Friday, November 22, 2024

Govt actions draw doubts

Stockmarket Crash
Govt actions draw doubts
The policymakers demonstrated their lack of seriousness in identifying the real culprits behind the recent stockmarket debacle, by taking 15 days time for forming a probe committee to investigate market manipulation, said analysts yesterday.
They however said the finance minister’s confession of making mistakes, and his meeting with stakeholders sent a signal to the investors that the government is giving due consideration to stabilising the market that slumped until last week and made many of the 33 lakh investors bankrupt.
The stakeholders said withdrawal of circuit breakers on share index and individual stocks is also a good step towards restoring investors’ confidence and stabilising the market.
The announcement of active participation of institutional investors may also help boost investor confidence to some extent, they added.
But a number of issues including quick probe into the allegation of market manipulation, reform of the Securities and Exchange Commission (SEC), and increase in supply of new shares still remain left out.
They observed that it will be unwise to involve the banks in rescuing the market, as too much exposure of banks to the stockmarket may be disastrous for the overall financial sector of the country.
“I don’t get why it needs 15 days to form a probe committee when it can be done instantly. It appears that the government is not that serious about it,” said Mahmood Osman Imam, professor of the department of finance at Dhaka University.
Prof Imam made the comment a day after the government had announced a stimulus to recoup investors’ confidence that slumped as markets plunged 24 percent in two weeks this month.
Analysts said the closure of trading for the last two days gave investors time to think and re-evaluate their positions. This may help ease the panic among the investors at a time when many shares have become attractive for buying.
About the trade suspension by the regulator and meetings between the finance minister and stakeholders, Imam said he expected a package from the government for the capital market.
Meanwhile, the issue of reforming SEC also remains withheld. The finance minister pledged increasing manpower of SEC, bypassing the issue of reforming the commission, which suffers from capacity constraint in different areas including monitoring and surveillance.
“Monitoring and surveillance capacity of both SEC and Bangladesh Bank have to be strengthened so that the regulators can take immediate action when any manipulation is detected,” said Imam.
Mirza Azizul Islam, a former chairman of SEC also a former finance adviser to a caretaker government, however, said the government steps to stabilise the market, and its interest in investigating the allegation of market manipulation might have a positive impact among investors.
“But no direction came regarding addressing the demand-supply imbalance in the market,” he said, “We also did not see any disclosure about bringing twenty six state-owned companies to the market to address the supply-demand gap.”
Abu Ahmed, professor of the department of economics at the University of Dhaka, echoed Mirza Aziz. “But it depends on the behaviour of institutional investors,” said Abu Ahmed, also a market analyst.
He said the decision to withdraw circuit breakers on index is good because it does not reflect the normal market behaviour.
The DU professor, however, said the market has got bigger than what it had been during the 1996 crash, and it will be unwise to judge the present stockmarket based on the 1996 viewpoint.
“The market now involves thirty three lakh investors, and if the investors return home losing their investment, it might cost the government politically,” he said.
According to him, the government should not take so much time to form the probe committee.
“It can be done in three to four days. Early formation of the probe committee will reflect seriousness of the government,” he said, adding that the terms of reference of the probe committee should be wider allowing it to investigate whether there was any capital flight from the country.
“It is important to find out where the money went in the last two to three months, who took the advantages of the loopholes in the system, what were the faults of SEC, and how demands were created in the share market,” he said.
Khondkar Ibrahim Khaled, former deputy governor of Bangladesh Bank, said SEC should be restructured.
He said 15 cases were filed against suspected market manipulators in 1996, but none of those saw any verdict. There are stay orders against all of those.
“Even the lawyer, who took initiative to revive the cases, was removed,” he said.
“Irrespective of governments, a syndicate has been able to control SEC,” he alleged, adding, “The main problem lies here. SEC should control the stockmarket. The market can never be stable if SEC runs on the advices of the syndicate.”
He also warned about involving all banks to rescue the capital market.
“It is not the banks’ job to engage in stockmarket. They may invest a negligible amount. They have to operate within the laws of the central bank,” he said, “Otherwise we will see a banking crisis as we are seeing now in the stockmarket.”
Analysts also said the plan to reinvest profits from banks does not seem enough to support the market. It might lead to a mere one-day bounce back.
“The key for regulators is to reassure all investors — retail, institutional and even foreign — of strong economic fundamentals,” said Ifty Islam, managing partner of Asian Tiger Capital Partners.
“The underlying story is, our economy is strong,” he said.

