Equity Market and Corporate Financing in Bangladesh (創立90周年記念論文集)

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概要

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• The importance of security markets to economic development is being increasingly recognized. This paper attempts to examine the role of equity markets in a developing country like Bangladesh. The recent development toward privatization and that of an equity market in Bangladesh may lead to the optimism about the expeditious upgrading of the equity segment of the capital markets as a source of sufficient long-term funds necessary for the industrialization of the country. But the share of new equity to gross domestic investment is generally less than 1%. The impressive increase in various government bonds and bank deposits has taken place while their respective yield was falling. Certainly, the attitude behind such a trend can't be explained in terms of irrationality on the part of the saving public, but in terms of pronounced risk averson. Efforts to speed up the development of the equity market, although laudable, may not lead to immediate tangible results in the face of various structural constraints. In view of such questionable effectiveness of equity market associated with various legal and structural constraints as well as the tradition of the country the development of close relations between banks and industry as a means of promoting economic development appears to be unavoidable. Development banks are an invaluable source of equity capital and long-term credit in developing countries like Bangladesh. Likewise, transformation of short-term deposits into instruments of long-term debt and ownership needs to be entrusted to a set of different institutions pending the eventual development of the capital markets. The shift in emphasis has profound policy oriented implications. But the scenario of the banking system is not encouraging in recent years in view of the large volume of non-performing loans. In order to get rid of these problems, pressures for developing the internal efficiency of these institutions may straighten the efficient use of funds. Indirect financing should not be considered as hindrance to the developoment of capital markets, but as a necessary step prior to, and as facilitating long run growth of the latter. However, official supervision of trading and overall market development is imperative if shares and bonds are to become attractive investment vehicles. Otherwise the investors may justifiably feel too exposed to the risk of market manipulation and other abuses, and may decline to invest in equity market.

• 長崎大学の論文

著者

• Ahmed M.farid

  長崎大学経済学部

関連論文

• Equity Market and Corporate Financing in Bangladesh (創立90周年記念論文集)
• Stock Price and Investment Measures in Bangladesh
• Development of Capital Market in Bangladesh: Some Lesson from Japanese Experience
• Private Sector and Capital Market in Bangladesh

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