Bangladesh Securities & Exchange Commission (BSEC) have been active in framing different policies for the stock exchanges in Bangladesh. Forward Party had been mentioning for a considerable period that inefficient policy interventions will only make things more complex and will create public distrust in the capital markets. We also mentioned that no sane investor will invest in a market where a Securities and Exchange Commission tries to intervene at its own will into the capital markets. The interventions by BSEC had only signaled that the market is dysfunctional. The general public is now looking at BSEC as the savior of the market. Ironically, that is not the role of BSEC and the further it tries to act as a savior of the market, investor confidence will sink further. BSEC’s role is in the domain of transparency and governance. Its extended role is to create an enabling market environment so that investors invest in the Bangladesh Stock market for a return over a period of years. BSEC’s role is not to play the mother’s role of feeding its children rather create a framework where children grow up with adequate health, food, education, etc. Unfortunately, BSEC has been putting its nose in every corner of the market.
The floor price ideas are fundamentally inaccurate strategy and with floor prices, investors (local and global) will get a clear signal that ‘do not invest in this market and rather run away with whatever you have.’ Market psychology and confidence has been hurt due to the floor prices. FORWARD PARTY continues to point to the fact that Government ought to focus on tax incentive and other matters so that the economy kicks back. We urge that the government realize that the failure may not be with the BSEC only but with policy initiatives taken elsewhere. For the Stock Markets to operate efficiently, a more holistic and rational approach will be needed. FORWARD PARTY urges the government to organize multi-stakeholder engagement meetings so that the overall macro-issues of the country are addressed appropriately. An abrupt policy here and there is only causing more pain to the economy and general investors.
FORWARD PARTY believes that the Government is failing miserably in the domain of revitalizing the stock markets and that it needs to re-organize its thought process and develop effective policy interventions (Best is to allow the market to fall and then efficient equilibrium pricing will result within a matter of 5 to 10 days). This action should be properly conveyed to the investors. This may seem brutal initially and many may lose money overnight, but the dynamics of the market cannot be contained by useless policy interventions. It likened to disown gravitational power which is a rudimentary law of physics.
The sooner the Government understands its massive policy failure through BSEC (Bangladesh Securities & Exchange Commission), it will intervene with less policies and allow the markets to run its own course. FORWARD PARTY also urges the investor community to rationalize their thought processes and that they should not be looking at BSEC or the Government to intervene and believes that the market should not be artificially uplifted. These mechanisms are not healthy thoughts and inventions by BSEC to appease a certain coterie of investors have actually nailed the coffin on the last threads of investor confidence.
Time to wake up Bangladesh Government of Bangladesh.