LANGUAGE IN INDIA

Strength for Today and Bright Hope for Tomorrow

Volume 16:12 December 2016
ISSN 1930-2940

Managing Editor: M. S. Thirumalai, Ph.D.
Editors: B. Mallikarjun, Ph.D.
         Sam Mohanlal, Ph.D.
         B. A. Sharada, Ph.D.
         A. R. Fatihi, Ph.D.
         Lakhan Gusain, Ph.D.
         Jennifer Marie Bayer, Ph.D.
         G. Baskaran, Ph.D.
         L. Ramamoorthy, Ph.D.
         C. Subburaman, Ph.D. (Economics)
         N. Nadaraja Pillai, Ph.D.
         Renuga Devi, Ph.D.
         Soibam Rebika Devi, M.Sc., Ph.D.
Assistant Managing Editor: Swarna Thirumalai, M.A.

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M. S. Thirumalai

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Present Situation of Capital Market and the Role of Brokerage
House: A Study on IDLC Securities Limited

Md. Sharif Hossain

Abstract

The capital market plays various roles for strengthening the economy of a country. It acts as an intermediary between surplus units and deficit units of the economy and facilitates savings into investments. Also providing liquidity of these investments, the capital market ensures optimum allocation of resources. All these activities make it the engine for the growth of the economy.

When asked about their expectation about GDP growth of Bangladesh in fiscal year 2012-2013, 69% of the participants believe that growth stays roughly same and 80% said local political instability is the biggest risk to Bangladesh economy in 2013. Majority answered that central bank will keep the monetary policy tools at current level but liquidity situation will improved in 2013 relative to that of 2012. When asked to identify the reason for bearish capital market in 2012, 47% attributed the reason to lack of investors trust and poor corporate governance of listed companies. Also highest 49% participants caution the local political instability is the biggest risk to local capital market in 2013 followed by the lack of confidence of investors. Despite that, 53% and 43% survey participants respectively show their optimism that market will remain moderately bullish or remain at current level. And the expectation about average market turnover is to hover around BDT 4000 to 5000 million (41% responses). When asked why big business conglomerates are not interested to raise funds from primary market, almost half of the participants believe that fear of sharing the true financials with public is the reason. A majority of those surveyed (57%) also attributes the lack of corporate governance of listed companies is the main reason of poor foreign portfolio investment in capital market. But in 2013, overwhelming (86%) consensus is that demutualization of stock exchanges will bring more transparency and increase confidence of investors. Survey participants are bullish for equity in 2013 and 43% has said that equity will outperform other asset classes. Real estate and saving instruments received both 18% answers respectively. 51% respondent said that their expectation about employment opportunities for professional in financial market remains about the same like 2012 and 41% is optimistic about relative improvement of employment situation.

Keywords: GDP, Growth, Demutualization of stock exchange, Corporate Governance.

Introduction

Development of a country is highly depend on the development of capital market, has been receiving heightened attention from the policy-makers in recent years. One explanation lies in the fundamental shift of development strategy reflected in the nearly universal embrace of the private sector as an engine of economic growth. The governments in both developed and developing countries, the international financial institutions which exert tremendous influence on the policy-making apparatus of developing countries and, to a great extent, the intelligentsia have all joined together as ardent advocates of private entrepreneurship. Capital market can play an important role in accelerating economic development through efficient intermediation of savings into productive investments and in fostering the growth of public, private entrepreneurship.

This is only the beginning part of the article. PLEASE CLICK HERE TO READ THE ENTIRE ARTICLE IN PRINTER-FRIENDLY VERSION.

Md. Sharif Hossain
Department of Commerce
Goa University
PO box 403206
Goa
India
sharif_13@yahoo.com
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