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A total of 64% respondents from a recent survey believed that fraudulence or market manipulation was the most critical ethical issue the Bangladesh capital market was facing.
According to the survey, 37% of respondents voted for the capital market’s performance in 2023 as “really bad” and 29% as “bad”, with factors such as fear of manipulation in the market, decreased investor confidence and floor price.
A total of 100 respondents from different backgrounds participated in the survey titled “Bangladesh Capital Market Sentiment Survey 2024”, conducted by Lankabangla Securities Limited between December 13, 2023 and January 20, 2024.
The survey sought input from respondents hailing from various backgrounds to derive opinions against queries on the passing year’s market performance, macroeconomic performances and expectations, general issues about the capital market and expectation for the next year on investment avenues, especially the capital market.
The survey also found that a total of 55% of the respondents thought improvement of enforcement of existing laws and regulations, and improvement of transparency of financial reporting and other corporate disclosures were the most needed factors to improve investors’ trust in the capital market.
The current market volatility is due to a generally low level of financial education among traders, herd instinct and poor certification requirements for trading eligibility, according to 88% of respondents of the survey.
More than half of the respondents opined that depreciation of the taka against the US dollar, poor corporate governance in listed companies, weak regulatory performance and lack of large companies in the market were the reason for the relatively low participation by foreign investors in the capital market.
The majority of the respondents believed the price discovery mechanism of the existing IPO regulation needed revision.
57% of respondents believed that the SME market was ineffective, while 72% were not satisfied with the current state of the bond market, according to the survey.
The survey said that 88% of respondents felt that brokerage professionals did not have minimum financial qualifications to make knowledge-based investment decisions.
The respondents also identified lack of investor’s confidence and lack of good stocks as the primary risks for the capital market in 2024.
The participants thought that the Bangladesh capital market in 2024 may remain “moderately bullish”.
The survey also found that 56% of participants thought inflation would increase in 2024, while 50% voted that the local currency would depreciate further.
The respondents believed that foreign exchange crisis, crisis in banking sector, inflation and low remittance inflow would pose the biggest risks to the country’s economy in 2024.
(DT)
