57% stakeholders believe bourse's SME market is ineffective: Survey

The majority of respondents -- 57 per cent – of a survey have said that the SME market of the country’s stock exchanges is not effective while 31 per cent think that it is effective.

According to the survey conducted by LankaBangla Securities, a vast majority of respondents--72 per cent are not satisfied with the current state of the bond market while only 28 per cent have expressed satisfaction.

The leading brokerage firm conducted the survey titled ‘The Bangladesh Capital Market Sentiment Survey-2024’ on a total of 100 professionals from various backgrounds between December 13, 2023 and January 20 this year.

The survey respondents gave mixed reactions concerning the capital market scenario in 2023, with 37 per cent deeming the capital market's performance as "really bad," 29 per cent considering it "bad," and only 5 per cent finding it "very good."

Notable negative impacts included "fear of manipulation" with 78 per cent, "decreased investor confidence" with 66 per cent, and "floor price" 55 per cent.

Looking ahead of 2024, the primary risk identified by the majority is a lack of investor's confidence 51 per cent, followed by the continuation of floor price 46 per cent, and equally concerning are the lack of good stocks/stories and high interest rates, each at 43 per cent.

The survey said 57 per cent of the respondents believe that the SME market is not effective while 31 per cent think that it is effective and 12 per cent have expressed different opinions.

As many as 65 per cent of the survey respondents think that the establishment of the Alternative Trading Board (ATB) in Bangladesh had not boosted investors’ confidence significantly.

Besides, 52 per cent of respondents believe that the establishment of the Commodity Exchange will reduce the volatility of the food market.

It also said 88 per cent believe that the price discovery mechanism of the existing initial public offering (IPO) regulation needs revision.

Nearly half of the respondents categorically asked for more supportive policies by the central bank. Over 56 per cent believe that inflation would increase in 2024, while 50 per cent fear that local currency would depreciate further.

As many as 28 per cent of the survey respondents think that the improved transparency of financial reporting and other corporate disclosures as the most needed regulatory or industry action to improve investors’ trust and market integrity in 2024.

Regarding the most critical ethical issue facing the Bangladesh capital market in 2024, 64 per cent points to "market fraud/manipulation, the survey report says.

The majority of respondents (58 per cent) believe that the Bangladesh Securities and Exchange Commission (BSEC) still has capacity constraints as a regulator.

Additionally, 88 per cent attribute the generally low level of financial education among most traders, herd instinct, and poor certification requirements for trading eligibility as the main reasons for current market volatility.