Bangladesh’s dream of a developed economy was not overthrown along with the regime of Sheikh Hasina on Monday.
Keeping in mind the importance of a free, fair, and vibrant capital market that Bangladesh did not achieve, stakeholders stressed a massive overhaul of the market.
“The financial market framework, relevant institutions, and practices were deliberately destroyed over the past decade to benefit only a handful of people close to the government and ruin several million investors,” said Saiful Islam, a director of BRAC EPL Stock Brokerage who is also serving as the president of the DSE Brokers Association.
In a telephonic interview with The Business Standard on Monday, he said repairing the damage should be the first job of the new government, in line with the calls of present economic reality and future needs.
“We need an A-Z overhaul that should start with making accountable every single wrongdoer and overhauling the Bangladesh Securities and Exchange Commission (BSEC) and the boards of directors at other market entities, including the bourses,” he added.
“The factors that dragged the capital market down, instead of letting it flourish must not continue,” said Faruk Ahmed Siddiqi, former chairman of the country’s securities regulator.
He said, integrity of the regulatory chiefs was never questioned before 2009. Since then, corruption allegations against the two chairmen of BSEC were loud enough and still were overlooked by the government, as the regime was only concerned with their political loyalty.
An anti-corruption filing against former BSEC Chairman M Kahirul Hossain was surprisingly buried in 2019, while the incumbent BSEC Chairman was repeatedly rewarded with such a big responsibility for his loyalty to the toppled power cartel despite his past as a loan defaulter.
“Honesty is the first thing Bangladesh needs from the people in important positions,” said Faruk Ahmed Siddiqi, adding that their qualifications and skills should also be examined objectively.
Entertaining no vested quarter from the regulatory positions should be a top priority in the future, he added.
Mutual funds are an important investment instrument for capital market development, and the potential industry was destroyed in Bangladesh, only to serve the vested interests of a handful of corrupt asset managers close to the government, said several CEOs of the sectors.
Bangladesh Merchant Bankers Association’s former vice president Md Moniruzzaman who is the managing director of Prime Bank Securities, said unprecedented damage has been done to the capital market structure in the past decade.
He mentioned too many initial public offerings by junk or fraudulent firms, an extreme lack of secondary market governance, and the much needed accountability of top-tier regulatory officials, for instance.
“We must get rid of those that hurt investors’ trust,” he said, echoing many others in the capital market.
Lack of integrity and regulatory unpredictability have been identified as the biggest concerns of capital market investors, according to annual capital market sentiment surveys by LankaBangla Securities.
The major index of the Dhaka Stock Exchange nosedived from 9,000 points in December 2010, and the bearish turn is yet to be over as the index is still hovering at around 5,000 points.
“The entire financial sector, including the capital markets, suffered from a lack of trust from people. Hence, it failed to attract investors and had a lacklustre performance for quite some time, said Chartered Financial Analyst Asif Khan, chairman of Edge Asset Management.
Khan, also the president of CFA Society Bangladesh, said his community of over a hundred CFA charter holders wants to play a major role in bringing back governance in the financial sector and, in the process, making it a major driver of economic growth in the coming days.
Source: The Business Standard