Chittagong Stock Exchange

CHITTAGONG, Aug 9, 2008 - "Contribution of the country's capital market to the GDP was still insignificant compared with neighboring countries though capital gain against the investment through the market is totally non-taxable." "In Bangladesh, capital market's contribution to GDP is only 11 to 12 percent while it accounted 90 percent in India, 80 percent in Thailand and 40 percent in Pakistan" Chittagong Stock Exchange (CSE) President Mr. Nasiruddin Ahmed Chowdhury said while exchanging views with the journalists today at Chittagong Club. CSE Directors - Mr. Tareq Kamal and Mr. Bijon Chakraborty, Chief Executive Officer Mr. A B Siddique among others spoke at the function held at Chittagong Club. The CSE president said the country's capital market has registered a steady growth in recent years but was still much lag behind in terms of its size and overall influence on the economy in comparison with the neighboring countries. He said total market capital of the country's share market has jumped to 11.20 billion US dollar from around 4 billion in past 5 years while the total turnover rose to Taka 5,064 crore up to June last which was only Taka 1,358 crore in the year 2002. "But the total market capital of India's capital market is around 1200 billion US dollar , 69 billion US dollar in Pakistan, 7.7 billion US dollar in Sri Lanka and 202 billion US dollar in Thailand" he said. Mr. Nasiruddin Ahmed Chowdhury said the CSE and DSE together has placed a proposal to the Securities and Exchange Commission (SEC) - the security market watchdog, a few months back to introduce Book-Building method instead of present Fixed-Price method in determining the prices of Initial Public Offerings (IPOs) of common shares of a company so that big investors with good business track record feels encourage to come to security market for raising their funds for business expansion. Volatile market situation, lack in implementing the rules and regulation properly and less consciousness among both small and big investors in realizing the core culture and behavior of the capital market were some main causes behind the poor state of country's capital market, observed the CSE President. Unfortunately entrepreneurs were still reluctant to depend on capital market for raising their required fund though it is quite easier and less expensive than other means like borrowing money from banks while the general investors are virtually considers the local capital market as a place of short -term profit which is an alarming trend in the way of sustainability of the capital market , he also viewed. Referring the private mobile operator Grameen Phone's recent decision to float its share into capital market , CSE President hoped that the country's capital market would find a stronghold by the year 2015 if present trend of growth is continue with coming up of big enterprises in both public and private sectors to the market.