Thursday, 2 February, 2023

Securities trading makes stock market more attractive

BSEC Chairman Prof Shibli tells the Daily Sun

Bangladesh’s capital market is stronger than ever with attractive securities in addition to the country being a lucrative investment destination, Bangladesh Securities and Exchange Commission (BSEC) Chairman Prof Shibli Rubayat-Ul-Islam has said.

In an exclusive interview with the Daily Sun, the BSEC Chairman said bonds and mutual funds offer attractive returns for investors including women.

“There have been some challenges created by many factors including the pandemic. But these challenges have been addressed by introducing floor price,” Prof Shibli said during the interview at his office in the city's Agargaon recently.

BSEC led by Prof Shibli has introduced several reforms in the market. however, the Russia- Ukraine war has created a new set of challenges due to supply chain disruptions.

BSEC recently observed the ‘World Investor Week’ campaign to promote investments in the capital market.

“We also introduced a circuit breaker to respond to any abrupt price fall in the market. I hope the situation will improve further when the global economy gets stabilised,” he said.

Prof Shibli said BSEC is working to ensure the security of investment apart from introducing a source of fixed income for general investors by expanding the bond markets and mutual funds as those will not be affected by the inflationary pressure.

“The investors get good dividends of 7 per cent to 15 per cent from these investment tools. The trading of government securities (G-Sec) began on Tuesday. This is a sustainable tool for investing as the sovereign bond has no risk factors,” he said.

The bonds help the government or corporates to raise funds from the market by providing returns in the long term. Besides, there are some treasury bills with short-term investment opportunities.

“The investors will get returns quarterly or biennially from the government securities. Now the general investors can trade the bonds independently. There is a huge demand for severing bonds globally,” Prof Shibli said.

Bangladesh achieved category – ‘A’ from the International Organization of Securities Commissions (IOSCO) for maintaining all compliance standards, which has attracted foreign investors as well.

Recently, the IOSCO, a global platform of market regulators, has included Prof Shibli in its executive council.

“I think, the participation in the IOSCO board will help us with policy reforms,” he said.

He, however, said a large volume of investment has been shifted from the country due to the volatility in the dollar price.

“Now the situation is becoming normal again. The new investors come with stable rates of the dollar at Tk 105,” he said.

“Once the broker houses opened offices at the district level, and those were expensive. We now allow digital outlets for brokers. There are over 1,000 digital outlets across the country. Digital outlets have reached up to the villages,” he added.

The BSEC Chairman suggested the listed companies improve in the reporting process to support the regulator in developing prudent policies.

“Many companies submitted substandard audit reports, sometimes they proceed with backdated reports. The regulator takes action against such practice based on complaints received from the stock exchange,” he said.

Some 654 companies are listed with capital markets. The bourse ended with a capitalization of 7.74 trillion on Wednesday.