Forma # 1.ai - ICAB

ules from SEC are required,
allowing the company to buy
back its own shares (section 58
of Bangladesh Companies Act
states clearly that a company
cannot buy its own shares).
The UK companies act of 1955
disallowed companies from
holding their own shares;
however this was repealed in
1993. The Indian capital
market has allowed buy backs
since 1998. This option can
reduce price volatility of a
particular share in the market.
• Media can play a big role in
directing the investors towards
the actual learning from the
recent disorder in the market.
They should infuse confidence
by disseminating information
regarding existence of scope
for knowledge based
investment opportunity in the
market.
• Modification is required in the
index calculation procedure
with International best
practice. Under current
method, a particular large cap
company ends up with
significant impact on the Index
movement with slight
movement in its share price.
Free-float based index
calculation can be the option
for consideration. This step
will reduce magnification of
DGEN index with great extent.
• Investors should concentrate
more on individual shares
rather than making decisions
based on market index. Still
there is scope of making
money by investing in the
shares that possess good
fundamental and technical
valuation. If a major portion of
the investors realize this
learning, significant amount of
stability can be achieved even
in this downpour.
• There is no alternative to
analysis for participation in the
capital market. Analyst
Reports/Research Reports play
a vital role in developed
markets. Investors should
realize that they are investing
in stock being an equity
partner of a company. They
should go for a thorough
health checkup of the
company selected. There are a
lot of ways to gather that
knowledge from various
institutions. Even SEC can
arrange training programs at a
large scale for investors in
general. With the right
knowledge and awareness
built, the ‘syndicates’ will not
be able to siphon out money
capitalizing on the small
investors’ ignorance.
• Political commitment towards
the development of power,
infrastructure and legislation.
Improving these sectors will
boost up industrialization in
our country. If we look at the
composition of all the scrips of
our stock market,
manufacturing sector
comprises of only 22.21 % of
the market capitalization. This
percentage needs to be
improved for a strong
economic growth. Capital
market can play a pivotal role
in this regard.
Capital Market of Bangladesh, to
us, is still ‘a mine of opportunity’.
Still the market is suitable for
investment as there are lots of
value driven shares at a
reasonable price. Investors should
come forward with a mindset of
making a long term investment.
Gain and loss both come as a
package in the investment game.
Prudent decision making can
enhance gain or reduce loss and
this should be the objective of the
investors in general.
True commitment by the
concerned regulators and the
present political government can
improve the situation. Needful
revision in the regulations with
effective enforcement, automation
in vigilance, encouraging
analytical / research reports and
creating better awareness can take
our Capital Market to a structured
level which can contribute
significantly to the economic
development.
(The author is thankful to Mr.
AKM Sohan Alam and Mr. Khaled
Maruf for their support)
The Author is Member, ICAB and
Deputy CEO & Chief Finacial Officer of
Grameenphone Ltd.
18
January - March 2011
The Bangladesh Accountant