Stock market needs greaterinflow of funds: Experts

Nizam AhmedFresh investment by public and private sectors is essential at the moment to boost the sagging stock market of the country, experts said on Wednesday. They said investment from financial institutions like insurance companies and other fund providers could also play a significant role to buoy up the stock market. "The authorities should ask the companies to issue initial public offerings (IPOs) for mobilising a part of their investment worth millions of dollars from the stock market," AB Mirza Azizul Islam, a former adviser to the past caretaker government told the FE. The continuous bearish trend in the stock market, despite some recent efforts from public and private sectors to boost the stock trading, has baffled the experts over the past weeks. They said price of stocks that had fallen beyond their face-value should have drawn investors' attention in accordance with the normal market behaviour. "It (index) is like a tennis ball, if it falls to the ground it bounces back at least up to a certain height," a stock broker told the FE. "But it is reverse in case of trading in the country's two bourses, Dhaka and Chittagong," he said. Most experts said the lack of confidence on the market was the cause of the fall in share prices as the investors apparently are trying to leave the market offloading shares. "IPOs from any reputed local or foreign firm will help regain the investors' confidence," said Mirza Azizul Islam, who is also a former chairman of the Securities Exchange Commission, the watchdog of the country's capital market. He said many reputed local, foreign and government firms were in the process of offloading their stakes. "They should be told to raise a part of their capital from the country's stock market," Mirza added. He deplored that despite commitment, the authorities concerned could not yet make some 22 government institutions invest in the capital market. Finance Minister AMA Muhith had assured earlier that some 22 state-owned entities would offload their shares in the capital market. "This is the high time for the government to come up with the fund to salvage the stock market, otherwise it will have to pay for that," a stock broker told the FE. The number of investors may be three million in the country, but the transactions of the stock market are watched by millions, who generally blame the government for fall or crash of the market, traders say. However some other experts smelt rat in the process of continuous fall of the indices with occasional fluctuations. "We must try to know why the market is behaving this way," another expert said. Following stock crash in December government took several initiatives to boost the market and also launched an inquiry into the alleged manipulation. However, some actions were lauded and some others were criticized, but the stock market is yet to recover. Experts say there should be another drive to salvage the stock market by involving government and private financial organisations, insurance and other financial firms in the market. The general benchmark of the Dhaka Stock Exchange, the country's principal bourse, was stable at 5,209.40 points, gaining 0.08 per cent, at the close of trading on Wednesday. The DSE rallied some 169 points at the close of day's trading after four days of falling streak, when the index shed 237 points to stand at 5308.79 points at the close on Thursday last (October 27). Of the 250 issues traded on Wednesday, 97 advanced, 144 declined and nine remained unchanged, and the turnover was Tk 2.82 billion.