Capital Market: Opportunities and Challenges

2005

Bangladesh securities market came into being in 1954. Despite its operation of half of a century, its growth is unimpressive. The market remains in its infancy becau se of multifarious weaknesses affecting its operation. Legal and regulatory weaknes ses are considered to have hindered the market most from growing to a reasonable extent. The securities regulator introduced unrealistic reforms one after another over the last decade. The lack of appropriate legal reforms has sometimes created regu latory fragility and in turn facilitated corporate culpability. Nothing significant has been done so far to provide protection to investors. The regulator in January 1999 imported the disclosure philosophy from developed economies by discarding the previous paternalistic merit regulation without any study being conducted on the market readi ness to utilise it. The adoption of the new philosophy aimed to restore investors' con fidence which was eroded by the unprecedented share scam in 199...

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2017

Capital market has been playing a vital role by managing fund and capital of corporation through its operations. There are many factors within capital market and outside of it, which are influencing the performance and development for functioning properly a business domain. It helps the corporations to source their capital and perform based on their business operation. In this way, capital market performance highly related to the macroeconomic factors along with its internal factors. This paper examines the institutional and macroeconomic determinants of stock market performance using data in the last 20 years starting from 1995 to 2015. In this paper, Gross Domestic Product (GDP), Consumer Price Index (CPI), inflation rate and Foreign Direct Investment (FDI) inflows were used as the proxy of macroeconomic determinants, whereas market capitalization, total issued capital and market turnover of Dhaka Stock Exchange were the proxy of institutional determinants of capital market performance. To identify the determinants and their significance in capital market development, both descriptive and inferential statistics are used. Descriptive statistics shows the trends and characteristics of the variables, while inferential statistics reveals the strengths of independent variable to influence the dependent variable. In the findings, both institutional and macroeconomic variable significantly influence the capital market performance. Categorically, CPI and GDP as macroeconomic determinants and Total Market Capitalization as institutional determinant found significant based on their coefficient value in the ordinary least square multiple regression analysis. These findings may become a useful input to design policies and strategies for stabilizing and stimulating the capital market in Bangladesh, especially, Dhaka Stock Exchange (DSE).

Research Article, 2018

Capital Market is the backbone of an economy. This study's main object is to find out the impact of capital market failure in Bangladesh i.e. Chittagong Stock Exchange during the year 2010-11 and to find out responses of investors in CSE. While conducting this research, 140 investors are selected from CSE and out of this 120 investors responded properly, the response rate is 85 percent. A questionnaire was prepared for this study which consisted of different questions on four dimensions of investors for the investment. In this study, some statistical measures such as descriptive statistics and regression analysis were used to examine the impact of capital market failure in Bangladesh. The study discovers four dimensions such as exposure of bank, availability of authentic information, knowledge about risk management, and efficiency of Securities and Exchange Commission which had positive and significant effect on investors' responses towards CSE. Findings also suggest that investors had unfavorable responses toward all those dimensions which led to capital market failure especially in case of CSE. This paper will help both investors and policy makers to know the impact of capital market failure and to make proper decision to manage and invest in future to the capital market in Bangladesh. IJSB

International Journal of Business and Economic Affairs, 2019

Topics related to financial market evolution have been researched and are still under exploration of many successful institutions and internationally recognized economists, including Nobel Prize laureate academics. Today, on the background of the progress of globalization and computer technologies, scientific interest in the issue is increasing day-by-day. It is especially interesting to explore the capital market or long-term securities market. The capital markets in emerging countries are still underdeveloped. The main source of attracting financial resources for business is the loan taken from commercial banks, and the source of financing with equity capital is relatively unused. Therefore, the goal of the paper is to analyze current standing of capital markets and show the possible solutions for the further development, by observing the examples of several countries. In order to achieve the goal, the paper describes the historical context and current status of the securities markets in developing countries, especially in Georgia and evaluates it. Finally, the paper presents number of recommendations in order to make capital market more attractive for investors. Research is basically based on studies of Georgian capital markets and is designed so as to address real world problem and to contribute to academic literature with regard of financial markets. Therefore, its results will be useful and interesting not only for developing countries, but also for asset management companies and investment banks.

