An audacious hope for our stock market

For the last two months you have not read any news on the fall of indices in our stock market. Neither have you seen any gloomy face of investors who have lost their hard-earned savings there.

It is because trading had remained suspended for the last two months. The coronavirus pandemic forced the authorities to shutter the market as well along with the country's economy.

As there was no trade, there was no cry. None of the investors lost a single penny. Thus, the pandemic seems to have appeared as a blessing in disguise for the investors!

But everything that has a beginning also has an end. So the shutdown that began two months ago came to an end today. As other government and private offices open, the trading in the stock market will also resume tomorrow.

However, by this time, everything – be it the country's economy or the people's lifestyle – has changed.

None of the businesses was spared from the merciless attack of the Covid-19 pandemic. One of the fastest growing economies in the world is now struggling to protect its growth from the pandemic fallout.

Just three months ago, we were eyeing an economic growth of 8.2 percent in the current fiscal year. But as the pandemic devastated the economy, the World Bank projected that our growth would hit the lowest level in decades. The growth may be 2 to 3 percent this year.

Changes took place in the stock market regulatory body, too. It has been restructured in the meantime with a new chairman and commissioners. They took over around two weeks ago. Keeping the market afloat and freeing it from any manipulation is now a litmus test for them in the time of pandemic.

But the major reasons behind the deteriorating health of our stock market remain unchanged. Reasons such as liquidity crisis, rising non-performing loans and scams in the banking sector and lack of quality shares in the market remain as problems as the piecemeal efforts taken by the government could not resolve those.

Yet, many eyes, particularly those who have investments in the market, will remain glued to the market to see how it performs on the first day amidst such a gloomy economic outlook and unprecedented health crisis.

The global stock markets are also now in a volatile condition in the recession ravaged economies. The indices are fluctuating due to the pandemic. The political unrest in Hong Kong, known as a global financial hub, adds fresh concerns for the markets.

On Friday, European markets retreated as escalating tensions between the US and China dampened the week's positive sentiment amid the reopening of economies across the continent. Asian markets also dipped for the same reason, according to a CNBC report.

Things are different in the USA. When its economy is facing recession, its stock indices are near all-time highs, at giddy valuations comparable to the 2000 dot-com bubble and 1929, says a Foreign Policy report published Friday. This appears to be curious to many.

Our stock market has also a puzzling record. Its performance was not consistent with the state of the country's economy in the last decade.

When the economy had been performing well registering an average growth of more than 6 percent, the market was still in a state of shock from the 2010 crash for almost the whole decade.

Can the market behave in a puzzling way again by shining in contrast to the gloomy economic outlook? If it can continue the puzzling behaviour, this may appear to be another curious case.

The Covid-19 pandemic is weird and mysterious. Its impact on the economy is mysterious too. We are yet to know the exact damage from it to our economy. And we don't know how long this pandemic will keep hurting the economy.

The present crisis, however, brings an opportunity for the market to emerge as an alternative source of capital for the businesses to add fuel to our growth engine. Businesses need capital for a fresh start. If the market can emerge as a funding source, this will reduce the burden of the ailing banking sector.

Stock markets in some of the largest Asian economies, including Japan, China and Singapore, have been contributing for decades to their robust growth.

If our market can perform like the others in the Asian economies, this will transform its image of being a poor contributor to growth.

This might sound as an audacious hope. Yet, let's wish the market good luck in this time of pandemic!