A UK-based investment association and a development finance institution also based in UK have expressed interest in initiating global advocacy to bring foreign investment into Bangladesh’s stock markets.
However, they have identified five barriers into attracting foreign investment to the country’s two markets - Dhaka and Chittagong stock exchanges.
Emerging Markets Private Equity Association (EMPEA) and CDC Group are willing to take the move.
Commercial Counselor of Bangladesh in the United Kingdom Sharifa Khan sent a letter to Finance Secretary Mahbub Ahemd in this regard.
It said the CDC and EMPEA are keen to invest in the country as well as launch the global advocacy.
The letter mentioned some barriers which include restriction on repatriation of the capital from Bangladesh and three-year lock-in periods following initial public offerings of securities (IPOs).
Business integrity and corporate governance are also of concerns for foreign investors willing to step in the Bangladeshi stock markets.
Besides, Bangladesh Securities and Exchange Commission (BSEC) has only made a limited adherence to international accounting standards, the letter said.
It said there also exists a lack of private equity regulatory guidelines for investment in the two stock exchanges.
Commercial counselor said the intention of EMPEA and CDC Group is to highlight the potentials for private equity development within Bangladesh and how regulatory enhancement could attract capital into the country.
EMPEA is a global industry sector association for private capital in emerging markets. It is an independent non-profit organisation.
As EMPEA celebrates its 10th anniversary in 2014, the association has over 300 member firms, comprising institutional investors, fund managers and industry advisers, who together manage more than $1tn of assets and have offices in more than 100 countries across the globe.
The association members share EMPEA’s belief that private capital is a highly suited investment strategy in emerging markets, delivering attractive long-term investment returns and promoting the sustainable growth of companies and economies, the letter cited.
The association supports their members through global authoritative intelligence, conferences and events, networking, education and general and regulatory advocacy.
Last April, the CDC Group invested $28m in private sector lender Ratnakar Bank in India, a transaction that made the British development financial institution picking up a 4.8% stake in the Kohlapur-based and private equity-backed bank.