Md. Muzibur Rahman :
We know that a stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies. In simple definition, it is a place where shares of pubic listed companies are traded. The role of stock market for capital formation & financing mega projects is important. The public or private investors can get advantages from stock market for financing their projects.
The industrialists can raise their capital for investment & production issuing shares or bonds in that market. One is the deficit group & the other is the surplus group. The deficit group is the Industry/Company who needs capital. The surplus group is the peoples or investors who invest. So, the stock market is the strong infrastructure & medium worldwide to engage in the production process of all idle & surplus money of small investors with well, organised, transparent & with control mechanism. It directly helps to supply capital to the Industry/Company. When we need capital for funding our companies/organisations, what we think? We think about the sources of money to get the fund & invest accordingly. Among all other sources, we can think of our capital market/share market to manage fund for financing. Thus a stock market can help a nation for its economic growth & development. It directly or indirectly contributes for wealth creations & employments.
It helps also for resource creation, distribution, diversification of economic activities, diversification of people’s income & their portfolios. Over 3 million people directly or indirectly are engaged in the trading of the stock market. The number of investors is increasing day by day. It is helping partially the solution of unemployment problems. Many unemployed youths, students, retired officials & other adult persons are directly or indirectly are involved with the stock market. Stock market is one of the indicators of national economy. It can be a source of long term financing for infrastructures & industries.
There is a correlation between the development of the economy & capital market. Mega projects/big infrastructures can avail these opportunities for collecting capital from stock market avoiding high interest rate of bank loans or foreign loans. We are dreaming a strong, vibrant & transparent stock market because a strong stock market indicates a strong economy. The Bangladesh Securities and Exchange Commission (BSEC) was established on 8th June, 1993 as the regulator of the country’s capital market under the provision of Bangladesh Securities and Exchange Commission Act 1993. The purpose of the Commission is to protect the interest of investors in securities, develop the securities market and make rules for matters connected therewith or ancillary thereto.
The Commission consists of the Chairman and four Commissioners who are appointed for full time by the Government. The Chairman acts as the Chief Executive of the Commission. The Commission is a statutory body and attached to the Ministry of Finance. On the other hand, Bangladesh Bank (BB), the central bank and apex regulatory body for the country’s monetary and financial system. BB performs all the core functions of a typical monetary and financial sector regulator, and a number of other non core functions. Both of them are the government institutions are performing for sound implementations of economic & financial policies of the country.
They are not contrary to each other but complementary for the execution of government’s economic & developments policies. Recently some remarks/comments in the social & news media on the stock market activities disappointed the peoples/small investors which reflect on the market. But we should give rational (true) comments on the market. So far, we know that both the regulators (BSEC & BB) are working for the positive development of the stock market. We think & hope that both the regulators will perform coordinated efforts to develop the stock market for the sake of the nation.
(Md. Muzibur Rahman is writes on development & economic issues, can be reached at: E-mail: [email protected])