2015

Recent turmoil in capital market after an era has reached its devastating pinnacle. Unpredictable market index and its dubious nature have demotivated thousands of small investors. Consequently, violent protest of the investors against the capitalist elites and the delinquency of market authority has been focused seemingly as criminal activities, once whoever was considered as accelerator of economic development. The current scenario resembles that of 1996, and the futile efforts of the market authority alongside with the government proved the failure of the economic system that promotes this bubble market. Once the bubble bust, the tricksters try to bring back the trust of the small investors in the name of adopting different regulations that again save the swindlers. Because of nosedive and abrupt upheaval in stock market, small investors are entrapped again and again; the fruits of the scam are favored to the elites. Different analysis was undergone finding the causes of this col...

Bangladesh capital market is one of the smallest market in Asia but the third largest in the South Asian region. A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price. These are securities listed on a stock exchange as well as those only traded privately. Economic development is a term that generally refers to the sustained, concerted effort of policymakers and community to promote the standard of living and economic health in a specific region. Such effort can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, environment sustainability, social inclusion, health, safety, literacy and other plans. Economic development differs from economic growth and economic development is policy involvement activities with aims of economic and social well-being of people. Economic growth is a phenomenon of market productivity and rise in gross domestic product. In this paper an attempt has been taken to analyze the capital market in some details.

The Journal of Developing Areas, 2017

The paper empirically investigates the relationship between bank, stock market and economic growth in Bangladesh. In investigating empirical relationship , GDP at the current price, private sector credit given by banks and market capitalization are considered as indicators of economic growth, banks' development and stock market development, respectively. Three possible regression models are estimated to know the relationship between economic growth and financial sector development. The paper shows that bank's credit to the private sector is both positively and robustly contributing to the economic development of the country when bank credit to private sector entered alone in regression as an independent variable. Besides long-term relationship, contemporaneous change in bank's credit to the private sector has profound positive short-run feedback effects to the economic growth. In assessing impact of stock market development on economic growth, no significant long-run relationship is found between stock market development and economic growth in Bangladesh. However, net positive subdued short-term effect of stock market development is evident. But when both bank and equity market jointly enter the model to find out the relationship of both variables with economic growth, a long-run relationship has been evident without statistical significance. It indicates that Bangladeshi financial system comprising both banking sector and stock market jointly is not still a strong promoter of its economic growth, although banking development alone is robustly associated with economic development.Bangladesh therefore needs to enhance the efficiency of banks for increasing credit to the private sector. An immediate initiative is also required to make both equity and debt market as regular sources of finance for the economy. In this perspective, ensuring smooth operation of primary and secondary market, increasing financial literacy among investors, minimizing volatility of the market, expanding issuer base, creating both individual and institutional investors, enhancing efficiency of the brokerage house, adding innovative financial services, initiating knowledge based trading, introducing shelf registration system, creating more professional trustee and ensuring authenticate credit rating from the rating agencies are required to be ensured.

This paper outlines the conceptual, contextual and disciplinary scope of the rapidly evolving area of corporate governance of capital market of Bangladesh. As a basis for improving the rigor of research and analysis, some definitions, principles, theories and legal frame work of corporate governance are examined. This study also investigates the extent to which the capital market of Bangladesh comply with the corporate governance guidelines of Securities and Exchange Commission Bangladesh(SECB) and it also indicates that only sound corporate governance practices are the foundation upon which the trust of investors(stakeholders, banks, and non bank financial institutions) and other stakeholders is founded.

