Chittagong Stock Exchange (CSE), the 2nd dynamic bourse of the country has arranged a training program on “Comprehensive Equity Research” today at its premises in Dhaka for the Authorized Representatives, investors and different professions in Chittagong. A total of 30 participants from 20 broker offices attended the training.
Mr. G Faruque, Acting MD of CSE while speaking his speech in the training said that many market leaders in different sectors are not listed. More efforts should be exerted so that these companies find strong incentives to get listed in the stock market. A raise in tax rate for the non-listed companies should be strongly considered. After the initial shock of bursting the bubble in 2010, the companies with strong fundamentals did just fine and not too many companies are trading cheap. Unless the quality of the listings significantly increases, the bull can at best limp in our stock market.
Mr. AKM Shahroze Alam, Head of Training and Awareness Department said that CSE from its inception has given utmost importance to educate the investors, stock brokers’ officials for the greater interest of Bangladesh Stock Market development. He said that CSE will arrange in 2016 series of training and awareness program across the country to tap its potential. Our responsibility is to educate the investors and ultimately investor has to utilize their analytical skill while investing. He requested participants to trade in CSE and use its state of the art trading engine. We have very powerful matching engine capable of handling 2500 orders/second and 1,00,000 orders/day. The system is highly scalable and can scale up to even higher order and contract rates.
Mr. Alam said that, we must focus on the ailing mutual fund industry. Asset Management Companies (AMCs) are of paramount importance for the health of a stock market. The stock market is complex and an average person will find it difficult to analyse and forecast the future of companies he or she wants to invest in. It makes a lot of sense for an average person to invest in the stock market through a professional fund manager. Even it makes sense for many of the corporates and institutions to invest mainly through mutual funds as most do not have the skill required to professionally manage a portfolio. For example, in India, almost 50 per cent of Asset Under Management (AUM) of mutual funds are invested by banks/FIs and corporates. In countries like Brazil and South Africa, AUM of mutual funds as a percentage of GDP is around 40 per cent and 33 per cent respectively whereas in Bangladesh, the current AUM of mutual funds (both closed end and open end) is well below 1 per cent. Strong presence of AMCs can bring a lot of stability in the market as these professional fund managers are more likely to be driven by rationality and company fundamentals.
Mr. Qazi Musaddeq Ahmad, Investment Analyst, Brummer & Partners Asset Management (Bangladesh) Ltd and a speaker of the training said that experienced professionals working in the capital market can help relate theory with practice with clear and precise examples. They can also clear up any myths regarding investing that are prevalent in the market. The three trainers between them have total experience of close to 20 years.
Another speaker Mr. Shaikh Malik AL – Razi, head of Research of IDLC Investments Limited (IDLCIL) while saying on his topics said that Fundamental Analysis develops expectations about stock prices’ future direction based on rigorous analysis of historical facts and careful construction of assumptions of future performance. This has been considered the starting point and cornerstone of investment analysis for over centuries across all markets in developed and developing countries alike. An understanding of Fundamental Analysis would enable investors to formulate their portfolio on a solid footing.
Mr. Md. Mahfuzur Rahman, Head of Research of LankaBangla Securities Ltd (LBSL), the last speaker of the session said that Bangladesh stock market is quite inefficient and retail investor driven. Most of the investors frequently lose their money due to inadequate knowledge about equity investment. Basic knowledge on equity research will equip them with the understanding of pros and cons in their investment decision making, rather than being associated with speculation.
At the daylong training program the participants have gained knowledge on Quantitative & Qualitative Analysis, Top-Down & Bottom-Up Approach, Economic Analysis, Industry Analysis, Porter’s five forces model, Company Analysis- How companies create value, Financial statement analysis – Top line growth, margin expansion, leverage, working capital management, Operating/Non-Operating Income, Return on Capital vs. Cost of Capital, What is the price of anything?, Does fundamental analysis really work?, 3 types of valuation, Cash flow/Income based, Relative valuation, Asset based, Global commodity price trend -our benefit and cost, Global economy trend and our affiliation, Capital market trend and recent developments, Sector analysis: Opportunities and risk of investment in following sectors, Bank,Non-Bank financial institutions, Pharmaceuticals,Telecom,,FMCG, Cement, Construction materials, Power generation, Power distribution, Fuel distribution, Gas distribution, Textile. Same training will also be organized by the bourse in Sylhet on 5th March at its conference room. Interested participants can complete online registration to CSE website at www.cse.com.bd.