'Investors awareness helps boost stock market growth'
Sunday, 28 December 2008
Raihan M Chowdhury
The interactive programmes taken by Dhaka Stock Exchange (DSE) and other market players to raise awareness among investors on how to invest, and in which companies, an issue neglected until some years ago, have been helping in the healthy growth of the securities market.
"We see investor awareness as a cornerstone of the country's growing securities market and that's why we have held a series of awareness raising interactions in the divisional cities and district towns in the recent years," said Dhaka Stock Exchange (DSE) chief executive officer Salahuddin Ahmed Khan.
The DSE arranged the awareness interactions in Chittagong, Sylhet, Khulna, Barisal, Rajshahi and Bogra to motivate the investors to remain updated on the fundamentals of the companies, they choose to invest in.
As investor awareness is a very important indicator of a growing stock market, he said, "we always ask investors to base their investment decision on company fundamentals, price levels and disclosed information and not on rumour-fed speculations".
Agreeing with the DSE, Mansur Alam, Member of the Securities and Exchange Commission (SEC) said investors should consider company fundamentals before deciding to invest. The SEC has also strengthened its activities to raise investors' awareness, he said.
Besides, DSE and SEC, top merchant banks like IDLC Finance, LankaBangla, AB Bank, Prime Bank and Trust Bank also arranged awareness programmes during the outgoing year.
"There should be proper dissemination of information on the company fundamentals so that the investors can easily get to know the different aspects of the operation and trends of the stock market and awareness programme in this case can help a lot," said an executive of IDLC Finance.
He said the investors should also know fully well how an investor can make profits or sustain losses out of their investments in stocks. The market intermediaries as well as the DSE have a responsibility to create investor awareness, he added.
Market operators said the stock market is growing to contribute more to the national economy. The market capitalisation of DSE now hovers around $15 billion, up from $5.0 billion in late 2006. Analysts see a better outlook for the market, with a good number of big companies, notably Grameenphone Ltd., set to float shares.
The DSE has already expanded its trading network to a good number of districts to provide its service to the investors across the country.
DSE has opened its branches in Chittagong, Sylhet and Khulna for the investors there.
The investors can now trade from their respective districts using optical fiber, radio-link and asymmetric digital subscription link (ADSL) systems.
The campaigns of the last few years to educate the investors on stock brought good results for the securities market. As a result, market capitalisation has already crossed Tk 1.0 trillion-mark and daily turnover reached about Tk 6.0 billion, said a DSE director.
He said DSE is committed to broaden the securities market for which the market is gradually growing.
The vendor companies now use optical fiber, radio-link and ADSL for businesses networking.
The DSE network in the Dhaka city covers Sadarghat to Tongi Bridge, Baridhara to Dhanmondi and Jatrabari to Mirpur.
A good number of DSE members have opened their brokerage offices at different business hubs in the Dhaka city to promote stock trading in their areas without going to the DSE office at Motijheel.
"Why will an investor at Gulshan have to go to Motijheel wasting time and braving the nagging traffic jam?", a DSE director asked.
He said DSE hopes for a significant rise in daily turnover with the broadening of wide area network (WAN) facilitated by its automated trading system which allows more and more investors across the country to go for trading simultaneously.
The DSE director expects the number of individual investors to increase by around 50,000. Currently, the market have some 0.2 million individual investors.
DSE began online stock trading in Chittagong through LankaBangla Securities, a member of both DSE and Chittagong Stock Exchange from August, 2005.
DSE has added two new CPUs increasing its daily average transaction capacity to minimum 1,50,000 transaction from its existing 1,00,000 per day.
The latest upgradation came into effect December 21,2008.
Now the mainframe HP Nonstop S7806 is able to handle 1,50,000 number of transactions per day. Earlier the transaction capacity of DSE was upgraded to 1,00,000 in March 2008 from 50,000 of 2005 by improving the capacity of CPU.
Market operators said the latest upgradation came when the market is growing to a new height to contribute more in the country's economy. The total market capitalization of DSE now hovers near $ 15 billion which was only $ 5 billion in late 2006. Analysts see the market in a better future outlook when a good number of big companies including Grameenphone Ltd are set to float shares.
Hewlett & Packard (HP) of Australia and Indonesia and Cambridge Solutions Ltd of India completed the latest upgradation project at a cost of $ 0.3 million.
"DSE's commitment to broaden the securities market is reflected in the gradual expansion of trading," said former senior vice president of the bourse, Ahmad Rashid.
A real time online trading platform would mainstream the scattered investors in stock trading, market operators said.
"Investors earlier faced problems in knowing about the latest disclosures or price fluctuations as there was no online platform. Now online trading facilitates smooth and hassle-free trading," KM Sufian, a Chittagong-based investor told the FE.
