Let us rewind back to 10 years ago. Bangladesh was probably one of the least likely places in the world where global fund managers and investors would inject their money for wealth generation. This constantly politically problematic, bureaucratically chaotic and internally unfriendly state could in no way occupy investors’ dreams and aspirations.
We were recognised as one of the N-11s, a list of eleven economies that can become major markets after the BRICS (Brazil, Russia, India, China and South Africa) according to global investment banking giant Goldman Sachs and were maintaining constant GDP growth rates. However, when it came to long-term investment in the money market and capital market, we lagged far behind neighbours India and China. There simply was no interest.
However today, in 2014, when we press the play button, the equation has changed drastically. Alongside Goldman Sachs, Bank of America, Morgan Stanley and Merrill Lynch are taking a serious interest in us and have injected more than $200mn in the money market of the country. Private equity and impact investors, such as Tau Investment have also seen value in the activities and evolution in Bangladesh. Japanese and German entrepreneurs are now seriously looking into infrastructure and manufacturing projects in Bangladesh. This reinforces the findings of Citigroup, who in 2011 ranked Bangladesh in the list of Global Growth Generators (3G countries).
The increased interest in the financing industry of Bangladesh has resulted in a corresponding shift in the financial services industry. Bangladesh has undergone some world class improvements in its securities and brokerage firms, which are thriving in the country. There are opportunities now which were not there for any of our previous generations. Educational institutes of the country are emphasising the role of finance in the future and what we are now seeing is a plethora of these young graduates who are interested in working and making a name in this industry.
I had an opportunity to sit with Manager and In-Charge of Institutional and Foreign Trade Rehan Muhammad and Research Analyst Maksudul Haque Chowdhury at the Capital Market Research Department, both of LankaBangla Securities. The underlying message was that the securities industry provided a career path for the supremely bright and ambitious and has become one of the most prominent sources of profit in the newly-emerging knowledge-based economy.
The corporate office, in Motijheel, reflected more of Wall Street than any of the passers-by outside the air-conditioned office could presume. The comparison goes beyond aesthetics to the organisational culture of LankaBangla.
The intense nature of the business is such that it requires you to be on your toes and ready for all permutations. Brokers facilitate movement of money across the various investments available and are required to utilise their knowledge of finance and business nous to survive in this industry. A good day can enable a stockbroker to earn commissions like never before, and likewise a bad day can make them lose so much of their client’s money that they can be left sitting back, wondering what just happened.
Stockbrokers need to be able to understand the messages behind the numbers and seize the opportunities for profits and commissions. The power of analysis is absolutely crucial, and being passionate about building wealth, both for you and your clients, is an integral part of the job.
Office is almost never over for stockbrokers involved in foreign trade, such as Rehan. While he is analysing and making crucial decisions in Dhaka, his clients are probably sitting in distant places like New York, London and Singapore — unaware of the chaos taking place in this city.
This means that even when the markets close down, he has to be ready for all sorts of client meetings and further preparations for the next day. It is never too late to analyse and research, and Rehan’s finance background helps him to use his power of analysis to provide the pertinent information to support investment decisions.
Similarly, Maksudul Hoque at LankaBangla has his own set of challenges as a research analyst. Financial statements of most Bangladeshi corporations meet only the minimal standards, thereby hindering the ability to provide any assurance on recommendations.
In a globalised era in which the stock market in Tokyo rises up as the one in London closes down, while that in Mumbai goes for a lunch break, Maksud finds it a constant challenge to ensure the information he requires is available at the right time. Making sure that the best information is provided accurately is a daily obstacle for him, and as a proactive professional looking forward to a very fulfilling career, he works tirelessly to make things happen.
The securities industry in Bangladesh has progressed from the rumour and sentiment driven systems of stock trading towards one based on fundamental analysis. Companies like LankaBangla and BRAC EPL now have access to the best young graduates coming into the industry and they are making excellent use of these talented people by providing them with a huge avenue for success.
These companies are also symbolising the changing face of Bangladesh in various ways. By employing world-class research departments and making use of the best available technologies at the backdrop of a strong financial system, companies in the category are representing the modern face of an economy that is desperate to thrive in the world market.
To make the entire process sustainable, global practices and international standards must be met by the existing corporate governance of the country. Regulators and company CEOs need to make sure that there is a highly transparent system in place for the securities industry to flourish and sustain them.
While the industry is in rapid development, only when our standards are assured to a global audience can we hope to become a major investment destination in the world market. This is an exciting industry and it will rise as will motivated and fast thinking graduates.
