Dhaka Stock Exchange Brokers’ Association (DBA), a platform of trading right entitlement certificate (TREC) holders of the premier bourse, had recently elected Shakil Rizvi its president for the next two years.
Working in the capital market since 1987, he is also the managing director of Shakil Rizvi Stock Ltd and former president-director of Dhaka Stock Exchange (DSE).
How do you evaluate the present state of the capital market in Bangladesh?
The state cannot be described with simply “good” or “bad”. A lot of diverse moves are going on, with increases and decreases in transactions. According to the size of the market, at least Tk1000 crore worth of shares are traded daily. Investors are hoping that the situation will be better once the parliamentary election finishes peacefully.
Is the upcoming election the only reason for slow movement of the market?
The election is more of an issue for the stock market, as it coincides with the time companies’ profit dividends are announced at the end of the year. It is also a time when investors are waiting to see which companies make the most profit, so it is also a crucial period of time.
What can be done to strengthen the market?
The capital market needs to be emphasized for overall economic development. Political commitment is needed to improve it. Political parties should mention some initiatives in their election manifestos for the market’s development. This will enable the stock to play a big role in increasing the country’s GDP growth.
What steps will DBA take for the market’s development?
After demutualization, the DSE members formed the organization. DBA firstly works to solve problems of its members, as well as in the development of the market. The regulatory bodies, stock exchange authorities and other related industries are also supported from DBA’s position. Under different circumstances, advocacy is a responsibility of the DBA. Personally, I am interested in working from the DBA to increase international exposure of this market.
What is the market getting from the Chinese consortium?
A representative of strategic partners visited the DSE board. It's just beginning and there is a long way to go. We will try to utilize their experience and capabilities in exchange for development. To increase international acceptability of DSE, we will try to help them to bring investment from different foreign organizations. Various Chinese fund managers are positive about Bangladesh's overall economy and capital market.
What should be done to avoid another market collapse like 1996 or 2010?
It has to avoid over-valuation of share prices. The reality is that no share of the world is released from this cycle of ups and downs. The investor's safeguard should be made to ensure itself. Regulators do not have too many weapons to prevent excessive evaluation outside the legal framework, in any country.
The main concern of all is small investors. If they do not invest with fresh capital in unrealized shares, then there is a lack of assurance which needs to be addressed. On the other hand, our market is much stronger and the rules have been updated ever since the crashes.
How was the implementation of demutualization?
Changes have been made in the stock exchanges’ operational structures. Brokers are no longer in control of the stock exchange. In the meantime, the Shanghai and the Shenzhen Stock Exchange were found to be the world's largest stock exchanges partner, like strategic investors. It is a big achievement of the demutualized Dhaka Stock Exchange.
What is your plan about the DBA?
It is an association of brokers. If overall stock market is not good, brokerages have no benefit. As a result, DBA will not only work to protect the interest of the brokers, but it will do whatever is necessary for the overall development of the stock market. The market size will also increase as a result.
