6.52% of New Firms Shut Down in 15 Years, but 21.74% Fail to Pay Dividends
One of the main issues with the Bangladeshi stock market is that everyone is a fool. By making unfounded claims without any supporting evidence, they hope to become somewhat popular. University instructors are among those on this list who have extensive experience with the stock market. Even the directors of the main watchdog, the Stock Exchange, speak in the dark.
Investors have frequently heard these claims from uninformed market gurus about the numerous fraudulent companies that have entered the stock market in the past 15 years, 80–90% of which are phony and more than half of which have no assets. Every one of them was created on their own. which was not at all like the real world. Such details were discovered after an examination by Money Trade.
The Chief Executive Officer (CEO) of a merchant bank informed Money Trade that the stock market in Bangladesh is filled with negative news. They disseminate negative information as extensively as possible. The most disheartening aspect is that they propagate false negative news without any factual basis. I have also observed a university lecturer who consistently shared misleading information on talk shows and Facebook without any evidence. Nevertheless, his portfolio consisted of a collection of worthless shares.
He mentioned that among the companies that entered the stock market over the past 15 years, United Airways, Emerald Oil, Tung Hai Knitting, Regent Textile, Khulna Printing, and Noorani Dyeing have ceased operations, yet these so-called intellectuals have continuously claimed that more than half have vanished. When did these intellectuals actually examine the data?
It has been noted that in the last 15 years (2010-2024), 138 companies have been listed on the stock market. Of these, 84.78% are fully operational. Additionally, 7.97% are partially active. Furthermore, 78.26% of those 138 companies distributed dividends to shareholders in the most recent business year of 2023-24.
However, of the 138 companies that entered the stock market in the past 15 years, only 6.52% have closed. Additionally, 21.74% of businesses do not pay dividends.
Even at that time, market analysts who lacked statistics blamed the high number of closed companies on the Bangladesh Securities and Exchange Commission (BSEC). By speaking adversely, these experts have consistently put the stock market at a disadvantage.
According to a different merchant banker who spoke to Money Trade, IPOs in Bangladesh are far worse than those in India. On the first day of share trading, many of them fall below the issue price. Companies are delisted on a regular basis. This is a rather common occurrence. Not every business will endure and turn a profit. Not all companies will become square pharma.
