Share price movement at the country’s capital market within a narrow limit has been acting as a major impediment to the growth of the market as ups and downs at the market are very much natural, said prime minister’s private industry and investment affairs adviser Salman F Rahman.
Mentioning the country’s long-term financing need to turn into a developed country by the year 2041, Salman said that the restructuring and revitalisation of the capital market and beginning of the bond market were very much important.
He made the remarks while addressing the inaugural session of ‘Local Capital Market Infrastructure Financing Conference’ held at the Radisson Hotel in Dhaka.
Dhaka Chamber of Commerce and Industry and GuarantCo, a wing of Private Infrastructure Development Group (PIDG), organised the conference where DCCI president Osama Taseer and PIDG chair Andrew Bainbridge were present, among others.
Speaking about the movement of share prices in the capital market, Salman said, ‘Unfortunately, all the stakeholders including investors, issuers and regulator do not realise that the capital market by nature rises and then falls.’
‘Especially in an emerging market, it is even more expected that this kind of fluctuation of prices will take place,’ he said.
Stressing the need for long-term financing source for development, he said, ‘We are mostly dependent on commercial banks for any financing but banks are not supposed to finance for long term.’
Osama Taseer said that the bond market in South Korea accounted for 73 per cent of its GDP, in Malaysia 46 per cent and in India 16 per cent, whereas the percentage was 0.2 per cent in Bangladesh.
Andrew Bainbridge said, ‘Capital markets, especially bond markets, have been the dominant source of finance for infrastructure projects in matured and developed markets.’
Bangladesh needs investment in excess of $600 billion in 2016-2040 in infrastructure sectors such as water, energy, telecoms, ports, airports, rail and road, according to a study report launched at the programme.
Responding to a request made by Dhaka Stock Exchange managing director KAM Majedur Rahman, principal secretary to PM Md Nojibur Raman said, ‘We need to have a review of the taxation policies.’