The observance of the first-ever 'World Investor Week 2017' that concludes today (Sunday) is, from its thematic context, quite time-befitting. The week is being observed across the continents at the maiden initiative of International Organisation of Securities Commissions (IOSCO) with its focus on general investors' education and protection of their interests. Both educating the ordinary or retail investors about the basics of the capital market and protecting their interests are of critical importance for well-functioning capital markets as the conduits for widening the horizon of investment activities and, thus, accelerating the pace of economic growth. Ridding the capital markets of tricky manipulations and unfair practices -- from which no country is absolutely free -- is imperative to prevent any 'joy-ride' by the 'wrong-doers' on the general investors. In this context, the twin objectives - investor literacy and investor protection - of the IOSO's World Investor Week 2017 are, thus, of consequence for sustainable growth of the capital market.
For counties like Bangladesh which are categorised as frontier markets, the need for fulfilling such objectives are all the more pressing. The Bangladesh Securities and Exchange Commission, being 'A' category member of IOSCO, deserves kudos for organising events in the country in observance of World Investor Week 2017, keeping the afore-stated objectives into consideration. This would be considered a positive step for better positioning of Bangladesh in the global marketplace. However, graduation from the category of frontier markets (FMs) to that of emerging ones that is needed for becoming a middle-income country will be quite difficult for Bangladesh without sustained, active and wider participation of foreign portfolio funds, in concert with that of local investors, in its capital market. Bangladesh needs a well-functioning stock market so that the latter can attract household and institutional savings to its stock market to help spur investment activities in diverse fields and thus move itself onto a higher growth trajectory.
Expanding the operational activities of the stock exchanges calls for a synergy of actions in order to ensure a stable, vibrant and dynamic market. Such actions should particularly aim at enforcing transparency and accountability in the overall functioning of the market itself, in tandem with unrelenting efforts to improve and standardise corporate governance practices. The supervisory role and surveillance activities of the Bangladesh Securities and Exchange Commission (BSEC), besides promotion of wider investor education and protection of small investors' interests, are also crucially important for this purpose. Furthermore, the financials of the listed companies must reflect the actual picture of their operations so that credibility aspects that concern the investors in the market most, receive the priority attention of the capital market watchdog.
In this connection, the role of the newly-formed Financial Reporting Council can make a difference. If it functions properly matching its mandate, the scope for 'doctored accounts' that often mislead the investors and all other stakeholders, can largely be minimised. Otherwise, investor education, based on 'doctored accounts' of companies, will have little substance. It is also equally important to tackle the 'supply-side' problems in the market that still lacks depth. The evolving and innovative nature of the market will have to be taken into consideration to address such problems which are in no way insurmountable. There are all 'doables', if all the stake-holders work in harness. The real purpose of observing the World Investor Week 2017 will then be rightly served.
