The market intermediaries have called for good governance and listing of good companies to minimise the volatility in stocks.
The urging came on Monday at a meeting, where top brokers, issue managers and asset management companies were present.
State-run Investment Corporation of Bangladesh (ICB) arranged the meeting at its office in Dhaka against the backdrop of the capital market's glum outlook.
The key index of the Dhaka Stock Exchange (DSE) shed 226 points during the last six consecutive sessions
With Monday's massive correction, the index lost 1,239 points or 20.8 per cent from its highest level-- 5,950 points--since 24th January this year.
At the meeting, the participants said the market intermediaries will have to play their roles along with raising voice against the malpractices prevalent in case of audit jobs and the abnormal price hike in debut trading.
Md. Shakil Rizvi, a former DSE president, said the securities regulator is working on finding out a mechanism to arrest the abnormal price hike observed on debut trading.
ICB managing director Abul Hossain said many people have wrong perception about the ICB's market supportive role.
"We are trying our best to support the market," Mr Hossain said
Md. Mosaddake-Ul-Alam, deputy managing director at the ICB, said all market intermediaries should play their active roles without waiting for the ICB's intervention.
Md. Saifuddin, managing director at IDLC Securities, said large cap companies should get priority while getting listed in bourses.
Without naming, he said, a multinational bank has been earning huge profits in Bangladesh, but it is not offloading shares in the capital market.
Unilever, the largest consumer company, has yet to offload it shares in the capital market, though it is listed with the stock market of Nepal, Mr Saifuddin said.
He said past decisions taken for state-owned entities like Titas Gas were taken bypassing the interest of the capital market and investors.
"The government should take decisions without 'nationalising' private assets in the SoEs," Saifuddin said.
He said other decisions such as the extension of the tenures of the closed-end mutual funds have eroded investors' confidence in the MFs.
"Apart from distributing cash dividend, only one promise the MFs make is that the funds will be liquidated upon completion of tenures," he said, adding that more MFs should be floated to support the capital market.
Mohammad Ali, managing director at Dhaka Bank Securities, said the financial statements of about half the companies got listed during the last three years were audited by only four audit firms.
"This issue should be addressed to get the clear picture of the companies willing to go public," Mr Ali said.
Sohel Rahman, CEO at the ICB Capital Management, said the shares of newly-listed companies see as much as 400 per cent price hike in debut trading, which is a serious issue of the capital market.
"Sooner or later, the companies' share prices decline gradually and this leaves a negative impact on the market," said Mr Rahman, who is now in charge.
He said most of the companies, which were listed with the Bombay Stock Exchange in 2019, are being traded at almost prices they offered.
"This indicates that investors have the options to take part in share trading considering the fundamental strength," Mr Rahman said. "But this practice is not followed here and that's why the investors of the secondary market lose," he added.
Md. Golam Rabbani, CEO (additional charge) at the ICB Asset Management Company, acknowledged in many cases, assets managers are unable to protect the interest of the unit holders because of high government fees and the market situation."We want to manage the MFs as per the existing rules," Mr Rabbani said.
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