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The research aims are to evaluate the growth and development of existing financial instruments and to recommend for introducing new financial instruments in the capital market of Bangladesh.
The data are taken from the Dhaka stock exchange for the year to for interpretation of development and the data from to are taken for analysis and hypothesis test.
There are only five products traded including three types of bonds. The growth of market capitalization of all products is high. There is lot of scope in the market for absorbing the new products.
The share of common stocks, treasury bond, corporate bond, debentures, mutual funds to total market capitalizations are The market is common stock based. The corporate bond market is very small. So, there should be increased new financial instruments in the capital market to reduce the dependency on share only.
The proposed financial instruments are various types of preferred stock, bond, SWAP, option, futures, and forwards as recommendation. Introduction The capital market is one of the driving forces of an economy.
Capital market is the institution that provides a channel for the borrowing and lending of long-term funds for more than one year.
It is designed to finance long term investments by business, governments, and households. Capital market consists of two segments: The securities segment is concerned with the process by which firm distributes securities to the public through the primary market and then those securities are traded in the secondary markets.
The non securities segments are those where banks and other financial institution provide the long term loan. In the world capital market there are many financial instruments such as-Forward, Futures, Option: The existing instruments of the capital market of Bangladesh are Shares, debentures, mutual fund, and Treasury Bond: An efficient bond market is important for managing public debt and bank liquidity and for efficient conduct of monetary policy.
So far the bond market has played a limited role in the economy. Thus the debt market in Bangladesh is characterized by excessive reliance on bank deposits, government dominated debt instruments, non- existent corporate bond, high and risk free interest rates, absences of market based yield curve, primary auctions based activity, lack of product variation.
Now, 31 FIs Financial Institutions are operating in Bangladesh while the maiden one was established in Out of the total, 2 is fully government owned, 1 is the subsidiary of a SOCB, 13 were initiated by private domestic initiative and 15 were commenced by joint venture initiative.
Bangladesh firms tend to have reasonable access to formal finance compared to other low-income countries. In credit to the private sector amounted to about 27 percent of GDP in Bangladesh. Although this ratio was lower than those in some counties in the region, it compares favorably with the average for low income countries 24 percent of GDP.
It was only fractionally lower than the ratios in India 29 percent and Pakistan 28 percent despite their higher per capita income.
Other measures confirm this assessment of finance in Bangladesh. For example, nearly 66 percent of their investment capital, on average, came from retained earnings, while about 30 percent of working and investment capital came from banks. Consider national level data on nonperforming loans.
Some estimates put the share of nonperforming industrial loans at around 40 percent. Since banks will have to provision for non performing loans, the large number of such loans could ultimately increase the cost of capital to entrepreneurs.
The problems of financial climate are poor access to credit and high cost of borrowing. For solving these, development of secondary market for debt market and enhancement the enforcement authority and institutional capacity of the Securities and Exchange Commission are recommended.The Associated Press delivers in-depth coverage on today's Big Story including top stories, international, politics, lifestyle, business, entertainment, and more.
TM Code: CSCX: XXXXX | CSCX XXXX | XXXX: XXXX. High-Bandwidth version. CSE | Terms and Conditions| Investor Protection | Disclaimer| Do's & Dont's | Terms and. Impact of Monetary Policy of Bangladesh Bank on the Performance of Stock Market in Bangladesh Rubina Afroze * Thus, this would lead to the higher stock prices.
Literature Review Various empirical studies, across a number of different stock market over a different time horizons, pointed out that Central Bank’s adopted monetary policy of a.
Literature Review Sr. No. Title 1. Stock Market Integration Between Three CEECs, Russia and the UK Author Guglielmo Maria Caporale & NicolaSpag nolo. JSTOR is a digital library of academic journals, books, and primary sources.
The econometric results of the study by employing the regression analysis showed that Pakistan stock markets contribute to the economic growth in terms of the large size of its stock market whereas Bangladesh stock market contributes to the economic growth in terms of the liquidity of its stock market.