The stockmarket's contribution to the economy is very low but it should be increased for Bangladesh to become a developed country, said market analysts.
The ratio of Dhaka Stock Exchange's (DSE) market capitalisation to gross domestic product (GDP) is still very low compared to that of other countries despite huge endeavour, said KAM Majedur Rahman, managing director of the bourse.
“The ratio is now around 18 percent whereas it is more than 100 percent in many developed countries. We will have to increase the ratio to at least 40 percent in order to be a developed country,” he said.
Addressing a seminar organised by Independent University, Bangladesh (IUB) at its auditorium on Tuesday, Rahman said they were trying to bring new products to attract investors and for the capitalisation to rise.
To raise the ratio, issue managers will have to bring well-performing companies to the market to raise capital while more stock investors have to be attracted, he added.
Rashed Chowdhury, a member of the IUB's Board of Trustees, echoed the same, saying that big industries should come to the market to enlarge their businesses instead of going to the bank, which in turn would lead to building a developed nation.
“The new generation should come forward to the stock market to boost the market's contribution to the economy,” he said. Other speakers also opined that the stock exchanges and the regulator were bringing new products and trading boards which would open up a lot of opportunities for investors and entrepreneurs.
“Now investors should come to the market to get higher benefits instead of opting for bank interest rates and entrepreneurs should also come to the market to raise capital for multipurpose uses,” they said.
IUB Vice Chancellor Prof M Omar Rahman chaired the seminar while Prof Milan Pagon, pro-vice chancellor, and Md Aminul Karim, dean of the School of Business, also spoke.