The respondents of a survey have expressed mixed views on the capital market performance in 2018.
A significant number of respondents feel that the securities regulator has capacity constraint as a regulator.
On the other hand, many respondents think that the low level of financial education among most traders is one of the main reasons behind market volatility.
Of the respondents, 29 per cent said that the performance of the capital market was moderate in 2018 while 48.5 per cent think that the performance was not good throughout the year.
The LankaBangla Securities carried out the 'Bangladesh Capital Market Sentiment Survey 2019'.
The online survey was conducted from January 1, 2019 to January 22, 2019 and 133 respondents from different milieus recorded their responses to the survey questionnaire.
A significant number of respondents feel that the country's stable economic growth will have a positive impact on the capital market in 2019.
Some 62.5 per cent of the respondents think that the integrity of the capital market will be better in 2019, compared to 2018.
While expressing opinions on the market performance in 2018, majority (41.7 per cent) blamed the lack of investors' confidence, among others, for the unstable market movement observed in 2018.
Another 30.2 per cent respondents believe that the weak regulatory framework was one of the weaknesses in 2018, while 6.2 per cent think that political instability left an impact on the market movement in the last year.
"Some 30 per cent think that political instability is liable for low participation by foreign investors," the survey report said.
While expressing their optimism about market performance in 2019, some 41.8 per cent respondents said that earning performance of listed companies will act as the greatest catalyst in improving the stock market conditions.
They have also taken into account better corporate earnings, effective new regulation, and possible low interest rate while expressing optimism for 2019.
Besides, majority (43.6 per cent) of the respondents laid importance on transparency of financial reporting and other corporate disclosures to help improve investors' trust and market integrity in 2019.
Of the respondents, 30.6 per cent feel that stable economic growth will have a positive impact on the capital market of Bangladesh in 2019.
Some 13.50 per cent of the respondents think better corporate earnings will have a positive impact on the market in 2019.
"Over 10 per cent respondents think effective new regulation will also have a positive impact on the market," the survey report said.
And 10.30 per cent of the respondents said low interest rate will also have a positive impact.
A significant number of respondents think that the capital market may become moderately bullish in 2019 and the broad index of the premier bourse may cross 6500-point market within December 31, 2019.
In that case, the average daily market turnover will be above Tk 8.0 billion.
According to the survey report, 32.6 per cent respondents see the lack of investors' confidence as a risk factor for the capital market in 2019.
While expressing their opinion regarding sector-wise performance in 2019, some 20.5 per cent respondents were ambitious about the banking sector, followed by pharmaceuticals (16.3 per cent), fuel and power (14.3 per cent) and textile (8.5 per cent).
The survey wanted to know whether the low level of financial education amongst most traders and poor certification requirements for trading eligibility are few of the main reasons for current market volatility.
In that case, the majority (82.8 per cent) respondents feel that most of the traders do not have minimum financial qualification to take knowledge-based investment decisions.
Some 52.4 per cent of the participants feel that market fraud and manipulation will be the most critical ethical issue facing the capital markets in 2019, according to the survey.
Over 61 per cent of the respondents feel that 2018 general election will have positive impact on the economy.
According to 80.9 per cent respondents, the scenario of power and electricity has got better, while 51.2 per cent think that foreign exchange reserve in 2019 will be between USD 35 billion to 40 billion.