The year 2013 held promises aplenty for the capital market, but the lingering political

turmoil hacked most of it down.

It, however, managed to buck the downward trend of the past two years, to end in the
black !"#$, the key inde% of the !haka "tock #%change, yesterday closed off the year with
&,2'' points, meaning a gain of &.3 percent in the course of the year.
The gain would have been more had there been no political turmoil, which sent investors
into a conservative mode.
(verage daily trade stood at Tk &00 crore in 2013, down ) percent from the previous year.
*If the political turmoil continues for a longer time, businesses will be affected + their
profits will decline and so will their ability to disburse dividends. This will definitely erode
investors, confidence,- said .aru/ (hmad "iddi/i, a market e%pert and a former chairman
of the 0angladesh "ecurities and #%change 1ommission 20"#13.
The primary market would also take a hit, as companies will not come to raise capital, he
said. *I see a gloomy year on the hori4on if there is no /uick solution to the political
issues.-
5h (sadul Islam 6ipon, managing director of 1ity 0rokerage, said the !"# saw its market
capitalisation increase 11 percent in 2013, spearheaded by a general increase in initial
public offerings 2I78s3. The total market capitalisation is Tk 2'&,99: crore which is 2).)1
percent of the gross domestic product.
*This growth would have been much, much more in volume if there had been some
stability on the political front.-
;eanwhile, there were many /ualitative changes as well, the most notable of which was
the demutualisation of the !haka and 1hittagong stock e%changes to bring more
transparency and accountability to the market following 2011,s market crash.
7reviously, the twin bourses were collectively owned and run by brokers< demutualisation
transformed them from their non=profit, co=operative state into profit=oriented entities.
The stockmarket regulator also enacted five new rules and a guideline for research analysis
and private placement of debt securities. It also modified two other rules the mutual fund
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rules to regulate the market and the corporate governance guidelines.
(lso of note was the fact that there was no intervention to daily trading, which was
fre/uent in previous years.
The 0"#1,s endeavour to bring in the /ualitative changes helped it achieve a higher
regulatory status from the International 8rganisation of "ecurities 1ommissions 2I8"183,
the association of national securities regulatory agencies. It has been upgraded to an
(=category regulatory agency this month, which ensures the regulator,s access to
international cooperation on securities markets worldwide.
*De have received the international recognition because of our efforts in maintaining
global standards,- said (rif 5han, a member of the 0"#1, adding that the status upgrade
will attract more foreign investors to 0angladesh,s securities market.
The surveillance and development of the market, however, will not stop. *It is a continuous
process and we will maintain it in the coming years too so that the investors get back their
confidence in the market,- 5han added.
#choing him, 6ipon said new collective regulations and reforms from the prime regulatory
bodies including the 0"#1 and the central bank helped develop accountability, transparency
and book /uality of financial institutions in the country.
*This articulates similar scenarios that had been implied by the regulatory organs in
developed economies such as the .ederal 6eserve of the E", #uropean 1entral 0ank of the
#E and 0ank of Fapan after the global financial crisis in 200G=0:.-
6ipon e%pects the effects of the reforms to be visible in 201& by way of substantial growth
in margins and e%tensive cleansing of the financial institutions, asset books. *De believe we
will witness a considerable upside in the value of the financial sector companies.-
*Transparency, accountability and stability have revitalised the confidence level of investors
in the market. (s a whole, we believe we will witness a new dimension of investment
environment in 201&,- he added.
;d (shadu4aman 6iadh, head of research of >anka0angla "ecurities, said the business and
consumer sentiments were very low in 2013, so was the sentiment of e/uity investors.
>anka0angla conducted a survey at the beginning of year, where &: percent of the
respondents e%pressed deep concern about local political instability and ranked it the
biggest risk to capital market in 2013.
*Eltimately, the concern has become true and has become the biggest systematic risk for
e/uity investors,- he said, adding that the chronic political instability has started to
severely hammer the bottom line of listed companies.
!uring the year, 1) new securities were listed on the !"#, which raised more than Tk
1,000 crore through initial public offerings. 8f the new securities, 1& were e/uity stocks
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