I conducted a survey on 2010 for my graduation research. A part of the survey was focused on investors’ role in corporate governance in Bangladesh. The investors are directly affected by the corporate governance. They also have responsibilities. Here I have described the survey findings.
Investors Attending AGM or EGM
It is surprising that only 14% of the respondents attended any AGM or EGM and only 2% ever voted for electing or removing directors. It indicates that most of the investors don’t have interest in performing their roles or responsibilities in corporate governance. Their only motive is earning money. They hardly care about the performance of the companies.
Participation in Initial Public Offerings
The respondents were assumed to be secondary market participant but 84% of them were found also active in primary market. Not only they use their own BO account for applying in Initial Public Offer (IPO) but also they operates multiple BO accounts in others names. On average every respondents have 3 BO accounts. That indicates that only 1.1 million of total 3.3 million BO account holders are real investors.
Participation in Speculation or Rumor
It is generally accepted belief that the stock market is fully speculative. Investors are used to deliberately participate in spreading rumors about price hike. But it is found that only 24% agree with the common concept. Other 76% stated that they do not disseminate rumors.
Most Profitable Basis of Trading
It is very optimistic that 56% of the respondents think fundamental analysis is most profitable among the common 3 choices. A significant portion, which is 15%, of investors are taking technical analysis as most profitable basis is also a good sign. Most of the traders in European or American markets rely on fundamental and technical analysis. So we can expect that investors will be more fundamental or technical oriented in future as market becomes matured. But the main impediment of this hope is 28% of the investors still believe that speculation or rumor based trading is most profitable basis of trading.
Still we can hope for the maturity of both market and investors as 99% of the respondents are interested in learning fundamental analysis. So the government, SEC and stock exchanges should come forward to tech fundamental analysis. At present both DSE and CSE have some training and awareness programs. Those programs should not be concentrated in Dhaka and Chittagong.