Concern over stock market

Investors and the broader economy are becoming increasingly concerned by the instability of the stock exchange as Bangladesh grapples with the effects of an economic downturn. The ongoing inflation and rising costs have exacerbated financial hardships for individuals while eroding investor confidence in the capital market. As a result, market activity has significantly declined, with many investors choosing to exit the market to avoid further losses. This trend poses a serious threat to the stock exchange's role as a key driver of economic growth.

To stabilise the stock exchange and restore investor confidence, immediate and decisive action is essential. The government must implement measures to regulate market activity, curb speculative trading, and promote long-term investments. Additionally, the Central Bank can play a pivotal role by ensuring adequate liquidity and enacting policies that channel investments into productive sectors, thereby supporting both economic recovery and market stability.

Equally important is fostering a transparent and investor-friendly environment. Strengthening investor protection, improving regulatory oversight, and cracking down on market manipulation are critical steps to restore trust. Furthermore, efforts to enhance financial literacy and keep investors informed about market trends and risks would contribute to building a more sustainable and resilient market ecosystem.

The government and the Securities and Exchange Commission (SEC) must also establish a robust framework to address the challenges posed by the economic downturn while safeguarding the interests of both small and large investors. This should include policies that streamline the process for companies to access funding through the stock market and initiatives to reduce the cost of compliance for listed firms, making the capital market more attractive for businesses.

By undertaking these coordinated efforts, involving the government, regulatory bodies, and the private sector, the stock exchange can be revitalised as a cornerstone of the nation's economic recovery. A stable and thriving stock market will not only boost investor confidence but also contribute to sustainable economic growth and the long-term development of the country.

Faria Nisa

Student

Department of Accounting and Finance

North South University

Faria.nisa@northsouth.edu