Salman F Rahman, private industry and investment adviser to the Prime Minister, on Tuesday stressed the need to strengthen the base of institutional investors to stabilize the capital market.
“We have a deficit of institutional investors, which is a big problem for the capital market,” he said, adding that 80% of investors are in retail but, in other countries, the situation is quite the opposite.
He was speaking as a guest of honor at a meeting on “The Importance of Financial Literacy in Capital Market Development” organized by the Bangladesh Merchant Bankers Association (BMBA) on the occasion of the World Investor Week, a global campaign to raise awareness of the importance of investor education and protection.
Salman F Rahman mentioned that the Bangladesh Securities and Exchange Commission (BSEC) has already carried out many reforms for the development of the capital market.
But financial literacy is very important for investors as well as for authorized traders and institutional employees to become more professional.
Salman F Rahman highlighted strengthening mutual funds so that new investors who have a lack of knowledge about the capital market can receive appropriate returns after investing in stocks.
Emphasizing the need for a vibrant bond market, he said: “The size of our bond market is only 2-3% of the equity market. But it is 3 to 4 times higher in other countries.
The prime minister’s adviser defended market fluctuations and said the market corrects after rallies, which is a regular occurrence in a capital market.
“Now the market is growing as the economy grows. This is also part of the lesson. A lot of people make negative comments without understanding the reason for the rise in stock indexes,” he added.
BSEC President Prof. Shibli Rubayat-Ul-Islam said: “The stock market is heading towards maturity. So we need to be more professional in the market now. “
Md Moniruzzaman, Managing Director of IDLC Investments, gave a keynote presentation at the event chaired by BMBA President Saidur Rahman.
He underlined the importance of financial literacy in the development of financial markets from the perspective of investors in general.
Sharif Anwar Hossain, President of the DSE Brokers Association of Bangladesh (DBA), and Hasan Imam Rubel, President of the Capital Market Journalists’ Forum, also attended the program.
Investor Week, which runs until October 10, began with a call to protect investors from securities fraud, price manipulation, misrepresentation and insider trading.