Govt aims to pull capital market out of crisis: Khosru

Finance and Planning Minister Amir Khosru Mahmud Chowdhury said stock exchanges and market intermediaries had failed over the past decade, contributing to the capital market falling into the same ditch as the economy.

“Now the government is lifting the economy and the capital market back up from the ditch,” the minister said yesterday at the inaugural ceremony of World Investor Week, organised by the Bangladesh Securities and Exchange Commission (BSEC) at the Krishibid Institution in Dhaka.

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The Bangladesh capital market had never received proper attention in the past, he said.

After independence, former president Ziaur Rahman opened the Dhaka Stock Exchange and created opportunities for mutual funds, which were far-reaching initiatives, but the momentum was not sustained, he said.

Subsequently, the capital market did not receive the comprehensive support it needed, ranging from policy measures to other forms of assistance, with many initiatives taken on a piecemeal basis, he said.

As a result, the capital market failed to develop as it should have. Instead, both the government and the private sector became overly dependent on banks, often borrowing at high interest rates, the minister said.

“Every regulatory body operated like an island, working independently without coordinating with others. That was another weakness of our capital market. Now, all regulators meet every month,” he said.

“Our market is shallow and lacks depth. We need to build that depth by creating the right environment. No good company will list in a ‘casino’.”

The days of running the country on funds from the World Bank, International Monetary Fund (IMF) and Asian Development Bank are over, he said.

“We are going to the market to raise money. We are going to float dollar bonds in New York, and we will go for Panda bonds, Samurai bonds and local currency bonds. Bangladesh’s financial architecture is changing.”

Insurance Development and Regulatory Authority (IDRA) Chairman Mir Nadia Nivin said increasing life insurance penetration would benefit the capital market.

“The insurers can provide long-term institutional capital to the bond market, equity market and infrastructure financing. And that is the scale of what is missing,” she said.

BSEC Chairman Masud Khan outlined the commission’s recent activities to restore investor confidence.

Tanvir Shahriar Ghani, special assistant to the prime minister on investment and capital market affairs, attended the event as the guest of honour.

Nazma Mobarek, secretary of the Financial Institutions Division of the Ministry of Finance, and Tanwir Habib Rahman and Hossain Sadat, BSEC commissioners, also spoke.