The interactive programmes taken by Dhaka Stock Exchange (DSE) and other market players to raise awareness among investors on how to invest, and in which companies, an issue neglected until some years ago, have been helping in the healthy growth of the securities market.
"We see investor awareness as a cornerstone of the country's growing securities market and that's why we have held a series of awareness raising interactions in the divisional cities and district towns in the recent years," said Dhaka Stock Exchange (DSE) chief executive officer Salahuddin Ahmed Khan.
The DSE arranged the awareness interactions in Chittagong, Sylhet, Khulna, Barisal, Rajshahi and Bogra to motivate the investors to remain updated on the fundamentals of the companies, they choose to invest in.
As investor awareness is a very important indicator of a growing stock market, he said, "we always ask investors to base their investment decision on company fundamentals, price levels and disclosed information and not on rumour-fed speculations".
Agreeing with the DSE, Mansur Alam, Member of the Securities and Exchange Commission (SEC) said investors should consider company fundamentals before deciding to invest. The SEC has also strengthened its activities to raise investors' awareness, he said.
Besides, DSE and SEC, top merchant banks like IDLC Finance, LankaBangla, AB Bank, Prime Bank and Trust Bank also arranged awareness programmes during the outgoing year.
"There should be proper dissemination of information on the company fundamentals so that the investors can easily get to know the different aspects of the operation and trends of the stock market and awareness programme in this case can help a lot," said an executive of IDLC Finance.
He said the investors should also know fully well how an investor can make profits or sustain losses out of their investments in stocks. The market intermediaries as well as the DSE have a responsibility to create investor awareness, he added.
Market operators said the stock market is growing to contribute more to the national economy. The market capitalisation of DSE now hovers around $15 billion, up from $5.0 billion in late 2006. Analysts see a better outlook for the market, with a good number of big companies, notably Grameenphone Ltd., set to float shares.
The DSE has already expanded its trading network to a good number of districts to provide its service to the investors across the country.
DSE has opened its branches in Chittagong, Sylhet and Khulna for the investors there.
The investors can now trade from their respective districts using optical fiber, radio-link and asymmetric digital subscription link (ADSL) systems.
The campaigns of the last few years to educate the investors on stock brought good results for the securities market. As a result, market capitalisation has already crossed Tk 1.0 trillion-mark and daily turnover reached about Tk 6.0 billion, said a DSE director.
He said DSE is committed to broaden the securities market for which the market is gradually growing.
The vendor companies now use optical fiber, radio-link and ADSL for businesses networking.
The DSE network in the Dhaka city covers Sadarghat to Tongi Bridge, Baridhara to Dhanmondi and Jatrabari to Mirpur.
A good number of DSE members have opened their brokerage offices at different business hubs in the Dhaka city to promote stock trading in their areas without going to the DSE office at Motijheel.
"Why will an investor at Gulshan have to go to Motijheel wasting time and braving the nagging traffic jam?", a DSE director asked.
He said DSE hopes for a significant rise in daily turnover with the broadening of wide area network (WAN) facilitated by its automated trading system which allows more and more investors across the country to go for trading simultaneously.
The DSE director expects the number of individual investors to increase by around 50,000. Currently, the market have some 0.2 million individual investors.
DSE began online stock trading in Chittagong through LankaBangla Securities, a member of both DSE and Chittagong Stock Exchange from August, 2005.
DSE has added two new CPUs increasing its daily average transaction capacity to minimum 1,50,000 transaction from its existing 1,00,000 per day.
The latest upgradation came into effect December 21,2008.
Now the mainframe HP Nonstop S7806 is able to handle 1,50,000 number of transactions per day. Earlier the transaction capacity of DSE was upgraded to 1,00,000 in March 2008 from 50,000 of 2005 by improving the capacity of CPU.
Market operators said the latest upgradation came when the market is growing to a new height to contribute more in the country's economy. The total market capitalization of DSE now hovers near $ 15 billion which was only $ 5 billion in late 2006. Analysts see the market in a better future outlook when a good number of big companies including Grameenphone Ltd are set to float shares.
Hewlett & Packard (HP) of Australia and Indonesia and Cambridge Solutions Ltd of India completed the latest upgradation project at a cost of $ 0.3 million.
"DSE's commitment to broaden the securities market is reflected in the gradual expansion of trading," said former senior vice president of the bourse, Ahmad Rashid.
A real time online trading platform would mainstream the scattered investors in stock trading, market operators said.
"Investors earlier faced problems in knowing about the latest disclosures or price fluctuations as there was no online platform. Now online trading facilitates smooth and hassle-free trading," KM Sufian, a Chittagong-based investor told the FE.