Stock investors and analysts are hoping for the Bangladesh Securities and Exchange Commission (BSEC), led by its new Chairman Khondoker Rashed Maqsood, to focus on its prime tasks of proper monitoring and ensuring good governance in the share market.

These duties were neglected over the past 15 years or so, for which the regulator now has to lay emphasis on protecting investors by ending price manipulation and ensuring that all intermediaries play their due roles, they said.

These require, among others, changes to the current book building method, which seeks bids from institutional investors to determine the price at which to sell shares in initial public offerings (IPOs).

The method stipulates that the bidders use very conservative calculations, for which the prices are failing to be lucrative enough to pique the interests of companies with good performance records to get listed in the first place.

The commission also does not need to worry about the index as it will automatically turn vibrant if it fulfils its basic tasks, according to the stock investors and analysts.

The past chairmen of the commission were fixated on getting the index to rise, for which the market was sometimes not allowed to run its course due to repeated intervention, they said.

In the process, the regulator had imposed floor prices, directed brokers and asset managers to invest and even turned a blind eye to price manipulations.

This ultimately prompted institutional and foreign investors to withdraw to the sidelines and the market subsequently became a haven for manipulators, they added.

By standard and definition, this cannot be a good stock market as it only has 80 to 90 investable stocks at best, said Saiful Islam, president of DSE Brokers Association.

Besides, considering the size of the economy, the stock market is small and plagued with manipulation. If changes do not come about, high-net-worth individuals and foreign investors will never be interested to get involved in the market.

The regulator can sit with market intermediaries to identify problems in drawing in good companies, which will be able to create reasonable yields. If merchant banks can bring good stocks, investors will come on their own, he added.

Islam, also a director of BRAC EPL Stock Brokerage, further said there should be easy "entry and exit" regulations for the companies.

There are many listed companies that are being traded at the stock exchanges, but their factories are not in operation.

"So, in a way, this [the stock market] is a casino," he lamented.

The regulator should delist them forcefully, Islam said, adding that there is no logic for allowing these types of stocks to remain in the market.

If the stock market index remains low even after the BSEC enhances good governance, institutional investors will still be happy to invest, he added.

Asif Khan, president of the CFA Society Bangladesh, thanked the new commission for undertaking an investigation into allegations of the involvement of its officials in corruption and price manipulation.

This will help prevent the recurrence of such malpractices and the BSEC from deviating from its primary objectives, he said.

Khan also said the BSEC should not take on the role of stock exchanges and brokers to bring investors to the market, rather it should ensure that the latter abide by rules and regulations in getting good companies listed through IPOs.

To bring in good companies, the BSEC should revise the book building method. If good companies cannot get good prices in IPOs, they will not come to the market, Khan added.

Khan informed that the conservative calculation method was introduced in 2021 to prevent IPOs from having inflated prices, but it also hurt investors.

The regulator should ensure that floor prices are never imposed as it spoils the market's natural flow, he said.

If investors get any hint that this system will be imposed again, they will not invest in the market, added Khan, who is also chairman of EDGE AMC Limited.