A stock market plays as a strong role in the industrialization and economic development of the country. Among the developing countries, the contribution of the capital market have lately been recognized. This paper assess the Intensifying

Project Report, 2022

An investment bank is a financial services company that acts as an intermediary in large and complex financial transactions. The financial sector is one of the most vital sectors for any country specially for a developing country like Bangladesh. In such a developing stage of the economy of Bangladesh, the significance of different investment banks is enormous. The Investment Banks helps in capital formation for the formation of business and industries which helps our economy to grow. In the report, at the very first chapter Introduction of the report, objectives, scope, and methodology, sources of data collection and limitations of the study have been acknowledged. In the second chapter Literature Review has been described accordingly. In the third chapter Investment Banking Firms in Bangladesh has been described i.e., Overview of the investment banks in Bangladesh, functions of the assigned investment banks. In the fourth chapter Performance Analysis & Evaluation i.e., different ratio analysis and DuPont model is performed for the assigned investment banks. Finally in the last chapter Findings, Recommendations & Conclusion are stated respectively.

The main study of this research is to find out the performance of Small Investors in the capital market and also highlight the activity of Chittagong Stock Exchange (CSE). The theoretical background of the study includes brief introduction of Bangladesh stock market with its structure and different regulatory and intermediary organizations. This paper assesses the Intensifying of Stock Market in Bangladesh based on Chittagong Stock Exchange (CSE). Information collected from primary and secondary data along with identifying the major dominants factors and some problems or lacks of stock market which is greatly obstacle to intensifying the stock market in Bangladesh. We have collected information from 150 respondents, which are considered as our sample and each respondent are sampling unit. The questionnaire was designed in such a way that maximum information may be obtained within short time. we used the technique of purposive sampling. The data was collected by interviewed method. The main sources of secondary data are the portfolio published by CSE and official website and magazines published by CSE. The information was arranged and analyzed in different tables. After processing data we perform statistical test such as chi square test and also run logistic regression model for the data. The study warrants the continuity of research for a conclusive analysis and synthesis concerning the level of efficiency of the less developed market.

AIUB Bus Econ Working Paper Series, 2011

The financial sector of Bangladesh is generally small and underdeveloped. This sector consists of a banking segment and an emerging but still nascent capital market segment. The banking segment in the country is relatively more developed than the equity market segment, even though both are quite underdeveloped in international comparison. The root causes of the Bangladeshi financial sector problem are the lack of market discipline due to lack of competition in the banking industry. Excessive government intervention and political connections, economic and political corruptions, operational and managerial inefficiency and ineffectiveness result in vicious circle that inhibits economic development, industrialization, and social progresses in poor and developing countries in general and in Bangladesh in particular. Authors' suggested that in the financial regulation should be strengthened and further needed reforms should be carried out. In addition, an ombudsman may be appointed in the financial sector. The ombudsman can act independently to investigate any complaints regarding financial services and must work freely and independently. Better financial services and diversified financial products would be the natural consequence of competitive financial industry. The authors argue that a strengthened regulatory environment and additional much needed financial sector reforms, a better and more efficient financial sector may evolve over time and serve better the development needs of the country.

Brac University, 2020

New Challenges in Accounting and Finance, 2021

The paper analysed the implication of establishing the capital market on commercial banks operating in Ethiopia. The study aimed to identify its potential opportunities and main challenges to banks, to see how the capital market is operating in other African countries and to show the necessary preconditions to commercial banks to prepare themselves. The research method employed in the study had both qualitative and quantitative features, and the research was conducted using a mixed research method. Primary data was collected from focus group discussions with experts that have experience in the area, and, furthermore, secondary data were collected from literature and websites. The findings of the study identified the major risk of the capital market to the economy like economic risk to investments, inflationary/deflation risk, market value risk, being too conservative and political crisis by relating with the current situation of country regulation power. The study also investigated ...

2018

Bangladesh Institute of Bank Management (BIBM) 1 Direct financing here refers to financing mechanisms through issuing shares and bonds only. However, European Union at present permits direct financing with a view to lessening burden on banks under which insurance companies, pension funds authority and other surplus units can lend directly to the corporate sector.