Women's intelligence is disastrous: the Bengali adage is old, snugly fits with the conventional wisdom of patriarchal Bangladesh and is comforting to those who explain the gender gap in financial affairs. But the problem is that the country's small number of women investors is proving this conventional wisdom wrong.
And the true disaster the proverb faces is that women are now outperforming their male counterparts in the stock market.
Take the case of Afsana Pervin, a former private employee now a full-time capital market investor. "I usually do not make a loss…" says the woman who was born and raised in Motijheel of Dhaka -- an area adjacent to the Dhaka Stock Exchange.
Ms Pervin has been in the stock market since 2010. After gaining enough confidence to pursue what she calls "limitless possibilities" and spend more time with her family, she left her private firm in 2015.
Her preference in the market is A category shares and equities -- requiring analysis, insight and a strategy focused on long-term gains, rather than lottery-style speculative stocks.
"I earn much higher returns than any other instrument available in Bangladesh's financial market," a confident Ms Pervin told The Financial Express.
She now manages her investments and the stocks of her former colleagues as well.
Ms Pervin is one of the country's few hundred thousand female investors who outperform their male counterparts in terms of share selection and avoidance of poorly performing mutual funds and bonds.
They, roughly one-quarter of all beneficiary account (BO) holders, usually invest with long-term planning rather than frequent trading.
While there are no surveys on performance by women investors, officials attribute the following characteristics to better returns for women.
Women favour good shares
According to Ms Pervin, the share market could be a safe haven for female investors.
Her assertion might sound ridiculous, given that Bangladesh's nearly 70-year-old capital market with its Tk 3 trillion market capitalisation, often makes headlines for crashes and scams.
High volatility, weak governance and low confidence have been blamed for the poor performance of the market, which has about 500 listed securities, mostly equities.
Investors often lose money from their hard-earned savings and leave the market disillusioned.
"Since my school days, I used to hear men making stock investments based on rumours. That was the stupidest thing anyone could do with their money," said Ms Pervin. "You must understand the rules of the game and choose your investments carefully."
Possibly because women are more likely to "know the game carefully" and "choose the right match", their investment in A and B category shares combined is 84 per cent, according to the government regulatory agency, the Central Depository Bangladesh Ltd (CDBL).
Female investors had invested 73 per cent in 'A' category shares as of June 2023. Their male counterparts invested in this type of share 65 per cent less, according to the CDBL.
Only 3 per cent of women invested in Z category shares -- which do not pay dividends and do not hold annual general meetings. In contrast, more than 14 per cent of men invested in these junk shares.
The average investment size for women is Tk 0.57 million. They invested only 2.88 per cent in bonds, or 0.32 percentage points less than their male counterparts. Their investment in mutual funds was 1.44 per cent, or 0.47 percentage points lower than men.
Women are risk-averse
Numerous international studies suggest that women are risk-averse. This is reflected in women's investment decisions in the capital market, data shows.
The top five shares they invested in were Square Pharmaceuticals PLC, Walton Hi-Tech Industries PLC, Bangladesh Export Import Co. Limited, Kohinoor Chemical Co. (BD) Ltd and Bank Asia PLC as of June 30.
"I would say that women are more careful with investing their hard-earned money and savings and invest more prudently than men," said Ms Sangita Ahmed, managing partner of TimeOut restaurant.
"We do not like to take unnecessary risks and when women invest, they do their research more seriously," said Ms Ahmed, who is also a senior vice-president of the Bangladesh Women Chamber of Commerce and Industry.
Md Kamal Uddin, a professor and the chairman of the psychology department at Dhaka University, told the FE that women are generally risk-averse and seek investments with guaranteed returns.
Women don't see market as a shortcut to money-making
Female investors usually invest for the long term, said Moniza Choudhury, managing director of CWT Private Equity Limited who manages a group of 70 female investors.
Turbulence is currently battering the stock market due to higher bank interest rates and inflation.
