Analysts on Thursday laid emphasis on strict evaluation of the financial reports of the companies by a third-party to shield the financial market from vulnerabilities.
They suggested the government assign the Bangladesh Securities and Exchange Commission (BSEC), Dhaka and Chittagong stocks exchanges or the Financial Reporting Council, FRC, to assess the financial health of the companies.
The alleged irregularities in financial reporting by many companies, especially listed firms, create room for the capital market manipulation, they said.
The views came on the concluding day of the annual banking conference in Dhaka, organised by the Bangladesh Institute of Bank Management, or BIBM.
Economist Dr Ahsan H Mansur, Centre for Policy Dialogue (CPD) research director Dr Khondakar Golam Moazzem, professor Sarwar Uddin Ahmed of Independent University of Bangladesh, BIBM professor Prashanta Kumar Banerjee and professor Md Nehal Ahmed spoke on the "Macro-financial environment".
Dr Moazzem said, "Allegations of irregularities are there in preparing financial reports of many companies and banks and dividend declaration."
There should be authenticity in financial reports to check the vulnerability in the financial market, he added.
Since investors do not trust the financial reports, they do not go for investing in the stock market, he noted.
Financial reports of the companies should be scrutinised and evaluated by third parties like FRC or BSEC or bourses, e said.
Executive director of the Policy Research Institute of Bangladesh (PRI) Dr Ahsan H. Mansur said Bangladesh's capital market is a dividend-driven, which provides scope for manipulation and irregularities.
He said some market players take the opportunities of possible dividend declaration by listed companies and spread rumours for manipulating the capital market.
For example, global technology giant Google has not declared dividend for many years but investors have kept faith in the company, Dr Mansur said.
"We've to establish trust among the investors about the listed companies and their financial health for attracting investments," the PRI executive head said.
Dr Mansur blamed poor governance for the rising non-performing loans in the banking sector.
He said since deposit growth is still satisfactory in commercial banks, the soured loans have yet to create big problem for the financial sector.
But this has created a vulnerable financial market, which is also an obstacle to sustainable economic growth of the country, Dr Mansur said.
BIBM professor Dr Prashanta Kumar Banerjee said Bangladesh should turn to the bond and equity markets for raising long-term financing.
The governance in the financial sector, proper company reporting and strict monitoring are imperative to establishing a better macro-financial environment, he added.
About the demographic dividend, Dr Mansur said he is not much optimistic about it as policy-makers are busy otherwise rather than working on reaping the benefits from it.
Dr Moazzem said the labour force has no adequate education and training, which holds the country back from garnering such a dividend.
"In Bangladesh, the less-educated and less-skilled people find jobs. But many higher educated people remain unemployed. The job market now looks like a pyramid structure," he added.