Textile sector's least representation in stock market deplored
FE Report | Friday, 13 March 2009
The outgoing chairman of the Securities and Exchange Commission (SEC), Faruq Ahmad Siddiqi, Thursday said the country's stock market does not reflect the country's real economy, as the vibrant textile sector has the least representation in the market.
Siddiqi, a former secretary, who took over as the sixth chairman of the SEC on March 15 in 2006 and retired on Thursday, was speaking at a farewell reception accorded by the Dhaka Stock Exchange at its auditorium.
On the same day the government has appointed Mansur Alam, a member of the SEC, as acting SEC chairman.
"The textile sector only accounted for 2.69 per cent of the total market capitalisation, but this sector is the lifeline of the country's economy," he said adding that the market also draws only one per cent of domestic savings for investment in the market.
Considering this, the country's stock market has a lot of potentials to expand, he said.
"This is not the place for gambling but a place for investment," he said and urged all to work together for creating a congenial atmosphere in the market.
The market witnessed significant growth in the last two years, because of mutual cooperation and understanding among the stakeholders, the outgoing president said.
The stock market accounted for 20 per cent of the country's GDP, an overwhelming increase in the last two years, but in the neighbouring countries this ratio is much higher, he added.
"Investors are getting matured due to the awareness programmes being conducted by the commission, stock exchanges and merchant banks," Faruq said.
He said there should always be a balance in the supply and demand of securities to bring stability in the market. "Excess liquidity or shortage of it destabilises the market," he added.
Referring to the book building method, recently introduced by the securities regulator, he said the scientific price discovery method would encourage the big profitable corporate houses, as it ensures fair IPO price. "This method was formulated keeping the interest of both entrepreneurs and investors in mind," he added.
DSE president Rakibur Rahman, senior vice president Saiful Islam, vice president Shakil Rizvi, senior SEC officials and DSE board members were present at the reception.
Siddiqi, a former secretary, who took over as the sixth chairman of the SEC on March 15 in 2006 and retired on Thursday, was speaking at a farewell reception accorded by the Dhaka Stock Exchange at its auditorium.
On the same day the government has appointed Mansur Alam, a member of the SEC, as acting SEC chairman.
"The textile sector only accounted for 2.69 per cent of the total market capitalisation, but this sector is the lifeline of the country's economy," he said adding that the market also draws only one per cent of domestic savings for investment in the market.
Considering this, the country's stock market has a lot of potentials to expand, he said.
"This is not the place for gambling but a place for investment," he said and urged all to work together for creating a congenial atmosphere in the market.
The market witnessed significant growth in the last two years, because of mutual cooperation and understanding among the stakeholders, the outgoing president said.
The stock market accounted for 20 per cent of the country's GDP, an overwhelming increase in the last two years, but in the neighbouring countries this ratio is much higher, he added.
"Investors are getting matured due to the awareness programmes being conducted by the commission, stock exchanges and merchant banks," Faruq said.
He said there should always be a balance in the supply and demand of securities to bring stability in the market. "Excess liquidity or shortage of it destabilises the market," he added.
Referring to the book building method, recently introduced by the securities regulator, he said the scientific price discovery method would encourage the big profitable corporate houses, as it ensures fair IPO price. "This method was formulated keeping the interest of both entrepreneurs and investors in mind," he added.
DSE president Rakibur Rahman, senior vice president Saiful Islam, vice president Shakil Rizvi, senior SEC officials and DSE board members were present at the reception.