Bangladesh is absent from global discussions on capital markets and investment, former Bangladesh Bank governor Mohammed Farashuddin said today (14 December).
"While stock markets in Karachi, Lahore, Mumbai, Bangkok, Colombo and even Bhutan are regularly discussed at international and regional levels, Bangladesh's capital market does not feature in those conversations," he said while speaking as the chief guest at the prize-giving and closing ceremony of NeXTor 2.0, an inter-university real-time capital market competition at East West University.
The competition was organised by the East West University Investment and Finance Club.
Farashuddin said identifying why domestic savings are flowing into the banking system – despite banks facing serious stress – instead of the stock market has become a major challenge of the time.
Referring to the long history of Bangladesh's capital market, he said that over the past nearly 70 years – first under the East Bengal government and later the Bangladesh government – various initiatives were taken to strengthen the Dhaka and Chattogram stock exchanges.
"Despite these efforts, the international financial and investment community has largely avoided Bangladesh's stock market," he added.
He said the concentration of a large share of the country's total wealth in the hands of a few people runs contrary to the spirit of the Liberation War and the recent mass movement, making the role of the capital market more important than ever.
Recalling the formation of the Central Depository System (CDS) in 2000, Farashuddin said political statements and a lack of trust caused the initiative to fail at an early stage, dealing a major blow to confidence in the capital market.
He said the biggest failure was the inability to place independent, honest, and fearless individuals in the governance of the stock exchanges and the capital market.
"Instead, people with questionable and dubious backgrounds were given space, which eroded confidence in the market," he said.
Citing examples from neighbouring countries, he said qualified and independent directors are appointed there with high remuneration so they can make decisions with time, courage, and judgement.
"Bangladesh has yet to show that level of firm commitment, both from the government and the corporate sector," he said.
Expressing optimism, Farashuddin said one day the Dhaka and Chattogram stock exchanges would earn public trust.
"On that day, people will invest their savings—what remains after meeting expenses—in the capital market, and international investors will also gain confidence in doing business with Bangladesh," he said.
More than 260 teams and over 750 students from more than 30 universities across the country took part in the competition.
Bangladesh University of Professionals' Team FMV emerged as champions in the contest, which offered a total prize money of Tk205,000. Team NSUERS from DAF of North South University became first runners-up, while East West University's Team Singularity finished second runners-up.
Acting Pro Vice-Chancellor of East West University Professor Dr Mohammad Ashik Mosaddik attended the event. Mamun Rashid, chairman of Financial Excellence Limited and former chief of Citibank Bangladesh, attended as special guest.