendly opportunities and prospects, development activities of the stock market in Bangladesh.
BSEC had organized ‘Road Show’ on Bangladesh capital markets in Dubai to net non-resident Bangladeshis (NRBs) and foreign investors. It had completed road shows in Switzerland & UK, USA which are very successful.
There are plans to hold similar road shows in London, Rome, Toronto, New York, Hong Kong, Singapore, Shanghai and Tokyo in future.
It is hoping that these programs will help to accelerate the development of our capital market by exchanging knowledge & ideas from these countries. We hope that Bangladesh capital market will achieve its desired goals in near future & will perform a positive role in domestic & international market & also will be a developed one in the world.
It’s important to note that the stock market operates within a broader economic framework, and its impact on the economy can be influenced by various factors such as regulatory environment, market efficiency, investor sentiment, and macroeconomic conditions.
Sound regulation, investor protection mechanisms, and effective market supervision are crucial to maintain the integrity and stability of the stock market and its role in economic development. Our expatriates can be a great source for supplying capital in our stock market & they can be induced to come & invest in this sector. The result will be win-win situation between the expatriates &their motherland.
(The author writes on economic, development & rising issues & can be reached at: E-mail: [email protected])
