Press Release

Retail investors asked to gain knowledge about stock market
CSE calls for implementing book-building process

Speakers at a seminar yesterday urged retail investors to acquire adequate knowledge about stock market before making any investment. If the investors take decisions based on rumours, they will lose money, the speakers told the seminar on 'Journalists' Role in Developing Stock market' organised by Chittagong Stock Exchange (CSE) in Dhaka today.

The speakers also urged journalists of the print and electronic media to present proper and correct information in reports about stock market. Addressing the function, CSE President MKM Mohiuddin said the investment in the stock market is risk-return oriented and it requires sources of transparent information, adequate training, up to date knowledge, analytical skills and investment techniques.

Mr. MKM Mohiuddin is addressing his remarks at the seminar organized for the print and electronic media at Dhaka on "Journalists Role in Developing Stock Market."

"As the journalist are writing reports on stock market and a large number of investors are fully dependent on their reports, their knowledge sharing with experts is necessary to uphold the quality of news on stock market," he said.
He also called for immediate steps for implementing book-building method, introducing derivatives products, declaring Sunday as weekly holiday and development of bond market to develop the country's stock market. He has reiterated its demand for implementation of the book-building process as early as possible to modernize the country's growing stock market. We must remain competitive in the global market and we have to ensure the development of our capital market through implementing the book-building system as early as possible.
The CSE president said the Securities and Exchange Commission (SEC) is working to finalize the rule on book building system in the country's stock market.
The book-building system is a method of selling equities when an investment firm seeks bids for a new issue at indicative prices. When the book is complete, it offers prices and sells the lot in a single day. Underwriters buy all the shares to be floated by public limited companies through competitive bidding procedure under the proposed system. Later the underwriters choose some brokers to put up those shares for selling to retail investors.
The issuers get their share prices from the underwriters who will be the highest bidder in
the bidding process.
Arif Khan, general manager of Industrial Development Leasing Company (IDLC) of Bangladesh Limited, said though investment in the stock market is risky, return from the stock market is very high. He said the media can also play the biggest role in developing the capital market through highlighting successful investors and their strategy in the local market.
Yaweer Sayeed, managing director and chief executive officer of AIMS of Bangladesh Ltd, said when the stock market witnesses a bullish trend, the newspersons go to the market stakeholders for comments. "But, I think the journalists should go to the issuer company for comments as to why market trend is bullish or bearish," he suggested.
The CSE president in his speech said offloading of government-owned shares of profitable companies, launching of derivative products, injection of pension funds into the stock market, development of bond market and establishment of a securities training institute will help the stock market grow further.

He said enthusiastic investors from all over the country are being interested to join the stock market through the concerted efforts of the CSE. "The CSE accounts for 7.0 per cent of total IPO market share in 2005. In 2006 it rose to 8.0 per cent and by the end of 2007 it will further grow to about 10 per cent," he disclosed.

”The country's stock market would see further development in the near future. "The market capitalization has already crossed $ 6.0 billion-mark and if companies like GrameenPhone go public, the market capitalization will be doubled," said Arif Khan of IDLC Ltd. He further said. “Country’s stock market recently got boost due to increased participation of foreign portfolio and non-resident Bangladeshi investors alongside local
Institutional investors.

CSE director Al Maruf Khan also spoke at the seminar moderated by its CEO AB Siddique. A good number of journalists from print and electronic media attended the seminar.

AKM Shahroze Alam
Deputy Manager