The securities regulator should ensure the safety of investors' money while combating cooked-up financials for the long term development of the capital market, experts said.
They also said the authorities concerned should ready themselves for attracting foreign direct investment (FDI) and reduce inequality in the country.
The suggestions came on Monday at a webinar on 'Investor protection: Impact of COVID-19 on business and related disclosures.'
The Bangladesh Securities and Exchange Commission (BSEC) held the webinar as part of celebrating World Investor Week 2020.
Professor Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CDP), said the key challenge for the country's capital market is to attract domestic and foreign investments.
"Our market cap to GDP (Gross Domestic product) ratio will have to be raised to 40 per cent from the existing 12 per cent," Mr. Rahman said.
He said it is good to hear when the BSEC chairman says that rogue persons will not be allowed to deceive small investors.
"Inequality is a major problem in the development of the country's economy. Inequality will have to be thrown into dust bean to achieve the dream of Bangabandhu Sheikh Mujibur Rahman," he said.
Mr. Rahman also said so far the country's transformational journey has been good.
"Two upgrades such as the LDC graduation and achieving the middle-income country status have thrown out challenges before us and we must accelerate preparations to tackle the challenges," Mr. Rahman noted.
Hussain Samad, a consultant at the World Bank (WB), said the FDI must be enhanced to ensure the country's economic growth and employment at a desired level.
He said the share of FDI in the country's GDP is "very nominal" compared to the peer economies.
"The share of FDI in Bangladesh's economy is only 0.9 per cent or $ 2.9 billion. On the other hand, the share of FDI is 6.35 per cent in Vietnam against the global average of 4.0 per cent."
There is a huge scope for boosting FDI's share in the country's economy, Mr. Samad said.
He also said the ICT and agro processing can be good sectors to attract FDI.
Referring the report of the United Nations Conference on Trade and Development (UNCTAD), the WB's consultant said the global FDI may drop 40 per cent in the post-COVID-19 situation. "So, we must have necessary preparation for attracting FDI."
Prof. Mizanur Rahman, chairman of the Department of Marketing at Dhaka University, said apart from the pivotal role of the securities regulator, investors also have the responsibility for securing their investments.
"An integrated effort is a must to ensure the safety of investments," said Prof. Rahman.
He said share prices of many companies, which were previously listed with premiums went down below the face value within one year of listing.
"I hope the incumbent commission will remain cautious about the approval for the IPO proposals," said Mr. Rahman, adding that doctoring the companies' accounts must be contained.
He also laid importance on strong policy measures to restore investors' confidence in the mutual funds (MFs).
Prof. Abu Ahmed, a stock market expert, said previously, the capital market was not owned by the government.
"Now, the government not only owns the market, but also provides policy support. It's really praiseworthy," said Mr. Ahmed.
He said around 90 per cent of the companies having junk shares have gone public in the last 10 years.
"It's frustrating that the share prices of many companies which went public with premiums are now being traded below the face value," he said
Prof. Ahmed regretted many multinational companies, which are listed in other countries, are reluctant to offload shares in the stock market of Bangladesh. "The responsibility for luring them into the market lies with authorities concerned."
He said the securities regulator is also responsible for miserable situation of the mutual funds.
"Previously, tenures of listed mutual funds were extended without considering investors' interest. There should be a ranking of fund managers," Prof. Ahmed added.
In his speech, the BSEC chairman Prof. Shibli Rubayat Ul Islam said in many cases, responsible persons remain confined within the walls of responsibility.
"As a result, they are unable to meet the expectations of general people. But we don't want to follow them," Mr. Islam said.
He said apart from facilitating institutional investors in line with the existing rules, the securities regulator is working on protecting small investors.
"Negative perceptions about the capital market were created as the the market could not be diversified. So, the market should be diversified," said the BSEC boss.
He also said the securities regulator will hold Sukuk conference in Bahrain and Dubai as an attempt to present the capital market abroad.