Stock market not overvalued, says BSEC chairman

The stock market is not overvalued, despite the stellar run-up in valuations that has taken place over the past 16 months, the securities regulator chief has said.

“Some people commented that the stock market is overvalued, but in reality, it is not overvalued,” Bangladesh Securities and Exchange Commission (BSEC) Chairman Professor Shibli Rubayat-Ul-Islam said at a webinar on Monday.

The DSEX index, the benchmark of the Dhaka Stock Exchange, has gained more than 100 per cent over a 16-month period after bouncing back from a slump in March last year as injected huge funds into the economy to mitigate risks from the disruption caused by the Covid-19 pandemic.

The BSEC chairman called on investors not to panic about the stock market. “The positive outcomes are emerging from the recent steps taken by the commission to protect the retail investors’ rights and regaining their confidence,” he said.

The DSEX increased to 7,356 points, a robust growth of 103 per cent from 3,604 points recorded in March 18, 2020. The index was the highest since its launch in January 2013.

The DSE daily average turnover crossed Tk 2,000 crore this year, which was only Tk300 crore a year ago.

As of September 9, the market capitalisation hit a fresh all-time high of Tk 5,86,319 crore, a rise of 67 per cent from Tk 3,50,800 crore seen on December 30, 2010.

The BSEC chairman was peaking at the webinar titled Role of Sustainable Finance and Fraud & Scam Prevention in protecting the interest of the Investors and Investors awareness” organised by the BSEC to mark the World Investor Week 2021.

The stock market regulator also inaugurated the World Investor Week 2021 during the event, which will be observed until October 12.

Financial Institution Division Secretary Sheikh Mohammad Salim Ullah and Adjunct Professor, School of Management, Asian Institute of Technology of Thailand Dr. Tanatat Puttasuwan were present at the event among others.