Muhith upbeat over capital market’s future

Finance minister AMA Muhith on Wednesday noted that stability has already been imparted to the capital market and its base has been established, which are positive signs for taking the market forward.
The minister was speaking at a programme—‘Seminar on Bangladesh Capital Market: Present Scenario and Future Prospect’—organised by Bangladesh Merchant Bankers Association (BMBA) at a city hotel on Wednesday.
Muhith expects the capital market to grow in the near future. “The bourse market has already established itself as rule-based so far. By 2018, it would be a fully active capital market.”
Given the size of the capital market, Muhith expects large corporations to come and issue bonds, so that there is no deficit of subscriptions in the market. Muhith also believes as the country’s assets are increasing, investments should come from the capital market.
Muhith also observed, “Though the capital market was formed in the early 1950s and started growing in the 1980s, in reality, we still have not been able to create any bond market. In 1964, I myself invested in the capital market, and in the bond market as well.” 
BMBA president Sayadur Rahman admitted at the event that five to six years ago, the market was completely unstable and in turmoil, but added that now it stands on a robust foundation. He mentioned a couple of initiatives that have already been taken, adding that the consequences are visible to everyone. Such initiatives include: establishment of the Demutualisation Act; a lot of new rules and regulations; introduction of surveillance software; establishment of a special tribunal; upgrade of the Bangladesh Securities and Exchange Commission (BSEC) from B to A category; and making feasible the clearing commission.
“The BMBA was formed in 2004 with only 18 merchant banks. Now the figure has crossed 50,” he added.
IDLC Investments Limited (IDLCIL) managing director Md Moniruzzaman presented a keynote paper, saying that in 2004, the turnover used to be Tk. 10 crore, but now has crossed Tk. 435 crore. In 2004, market capitalisation was Tk. 1.6 billion, and now has become Tk. 34 billion. IDLC Investments Limited (IDLCIL) is a full-fledged merchant bank, headquartered in Dhaka, Bangladesh. The company is a wholly owned subsidiary of IDLC Finance Limited (IDLC).
Moniruzzaman chronicled the sectoral performances of different companies on the basis of their compound annual growth rate (CAGR), which the MNCs topped. It emerged that 50 per cent of companies performed well over the past four years. Moniruzzaman also cited the example of a tobacco company that has appreciated 700 times compared to a financial institution.
According to a report on world financial markets in 2013, the global capital markets’ GDP contribution is 217.33 per cent, but for Bangladesh it is only 18.46 per cent. This shows there is ample scope to grow in the market and it is a positive sign as well, he added.
“Bangladesh’s capital market is 80 per cent retail-dominated and research-based value investment. Listed firms have enjoyed more tax exemptions than non-listed firms, but numerous good companies have not been listed yet,” Moniruzzaman added.
While Bangladesh Securities and Exchange Commission (BSEC) chairman Khairul Hossain admitted that the capital market was now stable, he rued that a lack of competency still existed in the market. “We have taken some initiatives, such as the 10-year master plan, an e-filing reporting system (which will be introduced in the near future), and a financial literacy programme (which will be launched soon).”
At the end of the programme, Hossain drew the attention of the finance minister to the following issues: the need to turn the market size of 20 per cent into 50 per cent of the economy; the need for more foreign direct investment (FDI); the necessity of rules for a venture capital platform; and the necessity for demographic age structures.

Muhith upbeat over capital markets future

Finance minister AMA Muhith on Wednesday noted that stability has already been imparted to the capital market and its base has been established, which are positive signs for taking the market forward. The minister was speaking at a programmeSeminar on Bangladesh Capital Market: Present Scenario and Future Prospectorganised by Bangladesh Merchant Bankers Association (BMBA) at a city hotel on Wednesday. Muhith expects the capital market to grow in the near future. The bourse market has already established itself as rule-based so far. By 2018, it would be a fully active capital market. Given the size of the capital market, Muhith expects large corporations to come and issue bonds, so that there is no deficit of subscriptions in the market. Muhith also believes as the countrys assets are increasing, investments should come from the capital market. Muhith also observed, Though the capital market was formed in the early 1950s and started growing in the 1980s, in reality, we still have not been able to create any bond market. In 1964, I myself invested in the capital market, and in the bond market as well. BMBA president Sayadur Rahman admitted at the event that five to six years ago, the market was completely unstable and in turmoil, but added that now it stands on a robust foundation. He mentioned a couple of initiatives that have already been taken, adding that the consequences are visible to everyone. Such initiatives include: establishment of the Demutualisation Act; a lot of new rules and regulations; introduction of surveillance software; establishment of a special tribunal; upgrade of the Bangladesh Securities and Exchange Commission (BSEC) from B to A category; and making feasible the clearing commission. The BMBA was formed in 2004 with only 18 merchant banks. Now the figure has crossed 50, he added. IDLC Investments Limited (IDLCIL) managing director Md Moniruzzaman presented a keynote paper, saying that in 2004, the turnover used to be Tk. 10 crore, but now has crossed Tk. 435 crore. In 2004, market capitalisation was Tk. 1.6 billion, and now has become Tk. 34 billion. IDLC Investments Limited (IDLCIL) is a full-fledged merchant bank, headquartered in Dhaka, Bangladesh. The company is a wholly owned subsidiary of IDLC Finance Limited (IDLC). Moniruzzaman chronicled the sectoral performances of different companies on the basis of their compound annual growth rate (CAGR), which the MNCs topped. It emerged that 50 per cent of companies performed well over the past four years. Moniruzzaman also cited the example of a tobacco company that has appreciated 700 times compared to a financial institution. According to a report on world financial markets in 2013, the global capital markets GDP contribution is 217.33 per cent, but for Bangladesh it is only 18.46 per cent. This shows there is ample scope to grow in the market and it is a positive sign as well, he added. Bangladeshs capital market is 80 per cent retail-dominated and research-based value investment. Listed firms have enjoyed more tax exemptions than non-listed firms, but numerous good companies have not been listed yet, Moniruzzaman added. While Bangladesh Securities and Exchange Commission (BSEC) chairman Khairul Hossain admitted that the capital market was now stable, he rued that a lack of competency still existed in the market. We have taken some initiatives, such as the 10-year master plan, an e-filing reporting system (which will be introduced in the near future), and a financial literacy programme (which will be launched soon). At the end of the programme, Hossain drew the attention of the finance minister to the following issues: the need to turn the market size of 20 per cent into 50 per cent of the economy; the need for more foreign direct investment (FDI); the necessity of rules for a venture capital platform; and the necessity for demographic age structures.