Impact of Corporate Governance on Bangladesh Stock Market – Survey Findings

Acceptable Price to NAV Ratio for Selling

It is surprising that no significant portion of respondents have any strong standing on a question of acceptable Price/NAV ratio for selling consideration. The highest portion consists of 46% of respondents don’t have any idea in using NAV is determining the sell situation or finding over valued stocks.

Acceptable Price -NAV ratio for selling consideration

Basis of Investment Decisions

In practice there are mainly three types of analysis procedure for forecasting future price of any equity. Those are, Fundamental analysis, Technical analysis and speculation or rumor based analysis.
It is surprising that there are only 5% of respondents are solely dependent of fundamental and only 2% are solely dependent of technical analysis. At the same time, 12 % respondents are solely dependent of speculative or rumor based trading. Other 81% of respondent have a mixed analysis procedure. It is good to have 36% respondents depends on both fundamental and technical analysis as a mixed analysis procedure. So, it is evident that peculation or rumor based trading is widely dispersed as a sole basis or element of mixed basis of equity price analysis.
33% of respondent solely depend on fundamental analysis for analyzing IPOs. There is no scope for technical analysis for analyzing any equity which has not yet traded in market. That’s why no person depends on technical analysis for analyzing IPOs. 8% of the investors solely depend on speculation or rumor and others have a mixed analyzing procedure consisting of fundamental and speculation or rumor based analysis.

Basis of analyzing secondary issue

 

Basis of analyzing primary issue

Emphasis on Fundamental Analysis

Though there is only 5% respondents solely depends on fundamental analysis, 7% trader stated that fundamental analysis is fully important to them relative to other analysis procedure. That means more 2% investors, who have mixed strategy, have found fundamental analysis same important as of other analysis. The mixed strategy traders give on average 51.10% emphasis on fundamental analysis. At the same time, most of the traders give 50% emphasis on fundamental analysis.
Though the bases of primary and secondary stock analysis are same, the emphasis on the fundamental analysis is different. Where the emphasis on fundamental analysis for secondary market is 51.10%, the same for primary market is 53%. That means the investors are more conscious on primary investment than that of secondary. But the mode values emphasis on fundamental analysis for both primary and secondary market are same, which is 50.

Emphasis on Fundamental analysis for stocks of secondary market

Summary

In most of the cases a significant portion of the respondent didn’t have any idea on the impact of corporate governance. That indicates lack of awareness among investors.

Kalpataru Biswas

I am a Marketing Manager specialized on digital media. I am experienced in Content, Search & Social Media Marketing as well as Digital Advertising. I have worked for eCommerce and IoT products. Analysis is the backbone of planning and executing. I am expert in Google Analytics, SQL, Access and Excel for making data driven decision.

Leave a Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.