|Published : 26 Nov 2016, 21:34:51|
Delay in dissemination of stock-related information
That all the changes---some tend to describe the same as reforms-brought about following the 2010 stock bubble burst have failed to bring about a turnaround of the country's capital market, is evident from the current level of average daily turnover and stock price movements. The findings of a team of researchers at the Bangladesh Bank (BB) have also confirmed this fact. But what the BB researchers have done is that they have attempted at unearthing the underlying causes of the market's failure to respond to measures taken by the government and securities regulator to buoy up a dull and drab stock market during the last six years.
The BB researchers have listed one major factor behind the market continuing in the old orbit. Old information, according to them, still exerts a lot of influence on current movements of stock prices, primarily because of the gap in disseminating the latest price-sensitive information to the market players, including general investors. The researchers attributed this delay in disseminating information to the absence of market efficiency. This, according to them, enables a section of market players to predict the future value of equities and resort to manipulative activities to reap abnormal profit.
There is no denying that the government and relevant others have employed quite a number of measures with the objective of infusing dynamism in the bourses, marked by substantial participation of investors. But those have not clicked and the movement of the indices has been more like that of the proverbial monkey scaling an oil-treated bamboo pole. General investors are yet to get their confidence fully restored in the market, notwithstanding the fact that the market deserves a greater response from them than what is now witnessed. It could be that the investors are not aware of the current intrinsic value of the market as the relevant information is not disseminated duly, deliberately or otherwise.
The Bangladesh stock market, in line with other areas of national economy, has lots of deficiencies, including a few that are very difficult to understand or notice on the part of laymen. The vested quarters have allowed such deficiencies to thrive, for those leave scope for them to carry on with their manipulative activities and gain undue financial benefits in large volumes. The deficiencies mentioned by the BB researchers, it is assumed, have escaped the notice of the securities regulator. But the delay in the dissemination or deliberate holding back of price-sensitive information by any of the market players to deprive the general investors of their due gains, is an offence.
It is suspected such an offence is being committed because of the lack of market efficiency. However, the responsibility of making the market efficient and manipulation-free is vested, primarily, in the bourses, securities regulator and listed companies, among others. Hopefully, all concerned, including the Bangladesh Securities and Exchange Commission (BSEC), would ensure proper and timely dissemination of stock-related information so that investors can make their proper choice and cash in their due gains.