Experts and economists have said an efficient stock market is essential to channel funds from the surplus units to the productive (deficit) units to enhance capital Investment In the country

They told UNB that the government is now set for liberalisation and privatisation, and an efficient capital market Is of paramount Importance In this process

The capital market Is now at its infant stage and public Issues of corporate units are limited although the very small securities market Is expanding at a considerable pace

In the Western market economies, exchange markets, the most important component of the capital market, plays an important role In raising the rate of savings and channelling that savings into the productive ventures.

In Bangladesh, economists said, the securities market presents a gloomy picture tn terms of low rate of Investment, low rate of return, poor quality and insufficient quantity of securities.

It is also related to low rate of turnover, inadequate disclosure mechanism of the companies. weak regulatory framework based on outdated laws and absence of appropri-

ate monitoring mechanism.

Chairman of Dhaka Stock Exchange (DSE) Khurshed Alam, however, said that country's money market is gaining momentum with foreign investment pouring in the share market. About fifty foreign investors are Interested in buying shares.

"For example, recently Issued shares of Eastern Insurance and Appex Knetting were oversubscribed five times and ten times more reaper lively in the primary market

Alam said foreign investors have already bought shares of Appex knitting showing Interest In investment. There Is much enthusiasm in capital market but there Is scarcity of the shares. "In fact, the market Is hungry of securities.'' he said

"We hope to bring investment of around one thousand crore taka within this year if the present favourable investment climate continues. If we cannot provide good security, the domestic investors will Invest in conspicious consumption and foreign investors will go to other countries

So the crying need of the time is to make available good securities in the market, said the DSE chairman

About the compptnu that

share market Is limited among few companies. Alam said. "Confidence is the key factor in share market. If people find confidence in other companies then the market will expand Let them come with more shares and build confidence '

Dhaka Stock Exchange sources said in last two months alone. 30 million US dollars were invested in the stock market mainly through Bexlmco. Bata and Apex shares. The money market also shows upward trend.

Prof Muzaffer Ahmed of the Institution of Business Administration (IBA) of Dhaka University said the supply of money is quite abundant. Takers of money for investment are not visible In abun dance. Therefore the interest rate on deposits is too low

Some investors complained that lending rate of monetary intermediaries is still very high and the financial institu tions have been shy and not adventurer in advancing money to entrepreneurs.

The managers of financial institutions point out to the fact that large scale default was caused by liberal lending policy In the past and all the blame does not Ue with the managers as such.

The money market suffers

from a crisis of confidence on the part of investors as well Vs managers unless the crisis is resolved through appropriate changes in institutional, legal and behavioural aspects." Prof Muzaffer said

Some steps have been taken to amend the legal format and institutional environment under the prescription of the donors but the most potent aspect Is the behavioural nature of these functionaries have not been adequately addressed yet.

On the country* stock market. Prof Muzaffer said It Is too small either In terms of manufacturing GDP or non-agricultural GDP as the bus! ness houses are primarily small and family dominated.

DS Abu Ahrqed of the Economics Department of Dhaka University said money is not demanded at desired level resulting in an excess liquidity

exchange, he said, should also be reformed by offering fresh membership so that competitiveness and fair transaction can be maintained on the floor of the ex change

Now brokers themselves are also investors and the real investors face the chance of ap unfair treatment." he pointed out