The SME platform at the Dhaka Stock Exchange (DSE) has so far been unable to attract investors in terms of share trading of its listed firms. Five firms on the platform are trading their shares below face value.
The DSE inaugurated the SME platform with six companies on 30 September this year.
The Chittagong Stock Exchange (CSE) unit of the platform was inaugurated on 10 June with one company- Nialco Alloys Limited.
The platform was formed in 2019 to attract businesses with small capital bases to the stock market.
Later, the Bangladesh Stock Exchange Commission (BSEC) took several initiatives to attract investors in the platform, including listing a few companies under the board.
With a view to make the board active, the commission took through the listing of some companies on the board.
Market insiders expects, trading at the platform will increase only after investors take it as a good opportunity.
But, entrepreneurs think that the board is not vibrant now because of lack of proper information. Investors do not know the businesses, accounts, products' future, and management properly.
Many investors are not interested to invest here as the blue-chip stocks are available in the main market.
Professor Abu Ahmed, a capital market analyst, said there is no reason an eligible investor will invest in the SME platform as it does not have a good listing of companies.
Moreover, the platform is not functional in the stock exchange. Some companies, that have been listed, fail to comply in an initial public offering (IPO), he added.
He said the regulator imposed restrictions for general investors regarding trading that reduce the trading volume of the board.
Companies with good products must be listed on the board and the registration process should be omitted to get more participants, he recommended.
Mohammad Rezaul Karim, executive director of Bangladesh Securities and Exchange Commission (BSEC) said, "Eligible investors may feel the registration process to be boring before they can apply for primary shares. However, there is no registration for the secondary market."
Awareness needs to be increased among the eligible investors about SME platforms through financial literacy, he added.
Besides, the liquidity and transaction of SME platforms may increase if more companies are listed, he further said.
Share price of Master feed Agrotec Ltd, a company that manufactures and markets animal feeds, rose to Tk20.60 after listing on the board. But the company's share was trading at Tk9.10 on Thursday.
Krishibid Feed raised Tk22 crore from the capital market through a qualified investor offer. But the share price of the company remains between Tk8.1- to Tk10.20.
Besides, Oryza Agro Industries, Apex Weaving & Finishing Mills, Himadri are trading below face value.
Sources said more than 1200 eligible investors are registered in DSE Electronic Subscription System.
In November 2018, the BSEC gave final approval to the Qualified Investor Offer by Small Capital Companies Rules-2018 with some amendments.