Market response to BF launching frustrates experts, stakeholders
Sunday, 8 May 2011
Mohammad Mufazzal
Frustrated by the negative response of the market to the launch of the Bangladesh Fund (BF), the biggest ever open-ended mutual fund in the country, leaders of the bourses and experts Saturday suggested measures of varied nature to stabilise the stock market. The Bangladesh Fund, on which much hope was pinned earlier, failed to stimulate the investors, as the major index of the Dhaka Stock Exchange (DSE) shed more than 73 points on its launching on May 5 last. "It is not possible for two or three funds, including the Bangladesh Fund, to lift the market, unless the government solves the problems that are responsible for dragging the market down," president of the Chittagong Stock Exchange (CSE) Fakhor Uddin Ali Ahmed told the FE. "The government should help identify the loopholes in the securities laws." He said the government should come forward to solve other problems that are hindering the stabilisation of the market. "Otherwise, the market will never be able to overcome the crisis," he added. The presidents of both the stock exchanges of the country emphasised on providing easy funds to the banks and NBFIs and immediate restructuring of the Securities and Exchange Commission (SEC) for market recovery. Many shareholders however blamed some listed companies for declaring dividends well below their expectation. "The government should bring stability in the market by implementing the proposed initiatives," president of the Dhaka Stock Exchange (DSE) Shakil Rizvi told the FE. He said presently no investor is in peace as no solution to their problems in sight. "The banks are also in a difficult situation, as they are not being able to manage funds that can be invested in stock market," Mr Rizvi added. Echoing the DSE president, former chairman of the SEC Faruq Ahmed Siddiqi and former chief executive officer (CEO) of the DSE Salahuddin Ahmed Khan said the banks are not in a proper situation to support the market. However, Mr Siddiqi expressed his optimism about the recovery of the stock market by adding, "It takes some time for restoring confidence among the investors, if once it is shaken." The DSE president also said the poor dividend declaration is another reason behind the investors' reluctance to make new investment decisions. Last week, a total of 27 companies declared dividends on the same day. However, those were not in line with their expectations. Regarding the success of Bangladesh Fund, the experts said the fund is not mature enough to support the market, as it is yet to accumulate money equivalent to its total size.
Frustrated by the negative response of the market to the launch of the Bangladesh Fund (BF), the biggest ever open-ended mutual fund in the country, leaders of the bourses and experts Saturday suggested measures of varied nature to stabilise the stock market. The Bangladesh Fund, on which much hope was pinned earlier, failed to stimulate the investors, as the major index of the Dhaka Stock Exchange (DSE) shed more than 73 points on its launching on May 5 last. "It is not possible for two or three funds, including the Bangladesh Fund, to lift the market, unless the government solves the problems that are responsible for dragging the market down," president of the Chittagong Stock Exchange (CSE) Fakhor Uddin Ali Ahmed told the FE. "The government should help identify the loopholes in the securities laws." He said the government should come forward to solve other problems that are hindering the stabilisation of the market. "Otherwise, the market will never be able to overcome the crisis," he added. The presidents of both the stock exchanges of the country emphasised on providing easy funds to the banks and NBFIs and immediate restructuring of the Securities and Exchange Commission (SEC) for market recovery. Many shareholders however blamed some listed companies for declaring dividends well below their expectation. "The government should bring stability in the market by implementing the proposed initiatives," president of the Dhaka Stock Exchange (DSE) Shakil Rizvi told the FE. He said presently no investor is in peace as no solution to their problems in sight. "The banks are also in a difficult situation, as they are not being able to manage funds that can be invested in stock market," Mr Rizvi added. Echoing the DSE president, former chairman of the SEC Faruq Ahmed Siddiqi and former chief executive officer (CEO) of the DSE Salahuddin Ahmed Khan said the banks are not in a proper situation to support the market. However, Mr Siddiqi expressed his optimism about the recovery of the stock market by adding, "It takes some time for restoring confidence among the investors, if once it is shaken." The DSE president also said the poor dividend declaration is another reason behind the investors' reluctance to make new investment decisions. Last week, a total of 27 companies declared dividends on the same day. However, those were not in line with their expectations. Regarding the success of Bangladesh Fund, the experts said the fund is not mature enough to support the market, as it is yet to accumulate money equivalent to its total size.