It is a positive sign that Finance Minister AMA Muhith is still interested in the affairs of the country's capital market that has not been in a good shape since its collapse more than seven years back.
He has tried a number of measures in recent years to buoy up the market. But none of those has worked to any notable measure. The market has been behaving erratically; if it is buoyant for a week or two, invariably, there will be a reverse trend for an equal number of weeks or more.
All the remedial measures initiated since 2010 to streamline the affairs of the stock market and bring back the much-needed investors' confidence have largely failed to pay any worthwhile dividend.
The finance minister has in his cap quite a number of feathers for steering the economy successfully to higher growth trajectory for nearly a decade. But the unpalatable developments in the capital market and also in the banking sector must have been a frustrating experience for him.
The stock bubble burst of 2010 is now almost a forgotten chapter. However, the ill effect of the collapse is still hurting the market. But the recent unwanted incidents in the banking sector have only multiplied the woes of many, including the Finance Minister.
What has turned out to be a major problem lately is the shortage of liquidity in the banking sector. Some banks, the fourth generation ones in particular, are the worst sufferers. Banks tend to avoid long-term investment financing. In some cases, the banks do offer long-term loans through syndication. But availability of such loans in sufficient volume is essential for successful execution of large industrial units and infrastructure projects.
Thus, Mr. Muhith, has rightly felt the need for strengthening the operations of the capital market to help meet the need for long-term financing. And to achieve that objective, he would soon assign a 'small group' to make the capital market 'efficient'. He, however, did not elaborate the issue any further.
Under the circumstances, one can only guess about the people who might be included in the group. Hopefully, the government would choose competent individuals for the job.
Yet it is difficult to shun scepticism about the success of the so-called small group given the ongoing state of the stock market and the outcome of the remedial measures initiated by the government and the securities regulator in the recent past.
There is no denying that the Bangladesh stock market by now is quite old. But, unfortunately, it is yet to acquire a couple of essential traits --maturity and stability. Both are, however, inter-linked. Regulatory indifference and unscrupulous involvement of a section of key stakeholders have made the country's bourses a safe playground for the manipulators, big and small.
No market can become truly vibrant and experience reasonable growth without long-term investors. Other deficiencies, including the shortage of quality issues, have kept this particular section of investors away from the market. But they are discouraged most by the highhandedness of the manipulators.
Big manipulators having strong political connections had played their part in 1996 and 2010 and led to the collapse of the market on two occasions. And small-time manipulators are always at work inside or outside the bourses. One with sixth sense can smell their unholy presence. Though such evil practice does not cause any major damage, it hurts image of the market and erodes confidence of genuine investors.
