Dhaka Stock Exchange (DSE) Managing Director Nuzhat Anwar on Wednesday said though discussions on building an effective bond market in Bangladesh have been ongoing for a long time, the current commission and relevant stakeholders' initiatives have created fresh opportunities for progress in this sector.
"The capital market must not remain confined to IPOs or the equity market alone; opportunities for various forms of financing, including bonds, need to be expanded," she said while speaking at a workshop titled "Expanding RMG's Financing Horizons: Opportunities in the Capital Market," jointly organised by DSE and Swisscontact at the DSE Training Academy.
Nuzhat noted that the capital market is not merely an investment vehicle but a crucial source of long-term financing for the country's economic growth and private sector expansion.
She said it is essential to bridge the existing gap between the financing needs of the private sector and the capital market's financing capacity. At the same time, existing policy and regulatory constraints related to financing need to be reviewed as required.
The DSE MD said particular attention could be given to making the use of funds raised through IPOs, as well as refinancing opportunities, more effective.
She said the main objective of such discussions is to identify existing limitations in the capital market based on entrepreneurs' needs and real-life experiences, and to take effective steps to address them.
Nuzhat said DSE is working to build an effective, transparent, and business-friendly capital market by giving due importance to the opinions and expectations of relevant stakeholders.
Team Leader of Swisscontact's PROGRESS project Farzana Amin said the organisation has been supporting the development of the RMG sector for nearly two decades. Alongside bank loans, the potential of capital market-based financing also needs to be seriously considered.
She added that there are plans to provide end-to-end support in the future to RMG enterprises interested in participating in the capital market. "The goal is to develop a few enterprises as role models within the next year, so that their success encourages other enterprises to pursue capital market-based financing."
Md Harunur Rashid, deputy secretary of Bangladesh Garment Manufacturers and Exporters Association, said the country's industrial enterprises are still primarily bank-dependent for financing. “As a result, many enterprises cannot capitalise on business expansion opportunities due to a lack of adequate financing. In this situation, the capital market could serve as an effective alternative source of long-term financing.”
He said listing good and promising enterprises on the capital market will not only facilitate business expansion but also create new employment opportunities and accelerate overall economic growth.
However, Harunur added, ensuring sustainable business growth of listed companies even after listing is essential to maintain investor confidence.