Suggestions to Improve the activities of Stock Market
Problems of Stock Markets
The 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
It has been observed that the share values of some profitable companies has been increased fictitiously some items that hampers the smooth operation of Stock market.
Delays in Settlement:
Financing procedures and delivery of securities sometimes take an unusual long time for which the money is blocked from nothing.
I 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 look for their own interest using their internal information of share market.
Improper financial statement:
Many companies do not focus real position of the company as some audit firms involve incorruption while preparing financial statements. As a result the shareholders as well as investors do not have any idea about 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
Suggestions to improve the activities of Stock Market
- To introduce automated monitoring system that may control price manipulation, and inside trading.
- To introduce full 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 kerb market form premises of 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 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.