 

Via: The Daily Star

Related News

JU student lost life after being hit by battery-run rickshaw on campus

News Desk : dhakamirror.com A first-year student of Jahangirnagar University died after she was hit by a battery-powered rickshaw on campus yesterday evening. Afsana Karim was a student of marketing and a resident of Begum Khaleda Zia Hall. Her parents live in Sherpur. In security camera footage, Afsana was seen walking near the arts building ... Read more

Education must foster creativity : Professor Yunus

News Desk : dhakamirror.com Chief Adviser Dr Muhammad Yunus said on Wednesday (20 November) that Bangladesh’s education system must foster creativity to create a generation of entrepreneurs. “We should reform the education system in a way that it creates a generation of entrepreneurs. We need education, which helps students become creative people. Our young people ... Read more

World Day of Remembrance for Road Traffic Victims observed

News Desk : dhakamirror.com World Day of Remembrance for Road Traffic Victims was observed in Bangladesh on Sunday as elsewhere in the world. To mark the day, different government and non-government organisations held different programmes on the day. The day is commemorated on the third Sunday of November each year. Dhaka North City Corporation on ... Read more

Chief Adviser opens waiting lounge at Dhaka airport

News Desk : dhakamirror.com Dr. Muhammad Yunus has opened a new waiting lounge for expatriate workers and their families at Hazrat Shahjalal International Airport in Dhaka. The lounge was inaugurated after his return from the COP29 climate conference in Baku, Azerbaijan. Dr. Yunus mentioned that he had previously opened a lounge for expatriate workers before ... Read more

Saudi Arabia opens doors to nurses from Bangladesh in landmark move

There are only a few dozen clinicians among nearly 30 lakh Bangladeshi expatriates in Saudi Arabia Kamran Siddiqui Highlights Saudi Arabia has begun recruiting Bangladeshi nurses, marking a significant milestone in overseas employment, as the Gulf nation traditionally employs lower-wage, less-skilled workers from the country. The recruitment process, targeting an initial intake of 500 nurses, ... Read more

DU changes admission test for Ijtema, ‘Ka’ unit exam to February 15

News Desk : dhakamirror.com The General Admission Committee of Dhaka University (DU) has rescheduled the “Ka” unit (science) admission test to February 15 due to the Biswa Ijtema. Previously, the exam was scheduled for February 1. “We decided to defer the ‘Ka’ unit test date as it coincides with Biswa Ijtema,” said Professor Mamun Ahmed, ... Read more

Yunus opens dedicated lounge for migrant workers at Dhaka airport

News Desk : dhakamirror.com In a heartfelt acknowledgment of their invaluable contributions, the country is set to honour its expatriate workers with a new lounge at the Dhaka airport designed to make their journeys more comfortable. Chief Adviser Professor Muhammad Yunus on Monday inaugurated a special lounge for the country’s migrant workers at Hazrat Shahjalal ... Read more

Khaleda’s 10-year jail term stayed by SC

News Desk : dhakamirror.com The Appellate Division of the Supreme Court on Monday stayed a 2018 High Court ruling that had extended Bangladesh Nationalist Party chairperson Khaleda Zia’s prison sentence from five years to 10 years in the Shaheed Ziaur Rahman Orphanage Trust case. A three-member Appellate Division bench led by Justice Md Ashfaqul Islam ... Read more

JnU students end protests after demands met

News Desk : dhakamirror.com Jagannath University students on Tuesday withdrew their movement, for the construction of the university’s second campus, after the interim government accepted their demands. AKM Rakib, an organiser of the movement, told reporters after a meeting held at the education ministry on the day that they were withdrawing the movement. ‘The government ... Read more

