The New Nation - Internet Edition

BSS, Chittagong

Contribution of the country's capital market to the GDP was still insignificant compared to the neighbouring 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 per cent while it accounted 90 per cent in India, 80 per cent in Thailand and 40 percent in Pakistan," Chittagong Stock Exchange (CSE) president Nasiruddin Ahmed Chowdhury said while exchanging views with the journalists here on Saturday night.

CSE directors Tarek Kamal and Bejon Chakraborty, chief executive officer AB Siddique, among others, spoke at the function held at the Chittagong Club.

The CSE president said the country's capital market has registered a steady growth in recent years but was still lagging behind in terms of its size and overall influence on the economy in comparison with the neighbouring countries.

He said the total market capital of the country's share market has jumped to 11.20 billion

US dollar from around four billion in past five years while the total turnover rose to Taka 5,064 crore up to June last which was only Taka 1,358 crore in 2002.

"But the total market capital of India's capital market is around 1,200 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.

Nasiruddin Chowdhury said the CSE and DSE together have placed a proposal to the Security 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 feel encouraged to come to the 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 realising the core culture and behaviour of the capital market were main causes behind the poor state of country's capital market, observed the president of the country's second bourse.

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 to private mobile operator Grameen Phone's decision to float 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 continues with coming up of big enterprises in both public and private sectors to the market.