Written by The Banking Post
Business leaders and market stakeholders have raised alarms over structural weaknesses in Bangladesh’s capital market, pointing to poor valuation models, complex regulatory requirements, and sluggish approval timelines as key deterrents for high-performing firms considering public listings.
The concerns surfaced during a discussion titled “Capital Market Expansion: A Framework for Sustainable Economic Growth” hosted by the Bangladesh Merchant Bankers Association (BMBA) on 9 July.
Syed Nasim Manzur, MD of Apex Footwear and former MCCI president, criticized the lack of incentives and excessive compliance burdens faced by listed firms. “Incentives like tax benefits have shrunk, while compliance pressures have grown. It now takes nearly two years to raise funds—compared to just 3–6 months in India,” he remarked, adding that many firms enter the market reluctantly and continue to favor short-term bank loans even for long-term investments.
Manzur also called out regulatory intervention in dividend decisions, saying profitability fluctuations must be accepted by investors rather than dictated by the regulator.
Uzma Chowdhury, director of PRAN-RFL Group, emphasized implementation gaps. “BSEC has made promising policy changes, but weak execution is why the market hasn’t matured,” she said. She also highlighted untapped potential in Sukuk issuance, calling for a demand-supply equilibrium and a strategic mindset.
DSE Chairman Mominul Islam acknowledged inefficiencies in the IPO pipeline, pledging to shorten approval timelines to under six months. He revealed that in the last 15 years, only 138 companies were listed by 66 merchant banks—raising questions about market readiness and institutional performance.
Mominul added, “We must stop expecting all IPOs to perform uniformly. A healthy market includes both winners and underperformers.”
Chief guest Anisuzzaman Chowdhury echoed the need for candid industry dialogue. “Beyond the capital market, economic mismatches must be addressed collectively. Stabilization requires honest, frequent engagement,” he said.
Keynote presentations by BMBA President Majeda Khatun and LankaBangla Investment CEO Iftekhar Alam laid out reform proposals including simplified listing norms, improved valuation frameworks, and greater institutional participation.
Their analysis positioned regional markets like India, Malaysia, and Singapore as models for flexible IPO regulations—highlighting the need for competitive reforms to re-engage top-tier firms.