She, however, said, "Those who trade with me have not withdrawn funds even under these circ*mstances."
"Certainly, no investor has suffered losses in the current market; rather, they have gained," she said.
Ms Chowdhury mentioned an interesting case of a female investor who holds a senior position at a bank.
"The CEO gave me Tk 30 million to invest in a 15-minute meeting."
Trusting her, the female executive wrote the cheque, saying, "You are a woman and I am too, so I know you can best protect my funds," the woman was quoted as saying.
Apart from being risk-conscious, women tend to be less aggressive investors than their male counterparts, according to market people.
"Women have idle funds. They want to maintain or grow their investments with positive returns," said Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), which represents 250 brokers in Dhaka.
They avoid riskier equities as they do not want to lose everything, said the DSE association chief.
M Shaifur Rahman Mazumdar, managing director and CEO of the Chittagong Stock Exchange (CSE), told the FE that female investors usually stay away from market rumours.
"It is true that they do not make investment decisions based on rumours or speculation but focus on fundamentals. I know some women investors who analyse company fundamentals and achieve good returns," the CSE CEO said.
Women trade less frequently
Another contrasting behaviour between men and women was trading frequency. Women investors traded on average almost half as often as men, according to the DSE.
"Once invested, women tend to monitor and tweak investments less than men," says Ms Moniza Chowdhury. "This has the double benefit of reducing transaction fees, which hurt performance and avoiding trying to time the market, which is almost impossible to do and can backfire."
Why do men trade so much? Psychology Professor Md Kamal Uddin attributed it to overconfidence.
Many neurologists believe that the male hormone testosterone causes three problems for investors: it decreases fear, increases greed and dangerously contributes to overconfidence.
Developed divisions have more female investors
Out of Bangladesh's eight divisions, most female investors come from Dhaka division, followed by Chattogram. There are currently 432,175 female beneficiary account holders (BOs).
Women in Dhaka invest nearly 65 per cent, followed by Chattogram at around 21 per cent, according to CDBL data.
Sylhet is third among the eight administrative divisions, with more than 19,000 BOs.
People in the four districts of eastern Bangladesh, who are comparatively wealthy due to remittances, contribute about 11 per cent, with many living in London.
Mymensingh division has only 1,870 BO accounts, placing it last among the eight divisions.
Of the total market capitalisation, women own Tk 250.62 billion, while men own Tk 1.58 trillion, totalling Tk 2.99 trillion excluding government treasury bonds.
There are more BOs under company, foreign, and joint accounts. CDBL only maintains demat (dematerialisation) accounts, not other types of accounts.
Where women should invest
The main source of women's funds comes from jobs in almost all sectors of the country's $459 billion economy, estimated for fiscal year 2024. They also inherit assets from parents or husbands and many female entrepreneurs have thrived due to the social media boom.
But, they tend to prioritise cash savings, either in government savings certificates or fixed deposit receipts.
According to the Bangladesh Bureau of Statistics, more than 34 per cent of the total labour force is female, meaning there are a large number of working women in Bangladesh.
In the banking industry alone, more than 16 per cent of employees are women, mostly in white-collar jobs, including many senior positions.
"Women have to earn their own capital through businesses, employment or savings from household expenses," said Ms Sangita Ahmed, managing partner of TimeOut restaurant.
Ms Ahmed said that as women have advanced, their financial habits have evolved from storing money in purses to depositing it in banks through fixed deposits and small savings schemes.
"With more women joining the workforce and becoming knowledgeable about financial instruments, there has also been a rise in the number of women participating as traders in the capital markets," she commented.
AGM Sattique Ahmed Shah, acting managing director and CEO of the Dhaka Stock Exchange, told the FE that gender diversity is a smart move and that they encourage it.
Mr Shah believes that gender diversity can boost the market. Calling gender equality a good economics, he said the regulator should implement gender-inclusive policies for a vibrant capital market.
[The story calculates the exchange rate at Tk 109.97]
[emailprotected],
[emailprotected]
