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Private sector’s role in attaining SDGs

Answer lies in ‘long-term funds from stock, bond markets’

FE REPORT | Published: December 13, 2019 11:03:17


Dr AB Mirza Azizul Islam (centre), former adviser to the caretaker government, addressing the plenary session on ‘Innovative Finance to Achieve Inclusive and Sustainable Business and Investment: Capital Market Development, Blended Finance and FinTech’ at a city hotel on Thursday

Vibrant bond and stock markets hold the key to meeting the financing need of the country's private sector in attaining the sustainable development goals (SDGs), discussants said on Thursday.

They also attached importance to branding of a functional domestic bond market to attract foreign investors and launch offshore bonds for that purpose.

They spoke at a session of the three-day Asia Pacific Conference on Financing Inclusive and Sustainable Development at a city hotel.

The International Chamber of Commerce, Bangladesh (ICCB) organised the conference in collaboration with the United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP), the Asian Development Bank's Trade Finance Programme, and the London Institute of Banking and Finance.

"The greater portion of the short term financing comes from the bank deposits. It creates mismatches when the banks finance for the long term," said Dr. AB Mirza Azizul Islam, a former caretaker government advisor.

Mr. Islam, who chaired the session, said the development of the stock and bond markets is very important to ensure long-term financing.

"Unfortunately, the performance of the capital market is not up to the mark," Mr. Islam said.

Alamgir Morshed, managing director and head of commercial banking of Standard Chartered Bank, said infrastructure financing is a challenge for the country despite many success stories in other areas.

"We must have alternative sources like bonds to avoid dependence on the banking sector," Morshed said.

He further stressed the need for a financial eco-system and participation of all in development of the bond market.

"Sometimes the prices of the shares of weak companies increase and the prices of the shares of companies having good fundamentals decline," Mr. Murshed said. He emphasised financial literacy of investors.

He also said development of bond and stock markets should be a collective agenda for all bodies such as Bangladesh Bank, National Board of Revenue (NBR) and the Bangladesh Securities and Exchange Commission (BSEC).

Wendy Jo Werner, country manager of International Finance Corporation (IFC), said development of the domestic bond market is very important to attract investors through offshore bonds.

She said branding of the domestic bond market would help the country achieve the target in the offshore markets.

She also stressed the need for financing for female entrepreneurs.

K A M Majedur Rahman, former managing director and chief executive officer of Dhaka Stock Exchange, said the country's capital market is yet to play a significant role in achieving the SDGs.

He said DSE, the premier bourse of the country, has so far formed some platforms for trading in bonds, raising capital through a small cap board and an alternative trading board for non-listed companies.

"Unfortunately, the outcomes of these platforms are yet to be visible for different reasons," said Mr Rahman. The bourses play a vital role in long-term financing.

Nguyen Phi Van, Chairwoman of Vietnam Angel Network of Ministry of Science and Technology, said the role of private sector is very important in achieving the SDGs.

While speaking about some success stories of Vietnam, she stressed the need for venture financing to accelerate the startups and financial eco-system.

Dr Tissa Jayaweera, managing partner of TJ Associates and former chairman of ICC Sri Lanka, and a representative of ADB, also spoke at the programme attended by top officials of different banks and financial institutions.

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