Applications for school admission begin

News Desk : dhakamirror.com Admission applications for grades one to nine in both public and private schools have started this morning. Students can start applying online from 11am. The application process will continue until 5pm on November 30, reports The Business Standard. After the application period ends, students will be chosen through a digital lottery, ... Read more

Grandchildren of deceased government employees now eligible to receive pensions, gratuity

News Desk : dhakamirror.com Government employees’ pensions and retirement benefits have been modified by the government, allowing their grandchildren to receive them in the event that no other eligible nominee is available. In this regard, a notification was released by the finance ministry today, November 10. The amendment comes amid a legal complication in this ... Read more

Entry exam for MBBS on January 17 and BDS on February 28

News Desk : dhakamirror.com The entrance exam for MBBS (Bachelor of Medicine and Bachelor of Surgery) 2024-2025 academic year will be held on January 17, while the BDS (Bachelor of Dental Surgery ) is scheduled for February 28. The dates were finalised at a meeting today at the Ministry of Health and Family Welfare at ... Read more

BMD Winter outlook: Winter going to be colder this year

News Desk : dhakamirror.com Eight to ten mild to moderate cold waves could hit the country in the upcoming winter, a Bangladesh Meteorological Department (BMD) official stated yesterday. Two to three of those waves could turn into severe cold waves, with temperatures likely to drop as low as 4 degree Celsius, in the northwestern, northeastern, ... Read more

Govt made the decision to revoke Cyber Security Act

News Desk : dhakamirror.com Bangladesh’s interim government advisory council, on Thursday, made a policy decision to repeal the controversial Cyber Security Act. This decision was made at a meeting held at the office of chief adviser Professor Muhammad Yunus in Tejgaon, Dhaka. After the meeting, environment, forests and climate change adviser Syeda Rizwana Hassan confirmed ... Read more

Everyone must work together to save rivers: Rizwana

News Desk : dhakamirror.com “We must save rivers and stop pollution caused by mills and industries. However, the entire responsibility cannot be imposed on the government. Everyone must work together,” said Environment Adviser Syeda Rizwana Hasan yesterday. “In a democracy, everyone has a stake. Preservation of the environment will only be successful when everybody participates,” ... Read more

Actress Shomi Kaiser arrested

News Desk : dhakamirror.com Actress Shomi Kaiser has been arrested from Uttara in the capital, said the police. Uttara West police station officer-in-charge Hafizur Rahman stated that she was arrested from a house in Sector 4 of Uttara at around 1:00 am on Wednesday. An on-duty officer at the Uttara (West) police station confirmed that ... Read more

Ijtema scheduled for two phases from January 31 to February 9: home adviser

News Desk : dhakamirror.com Bishwa Ijtema is set to take place in two phases from January 31 to February 9 next year, as announced today by Home Affairs Adviser Lt Gen (retd) Jahangir Alam Chowdhury. The first phase will be held from January 31 to February 2, with the second phase from February 7 to ... Read more

Bangladesh sent 9.3 lakh workers abroad since Jan

BSS With sincere efforts by different stakeholders, especially the government, Bangladesh sent abroad 9.3 lakh workers with jobs from January to 2 November this year. “The trend of overseas employment is satisfactory so far and we are expecting to send more remittance senders with jobs this year,” Director of Bureau of Manpower Employment and Training ... Read more

Policymakers unaware of people’s struggles as they don’t rely on public transport, says Road Safety Foundation

News Desk : dhakamirror.com Those responsible for public transport policymaking in the country do not use public transport in the capital, so they do not understand the sufferings people endure, Road Safety Foundation (RSF) Chairman AI Mahbub Uddin Ahmed said today (2 November). The chairman of the Road Safety Foundation (RSF), AI Mahbub Uddin Ahmed, ... Read more

Job aspirants can now try 4 times for BCS exam

News Desk : dhakamirror.com From now a job seekers will be able to sit for Bangladesh Civil Service (BCS) examinations up to a maximum of four times. This decision was taken at a meeting of the advisory council chaired by chief adviser Dr Mohammad Yunus at his office on Thursday, said a press release from ... Read more