Dhaka:The government is set to implement a series of reforms aimed at deepening and diversifying the nation's capital market. These reforms include simplifying the initial public offering (IPO) process and lessening the reliance of industries and infrastructure projects on bank financing.
According to United News of Bangladesh, the government intends to transform the capital market into a significant source of long-term financing for various sectors such as infrastructure development, technology-driven initiatives, and promising businesses. The budget document highlights the importance of an effective capital market for mobilizing long-term funds, as an excessive reliance on bank loans for industrialization and infrastructure development burdens the financial sector.
The government plans to address the reluctance of financially sound companies to list on the stock market by reducing unnecessary complexities, delays, and costs associated with the listing process. Efforts will be made to protect investor interests while making listing requirements more transparent and supportive of growing companies. The IPO process will undergo simplification, becoming time-bound and integrated into a digital platform to streamline applications and approvals.
In an effort to enhance market stability, the government aims to increase the involvement of institutional investors such as pension funds, insurance companies, and asset management companies. Plans also include the expansion of the corporate bond market and the introduction of municipal bonds to finance local government projects. Additionally, the government is considering the operationalization of the country's first commodity exchange and examining the feasibility of new financial instruments like Real Estate Investment Trusts (REITs) and Exchange Traded Funds (ETFs).
To further facilitate investment, the process for opening Non-resident Investor's Taka Accounts will be simplified, and the quality of corporate disclosures and financial reporting will be improved. The government is also looking at shortening the settlement cycle for share transactions and integrating information systems across relevant financial entities.
Finally, the government is reviewing the introduction of a specialized dispute resolution mechanism for capital market-related cases, with the potential establishment of a special tribunal or fast-track court to enforce its decisions.