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Financial Market

Suggestions to Improve The Activities of Stock Market

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Suggestions to Improve The Activities of Stock MarketThe unexpected rise and fall in share prices mostly followed from the general confidence of the investors about political stability, euphoria of investment in shares, prospect of quick capital gains, a vacuum in respect of institutional presence in the share market, monopolistic dominance of member brokers, inefficiency of the SECS to cape with the developments, existence to Ker market , absence of proper application of circuit breaker etc.

Suggestions to Improve The Activities of Stock Market

Problems in The Stock Market

Price Manipulation

It has been observed that the share values of some profitable companies have been increased fictitiously some items that hamper the smooth operation of the Stock market.

Delays in Settlement

Financing procedures and delivery of securities sometimes take an unusually long time for which the money is blocked from nothing.

Regulations in Dividends

Some companies do not hold Annual General Meeting(AGM) and eventually declare dividends that confused the shareholders about the financial positions of the company

Selection of Membership

Some members being the directors of listed companies of DSE, CSE looks for their own interest using their internal information of the share market.

Improper Financial Statement

Many companies do not focus on the real position of the company as some audit firms involved in corruption while preparing financial statements. As a result, the shareholders, as well as investors, do not have any idea about the position of that company

OTHER technical problems and political infighting. current market prices of the securities. aeries estimated without considering the securities market. -financial institutions involved in the lack of proper policy framework that provides incentives and protection to investors

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Suggestions to improve the activities of the Stock Market.

  • To introduce an automated monitoring system that may control price manipulation, and inside trading.
  • To introduce a fully computerized system for settlement of transactions.
  • To force the listed companies to publish their annual reports with actual and proper information that can ensure the interests of investors.
  • To control and abolish the kerb market form premises of the stock market.
  • To take remedial action against the issues of fake certificates.
  • The composite Quotation system ( CQS ) should be introduced and implemented that available the exchange specialist bid-ask quotes to the subscribers.
  • To make arrangement to set-up merchant banks, investment banks and flotation of more mutual funds particularly in the private sectors.
  • Banks, insurance companies and other financial institution should be encouraged to deal in share business directly.
  • The brokers should not be allowed to deal in the Scripps on their own accounts.
  • The management of stock market should be vested with professionals and should not in any way be linked with the ownership of stock exchange and other firms.

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Mohammed Ahaduzzaman
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