The Potential of the Bangladesh Capital Market
Mamun Rashid runs an expert eye over our financial future
The capital market is the engine of growth for an economy. It performs a very critical role in acting as an intermediary between savers and companies seeking additional financing for business expansion.
A huge amount of capital may stable economy of a country. Lending by commercial banks provides good initial support for corporate growth, but a developed stock-market may play a good role for big industrialization in the country. Today, with a $67 billion economy and per capita income of roughly $500, Bangladesh should really focus on improving governance and developing advanced market products, such as derivatives, swaps etc.
In spite of a challenging political environment and widespread poverty, Bangladesh has achieved significant development on the social welfare. With growth rate of 7 percent the economy has accelerated to an impressive level. The leading global investment banks like Citi, Goldman Sachs, JP Morgan and Merrill Lynch have all identified Bangladesh as a big investment market.
Reasons behind the underdevelopment
It is encouraging for us to see that the capital market of Bangladesh is growing slowly. Some corporate inside information remains a major problem in the market. There are many institution and institutional investors who have an investment unit with qualified officers. This institution took advantage of corporate inside information and enjoys certain benefits. Most of The retail investors of Bangladesh have not adequate knowledge about capital market. They primarily focus on advice given their brokers and some times they traded their shares on the basis of market rumors. For that reason the retail investors became looser again and again.. Filtering of company’s inside information among different types of investors may create scope of manipulation. but This is not acceptable.This may be a cause of falling down market...
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