Stakeholders concerned are deeply depressed by the current 'moribund' state of the stock market. Their frustration, apparently, is now at its peak as they see no light at the end of the tunnel.
The reason behind their disappointment is understandable. The market that had collapsed eight years back has not shown any real sign of a turnaround. What the market witnesses from time to time are a few short-lived rallies.
The incumbent government was deeply embarrassed by the 2010 market collapse. In fact, it was the second setback that the ruling Awami League suffered in the matters of managing the country's stock market. The Awami League was at the helm of the statecraft in 1996 when the country's stock market experienced its first ever crash. Small investors in millions turned paupers overnight at that time.
Since the second collapse of the market, the government has tried many remedies to buoy up the market but failed in its mission. It has apparently given up and left the market to determine its own course. The market, however, is not back on the track. Rather some manipulative activities have marred the prospect of any market revival. And allegations have it that the market regulator is not active enough to drive the manipulators out of the market.
What has been happening with the shares of Monno Jute Stafflers, a small cap company, is a glaring example of manipulation. Its share having a face value of Tk 10 each is now being traded at over Tk 5,400. The net asset value (NAV) of a share of the company as of March, 2018 is Tk 48.39. The truth is that NAV declined by about Tk 4.0 between June 2017 and March 2018.
The financials of the Monno Stafflers do tell a different story and there is no valid reason for the investors becoming crazy about its shares. Rather the opposite should have happened. The company paid 25 per cent cash dividend in 2000, 2002, 2004 and 2006 and 10 per cent from 2011 to 2016. It paid 15 per cent stock dividend in 2017 when the price of its share was Tk 520 each. The company declared 350 per cent stock dividend in 2018, making a section of investors crazy about owning its shares. Monno Stafflers' is the costliest share in the market at the moment. Even many blue chips that offer very handsome dividends regularly are falling behind. It has to be mentioned here that declaration of stock dividend by listed companies has remained a grey area and the Bangladesh Securities and Exchange Commission (BSEC) has never tried to look into it.
It is not that sponsors of the Monno Stafflers have released their shares taking advantage of the market price of the company. Institutional investors have disposed of a part of their holding in recent years. The share of the public holding has increased by about 5.0 per cent in recent years.
Some manipulative actions are certainly behind the meteoric rise in stock prices of Monno. Manipulators, usually, select some shares and operate on those from time to time. Even in a dull market, these stocks are found to be in high demand.
It is difficult to say that the securities regulator has been sufficiently active to stop such manipulative activities. What is generally observed that the regulator seek information from the company concerned whether it has any price-sensitive information or not. In most cases, companies do replay in the negative. But that does not help the situation. The game goes on unabated.
Last week the BSEC reportedly came out with a formula to revamp the sagging stock market. Buoying up institutional investment remains at the top of its agenda. There have been formulas and prescriptions galore to help raise investors' confidence in the market, but those did not help much in meeting the objectives. It would be rather a good job on the part of the BSEC to right the wrongs now being committed in the market. That might help regain the lost confidence in the market, slowly and steadily.