The lure of money

Money can be a source of worry for both rich and poor. For the rich, how to make it perform better. For the poor, how to balance the books. For those in between, it is even worse. These are people with a bit of savings, not knowing which way to go. Banks, the good ones, are supposedly safer. But the return is lower than the rate of inflation. Share market is an alternative option. It is an amazing place where people are known to have made fortunes and also lost them. To the majority of us, it is a place shrouded in mystery, not knowing how it behaves. Investment requires some knowledge besides a good amount of money. This is because an investment requires spreading out the risk between alternative options of risk against safe returns. Risk is an ingredient element of the share market. Like the saying goes, 'if there is no risk, there is no gain'.

The stock market in the country has a chequered history with two crashes that wiped out billions through market scams. The small investors went broke. The market today is almost dead, showing little movement in any direction, up or down. No share shines in terms of long term value. This contrasts sharply with the world outside, where most markets are up in spite of the current geopolitical tension. The Dow Jones hovers near the fifty thousand mark, up from a thousand in the eighties. Many shares of those days have made people rich and they are still active in the market. In contrast, the market index in the country is flat in spite of respectable economic growth of the country per annum. Reasons are many including the failure of leading companies in creating trust among investors orinability of the regulator to better control the market.

An investment in a share market without some knowledge is not different from picking a number in a game of roulette. Knowledge is essential but not a sufficient factor to predict its future behaviour. And then there are rumours that are spread at times by interested parties. In this context I remember an amusing experience at a casino in Nepal. I visited the casino along with a group who were in the country on a business trip. That was our last night in the country. Each of us had some money left that we did not want to take back home. We decided to bet the entire amount, individually, on the roulette wheel. One among us was a lucky winner. He prolonged his stay while the rest of us left as per earlier plan. 

Looking at the economy as a whole, the country has done well in areas from agriculture to exports. Attaining almost self-sufficiency in staples is no mean achievement considering the population has more than doubled since when we became an independent nation. The manpower export has done very well considering this was almost non-existent in pre-independence days. This is beside the garments that rose from nowhere. But the road ahead is murky as we target the next stage of economic development in becoming a so-called developed country. This requires better value addition. In agriculture it is productivity, in man-power export it is skill and better communication, in garments it is rising up from lower end of market segment. Our entrepreneurs have to do better. The world today is ablaze with fast changes as products get elevated and services are redefined. This is how Samsung rose from an economy that was not different from us in the seventies when we were born. It is said that change is the new norm of business. What is good today gets obsolete in no time. This is how Keya soap lost market lustre in spite of being a good brand at one time. This contrasts sharply against Limca that has stayed put in spite of much external aggression. Change is both an opportunity and a killer depending on how it is handled. It is a popular topic of research in business schools but has not been able to climb down to the shop floor where it matters. We do not yet have a business that stands out in terms of these requirements. On the other side of our border, Tata has done it in untested markets. The imperfection of an internal market does not help either. Social awareness is essential to correct the situation even if uncomfortable at an initial stage. Our stock market is a mirror image of this imperfection. The behaviour of companies operating under the veil is contrary to good governance. It is said the charity begins at home. Attention to the internal market is one such requirement. To begin with it will minimize trips abroad for shopping that is a drain on the economy. This will also be a step in brand building to the extent of Bangladesh Made becoming a marketing tag line.

chowdhury.igc@gmail.com