A functional capital market is required for Bangladesh to be able to sustain its graduation from the group of least developed countries (LDCs) by protecting both investments and investors, experts said.
The policymakers need to design appropriate strategies backed by necessary homework if the country wants to avoid the middle-income status trap and fully utilise the opportunities originating from the post-graduation status, they also said.
The recommendations were placed at a webinar titled "Investor Protection: Impact of Covid-19 on Business and Related Disclosures" organised by Bangladesh Securities and Exchange Commission (BSEC) on Monday.
As the keynote speaker, Professor Dr Mustafizur Rahman, fellow of the Centre for Policy Dialogue (CPD), said Bangladesh will face a lot of challenges when it will graduate from the LDCs.
Some sectors will face more competition, with the stock market being affected too, he said.
So, Bangladesh will need to mobilise significantly larger investments to address the challenges during the post-Covid period, he added.
Mustafizur said an adverse impact of Covid-19 has added new challenges to the economy, with the poverty rate growing from 20% to 35%, and 17% of the people turning unemployed afresh.
"For a stable stock market, we need to enhance the reliability of disclosures [about company information], streamline merchant banks' roles, make disclosures including price-sensitive information and critical buying practice publicly available mandatorily, and take measures to deal with investor complaints."
It also needs to open an investors' desk by listed companies, make the software of stock exchanges interactive and incentivise a greater use of the mobile platform by investors, he added.
Hussain Samad, consultant of World Bank, said a good atmosphere may come for foreign direct investment (FDI) to Bangladesh during the post-pandemic time. "We should focus on those [investor] countries that are less-affected by Covid-19."
"We also need to focus on several sectors including healthcare, pharmaceuticals, information and technology, and food and agriculture to draw more FDI."
In the post-Covid period, emphasis should be put on making skilled labour, Samad added.
Stock market expert Professor Abu Ahmed said multinational companies have to be listed with the capital market for the latter's stability.
"Some multinational companies are doing business in our country but they are not listed. However, they are publicly listed in neighbouring countries. They should be offered a tax waiver in the interest of our capital market," he added.
The current market indices may rise further but will not last long if the blue-chip companies do not come to the market, he opined, suggesting making good policy for mutual funds to increase investor confidence.
BSEC Chairman Professor Shibli Rubayat-Ul-Islam said they want to better the capital market. "If good governance prevails in the market, the blue-chip and well-governed companies will come to it."
At the webinar, Dhaka University Professor Dr Mijanur Rahman evoked different issues regarding investors' protections while BSEC Director Mohammed Jahangir Alam moderated the programme. BSEC commissioners also took part at the webinar.