FE Report Speakers at a dialogue Monday strongly pleaded for allowing the stock market to choose its own course, without intervention from any quarters. Chief of the probe committee on the recent stock market scam Khondkar Ibrahim Khaled said the stock market will not be able to come out of the crisis unless, what he said, ongoing game is over. The dialogue titled, 'State of the Capital Market and Recent Policy Initiatives', was organised by the Centre for Policy Dialogue (CPD) in the city. Distinguished fellow of CPD Dr Debapriya Bhattacharya moderated the programme. Among others, former caretaker government adviser A B Mirza Azizul Islam, former finance minister M Saiduzzaman, former central bank governor Dr Mohammed Farashuddin, former SEC chairman Faruq Ahmad Siddiqi, and CPD executive director Mustafizur Rahman spoke on the occasion. "A game has been on at the stock market. The present crisis will not be over unless the game comes to an end," Mr Khaled said. "Wrong measures are being taken one after another. I think the government and the securities regulator are pointing at liquidity shortage to hide something." "Lack of confidence, not fund shortage, is the main problem in the market. Those who were responsible for the recent stock market debacle were given the responsibility to stabilise it, he said. Mr Khaled also raised questions about the capability of the government, as it failed to take actions against the people responsible for the stock market debacle. "We submitted the probe report at 9.30 am. But at 5.30 pm the finance minister said the complete report will not be published, as the names of some influential people were included in it," he said. He said the immediate-past policymakers barring a few of the Securities and Exchange Commission (SEC) was corrupt. Besides, the overhauling of the SEC was not done in proper a way, as the government compelled its two members, who had tried to contain the abnormal rise of the market, to step down. "But the then SEC chairman did not lose his job, and is still working. Then how is it possible to restore confidence in the stock market?" Mr Khaled said the SEC is failing miserably now in completing the case studies recommended by the probe committee. "Moreover, the present SEC is trying to avoid its responsibilities, riding on the government's shoulder. There is no such incident across the world where the Prime Minister held a four-hour meeting to salvage capital market." He said it was a generosity of the Prime Minister that she gave her time to intervene in the market affairs. Regarding reliability of the probe committee, Mr Khaled said one should not unnecessarily term the report 'assumption-based', as some findings were included in the report with cent per cent proof. "Those who call the report assumption-based do not know the difference between perception and assumption," he added. Yawar Sayeed, managing director of AIMS Bangladesh, said those who lured the general investors to come to the market before the debacle are not invisible these days. "We did not learn anything from the 1996 share market scam. It's not true that one who indulges in wrongdoing remaining within the law cannot be charged," Mrs Sayeed said. Former finance minister M Saiduzzaman said there was lack of co-ordination among the stakeholders before the recent stock market debacle, and the same situation is still prevailing. He urged the regulator to stick to the condition of holding at least thirty per cent shares of a listed company by its sponsor-directors, especially in the case of banks, as their sponsor-directors will have to purchase a significant number of shares to comply with the condition. Former SEC chairman A B Mirza Azizul Islam said the government should take measures in the light of further investigation, recommended by the probe committee. "Actions can be taken in line with the present probe committee's report." Regarding independency of the SEC, Mr Islam said the laws concerned ensure the regulator's independence. "The government can only give directives to the SEC, but the regulator will decide whether it would accept it or not." Islam stressed on co-ordination among the regulators of money market and capital market and stock market stakeholders. "I am optimistic about restoration of the capital market, as it presently stands near the bottom line," he added. Former Bangladesh Bank Governor Dr Mohammed Farashuddin raised questions about the role of the DSE members behind the market situation. "There are 25 to 30 matured DSE members who play the key role behind the market scene," Farashuddin said. He said the regulator also has weakness in monitoring the market. The government will have to avoid intervention in the capital market for the sake of its stability. He also stressed on reducing malpractices in preparing the companies' financial statements through proper auditing. Former SEC chairman Faruq Ahmad Siddiqi said everyone should discuss the issues that had made the stock market an overheated one in 2010. "It's not fair that the banks and financial institutions will inject their idle funds into the capital market. It should be stopped strictly." He said there is a lack of co-ordination among the central bank, the SEC, the bourses and other organisations concerned. "Manipulations of share prices took place on a number of occasions following baseless assurances of injecting funds by the stakeholders. As a result, the small investors got trapped. So, stop such intervention and let the market go on its own way," Mr Siddiqi added. Independent lawmaker Mohammad Fazlul Azim said the rules and regulations should be implemented properly for the sake of the market's stability. "The market policies should be re-written," he added. Another lawmaker and Pubali Bank Limited chairman Hafiz Ahmed Mazumder said the regulator and the government should let the market move on its own way. "The market should not face any intervention from any direction," he added. Agrani Bank Limited chairman Dr Khondoker Bazlul Hoque said the capital market should not be dependent on margin loan. He said the SEC's role before the stock market debacle was highly unfair and dubious, and the government's moves were also inefficient. DSE senior vice president Ahsanul Islam Titu said the regulator should stop the scope of operating omnibus accounts to contain the manipulation in the market. "The DSE's upgraded software -- MSA Plus -- has no provision of operating such accounts. Still a negotiation is going on whether it will allow omnibus accounts or not. That's why the DSE is taking time to launch online trading," he added. Chittagong Stock Exchange (CSE) President Mohammad Al Maruf Khan said the announcements of injecting funds by the banks, NBFIs and insurers created hopes among the investors, but ultimately they were frustrated. "The stock market stimulus package should be implemented properly," he added. Earlier, Dr Khondaker Golam Moazzem, senior Research fellow of CPD, presented the keynote paper. In his paper, Dr Moazzem said the investors have lost confidence in the market due to its present volatile trend. "Lack of transparency and lack of confidence are also visible in the market, and it is presently suffering from fund shortage. So injecting fund to stabilise the market is a faulty approach," he added. Mr Moazzem also said the SEC is yet to emerge as an efficient regulator, as it has failed to take proper actions against the manipulators. It has no surveillance software until now. On the other hand, in most cases the SEC merely warns the companies or persons for their non compliance of securities rules, he said. There is also a lack of coordination among the SEC, the Ministry of Finance and other related institutions, which is an obstacle to regulating the market. About the SEC's recent stock market rejuvenation package, he said there is little to be gained through the short-term measures, and the problems of the capital market need to be considered beyond political stand.
Experts, stakeholders oppose intervention in stock market
FE Team | Published: December 13, 2011 00:00:00 | Updated: February 01, 2018 00:00:00
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