Due diligence overlooked in raising funds from stock market: Financial Institutions Division secretary

Companies are allowed to raise public funds from the stock market without proper due diligence, said Financial Institutions Division Secretary Md Abdur Rahman Khan.

"In the true sense, decisions should be made for approval of the initial public offering (IPO) in accordance with the complete rules and analysis in all these cases. If this is done, investors' confidence will be regained, and the stock market will turn around again," he said at a programme on Wednesday evening.

The Bangladesh Securities and Exchange Commission (BSEC) organised the programme on "Women in the Capital Market and the Independence Golden Jubilee Award 2023" at a city hotel.

The secretary said, "It is very true that there are no good stocks in the capital market. Those who are good performers, who have not cheated investors, who have actually invested the investors' money in the business and given dividends."

As a result, he added, their share prices are not falling even in such volatile conditions in the stock market.

Abdur Rahman Khan said that an investor invests based on the company's certified accounts. Investors will be misled if the reporting is inaccurate or overly optimistic earnings are shown. This will cause them to turn their backs on the capital market.

He also noted that it must be admitted that the interest of general investors in the capital market is low. One of the main reasons for this is that the companies that have raised capital have not performed well. "Action needs to be taken now to restore investor confidence," he added.

Citing the capital market as a driver for development, State Minister for Finance Waseqa Ayesha Khan highlighted various advancements, including capital market automation.

She noted that the number of women investors in the capital market is very low. According to Central Depository Bangladesh Limited, only 24% of the total investors are women, and the investment amount from women is also very low. Women's participation will increase through investment education.

Jatiya Sangsad Speaker Shirin Sharmin Chaudhury, who was the chief guest at the award-giving ceremony, said, "The way women are coming forward in all fields, they are also entering the capital market. However, more work needs to be done to increase this participation."

She expressed hope that if investment education is strengthened, women's participation will rise.