'Bangladesh blue chip stocks undervalued, offer investment opportunity'

Due to the depreciation of the Taka, foreign investors have been selling Bangladeshi equities and as they mostly deal with large-cap stocks having sound fundamentals, the blue-chip shares are suffering from oversupply in the bourses, said an asset manager Mohammad Emran Hasan.

As soon as the foreigners' selloff would end, blue-chip shares should turn around from the current depressed price level, believes Emran Hasan, the chief executive officer (CEO) of Shanta Asset Management Ltd – a new generation asset management firm managing over Tk200 crore capital market funds.

"Prices of many blue-chip stocks are depressed nowadays, despite the fact that the companies are growing in business," he was speaking at The Business Standard's capital market show TBS Money on Saturday.

Amid the high inflation, savers' wealth is at risk of gradual erosion as the fixed income investment tools are underperforming the real-life inflation and investing a portion of savings in the stock market can push one's wealth upward in the long term, he said.

"The stock market investments must be done with the right approach and in a disciplined and informed manner to avert the even bigger risk of losing too much," the asset manager said.

Starting small and keeping learning to prepare oneself for calculative risk-taking that has the potential to generate an enormous return over years, should be the approach that any saver can embrace, Emran said.

And those who are unlikely to invest time and effort to learn should go to reliable investment professionals for managing his/her money, instead of making mistakes that include herding, making investment decisions based on fear and greed, and repeating the same mistakes in the market, he said.

Universally, the stock market index is not always predictable, but the factors that drive the market higher or lower are traceable, he said, adding that except for the bubble periods, one can gradually build a position in fundamentally sound companies for wealth creation.

The asset manager advised not to sell off good stocks in short-term market declines and to take the opportunity of buying after sharp corrections.

The winning habit needs conquering one's fear and greed that comes through a continuous exercise as an investor, said Emran Hasan, adding that he believes that is why tomorrow is always the good time to begin in the stock market.

When too many people lacking expertise or qualification dare to keep advising on the market in social life, historically that tends to be a good time to cash in on market rallies, while the best time to buy good stocks is when people barely like to talk about the stock market, he cited from the lessons of Peter Lynch, a legendary Wall Street fund manager.

Bangladesh's stock market appears to be at neither point right now, he added.