Market manipulation is one of the causes of capital market instability in Bangladesh.
This issue was investigated by former deputy governor of the Bangladesh Bank Khondkar Ibrahim Khaled and his report cited market manipulation behind market instability, said former caretaker government adviser AB Mirza Azizul Islam.
He was speaking at a conference of Bangladesh Economists’ Forum in the city yesterday.
In his presentation, the former SEC chairman suggested increasing the number of initial public offerings.
More shares will bring balance between supply and demand, and give more options to investors, he said.
He, however, said: “The promised off-loading of shares of 26 state-owned enterprises has not been materialized.”
Centre for Policy Dialogue Executive Director Mostafizur Rahman said unless the manipulators are remained untouchable, the market would not operate in its normal course. “Market crash will happen again.”
Former finance minister Saiduzzaman said there is a lack of coordination between regulators including Bangladesh Bank and Bangladesh Securities and Exchange Commission.
Despite having lower savings rate in the banks, depositors are reluctant to move towards the share market for lack of confidence, economists told at an earlier session.
Banks are though offering lower interest rate on deposit due to excess liquidity, but depositors still rely on the banks than share market, Bangladesh Bank Governor Atiur Rahman told the Dhaka Tribune on the sidelines.
This is because the bank clients get proper judgment against the fraud in the banking sector, he added.
Addressing a session, he suggested entrepreneurs to mobilize fund from the stock market as the banks do not lend for a long period of time as the banks’ deposits are of short term nature.
“It’s not possible for banks to give loans for 10-year term … the country’s economy would have been more rich if banks could provide long term loans,” he said.
The governor said there is a lack of good governance in the banking sector mainly in the state-owned ones. “We are trying to overcome the problems and establish digital system to ensure transparency.”
Planning Minister AHM Mustafa Kamal said there is no positive reflection of economic progress in the share market due to lack of confidence of general investors.
He said the market could not yet recover the investors’ confidence after three years of debacle in 2010
