Dhaka, Apr 28 (UNB) - Salman F Rahman, Prime Minister’s adviser on private industry and investment, on Sunday urged stakeholders to find means for long-term financing for the benefit of the local capital market and economic growth.
He also emphasised restoring the confidence of all stakeholders in the country's capital market.
Salman F Rahman made the remarks at an international conference on local capital market infrastructure financing jointly arranged by Dhaka Chamber of Commerce and Industry (DCCI) and GuarantCo at Radisson Blu Dhaka Water Garden in the capital.
He noted that commercial banks utilise short-term deposits to finance long-term projects which has been a fundamental problem in the banking sector.
“The problem in our capital market is that we suffer major market crashes. All of the stakeholders don’t realise that the rise and fall of the share prices are a natural phenomenon,” the PM’s adviser said.
He also said such fluctuations are inevitable in emerging capital markets like that of Bangladesh.
Salman F Rahman also criticised the role of stakeholders, saying, "All stakeholders retreated to a comfort zone (after major stock market crashes). It has acted as a major impediment for the capital market’s growth."
He urged the private sector to come forward with unique initiatives for the development of the share market infrastructure. "Restructuring and revitalising of capital market are important," he added.
DCCI President Osama Taseer pointed out that access to long-term financing is required for the participation of private sector in infrastructural development of the capital market. “We’ve seen many projects taken under the PPP model struggle due to financing problem,” he said.
He also mentioned that the capital market is underdeveloped and the private bond market is inactive. “Considering the urgency of bond-led financing, the corporate bond market in South Korea accounts for 73 percent of the GDP while in Malaysia it’s 46 percent and 16 percent in India whereas Bangladesh has below 0.20 percent,” Osama Taseer said.
The DCCI president urged all stakeholders to leverage the financing by reducing dependency on the national budget and engaging private sector for infrastructural development of the capital market.