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Bangladesh Capital Market

In: Business and Management

Submitted By maruf
Words 1215
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Bangladesh Capital Markets
• Capital markets continue strong performance o Subprime crisis has left little impact on Bangladesh markets o Market capitalization is above US$20bn in 2009 from US$10bn in 2007 o Average daily turnover is approximately US$75mm in 2009 from US$24mm in 2007
Opportunities and Challenges
• Key opportunities for future growth o Institutionalization of market brings greater liquidity and lower volatility o Attracting large corporates for listing provides investors with viable investment options
• Challenges ahead o Retail dominated market resulting in higher volatility from speculation o Large, well reputed companies prefer to source funds from traditional bank finance against capital markets
Bangladesh Economic Outlook

• Remittance inflow has been resilient to global turmoil o Bangladeshis abroad sent home US$887.9mm in September’09
• Inflation continues to decline o Fell to 6.04% in July’09, from 6.66% in June’09 and 8.90% in December’08
• GDP growth forecast has been revised downwards to 5.88%, compared to 6.19% in the previous fiscal year
• Exports have been relatively sheltered due to low cost nature of Bangladeshi products o Recovery in the US and Europe, the major buyers, expected to boost export earnings
Key Commentary
• Local market has been relatively sheltered from the recent global meltdown in 2008 o Market was volatile in early 2009 but has stabilized with high turnover and market capitalization o FII interest to explore new front
• Impressive growth in liquidity in recent years o Average Daily Turnover increased from US$24mm in 2007 to US$ 75mm in 2009 o Highest recorded liquidity of US$166mm on July 2, 2009
• Market Capitalization of DSE in 2009 has been around US$20 bn, up from about US$10 bn in 2007
• 15 new issues in 2008 with 3 direct listings o 7 new issues…...

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