'Development of stock market and bond market are crucial because it would be the sustainable financing avenues for private sector'
Alternative financing sources like capital market and bond market should be more vibrant to meet the demand of private sector financing, said speakers On Thursday.
The observation came at a session titled “Innovative Finance to achieve inclusive and Sustainable Business and Investment: Capital Market Development, Blended Finance and Fin Tech”.
The three-day program was organized by the International Chamber of Commerce (ICC) at InterContinental Dhaka.
“Development of stock market and bond market are crucial because it would be the sustainable financing avenues for private sector,” said AB Mirza Azizul Islam, former finance adviser to a caretaker government, at the final day of the three-day conference.
On Thursday was the concluding day of the conference titled ‘The Asia-Pacific conference on financing inclusive and sustainable development’.
Banks lent from their short term deposits and if they went for long term lending it created pressures on overall liquidity, he said.
“So alternative sources of finances like stock market and bond market are important. Stock markets are the main sources for long term financing in global perspective but in our country, unfortunately capital market is performing very poorly.”
Alamgir Morshed, managing director and head of commercial banking of Standard Chartered Bank, said Bangladesh was in a trajectory of graduation from least development country to middle income country. It was a huge success but it brought some challenges to finance especially in infrastructure, he added.
“So, we have to find out alternative ways of finance rather than relying on banking sector. Bond market can be a way out to address the dearth of fund crisis,” he said.
Alamgir said there was no single solution to develop a vibrant bond market that required participation of all stakeholders to create an ecosystem.
“First we need to accept that financing requirement cannot be met domestically without having strong bond and stock markets,” he added.
Wendy Jo Werner, country manager of International Finance Corporation, said a benchmark was needed to issue bonds in the international investment market.
“When you have a more information about local bond market and secondary trading, it will improve your standing to offer bond in the international markets,” she added.
Majedur Rahman, former managing director and chief executive officer of the Dhaka Stock Exchange, said the country’s capital market was not performing well for the interest of achieving SDGs.
“The DSE tried to develop separate platform for small companies to raise money through bond market but these efforts failed due to lack of cooperation from the regulatory regimes and other stakeholders,” he added.
Nguyen Phi Van, Chairwomen of Viet Nam Angel Network of Ministry of Science and Technology of Viet Nam, said venture capital and impact investment could play a vital role to accelerate SMEs and start-up, but it needed an eco-system and environment.
Tissa Jayaweera, managing partner of TJ Associates and former chairman of ICC Sri Lanka, also spoke at the event.