Country's stock market, these days, hardly makes front-page news headlines.
After the great crash of 2010, the media took interest for sometime in the developments involving the probe into the stock market scam by the Khandaker Khaled Ibrahim committee and initiatives taken to help the aggrieved investors. Thereafter they have found nothing notable in a dull and drub market that has witnessed occasional yet short-lived bouts of buoyancy.
However, a few comments coming from the incumbent finance minister, who have faced enough of criticism for 2010 stock market crash, on a number of occasions, have made news headlines, quite deservingly.
The statement he made at the unveiling of the plaque of the Bangladesh Security Exchange Commission's own building at Agargaon, Dhaka last Sunday was one such comment that would surely generate curiosity among people who keep track of stock market developments.
The finance minister said, "The laws, rules and regulations relating to the stock market until 2009 were naughty (not knotty) in nature. And those were responsible for the collapse of the stock market in 2010. The market has been completely stable for the last two years following reforms of the capital market-related laws, rules and regulations".
There is no denying that there were legal loopholes in the operations of the stock market prior to its collapse in 2010. But it may not be appropriate to claim that all the problems have been rectified.
It seems pertinent to raise a question: Was the stock market scam of 2010 due to legal lacunas only? If it was so, why did it not happen earlier? Why did the two episodes of market collapse take place in 1996 and 2010?
For building up a bubble in the stock market some other factors, in addition to legal loopholes, were definitely responsible. The first and the foremost factor was a well-knit group of manipulators having their reach to regulatory body, top echelon of the administration and management of bourses.
In fact, no thorough probe was done in either of the incidents of stock market collapse. The probe conducted in the 1996 crash listed the names of a few masterminds. But no serious efforts were made later to punish them. Such indulgence, actually, encouraged the second act of market destruction through the creation of yet another bubble of far greater dimension.
It was easy to manipulate the market during the 1990s when paper-based transactions of share were order of the day. The crooks got an easy sail when both the regulator and the bourse management were far less experienced. But the situation was entirely different when the second crash had taken place. The regulator was aware of the fact that manipulators might again be active to fleece the innocent investors. Besides, the regulator was supposed to monitor the market through constant surveillance through the application of modern information technology.
It seems that manipulation, though in a very limited scale, is still active in the market. Many tend to believe that occasional and sudden upsurge seen these days in stock prices for no tangible reasons is also the handiwork of a few manipulators.
Many get perplexed by the behaviour of the stock market on occasions. Under the political situation now prevailing in Bangladesh, the market is supposed to behave negatively. But the opposite does happen often here.
Besides, the selection of stocks by investors does also prompt many to raise their eyebrows. For instance, on Monday last, the share that saw the highest increase in price belonged to company that has stopped production for three years. Even the company reportedly has sold out its machinery. Even the unusual interest shown by investors in new stocks and the movement in prices of the same also deserve scrutiny.
So, the claim that market has been 'completely stable' for the last two years appears to be not tenable, to a great extent.
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