Bangladesh bourses give highest return among peers

Bangladesh's capital market is giving the highest return among its peer countries and is ready to catch up with the country's real economic growth.

So, it is the best time for foreign investors to board with the fast-growing capital market, said, Shibli Rubayat-Ul-Islam, chairman at the Bangladesh Securities and Exchange Commission (BSEC) at the roadshow titled "The Rise of Bengal Tiger: Potentials of Trade and Investment in Bangladesh" on Monday.

This is the third road show that was held in Zurich, Switzerland.

While giving a presentation on Bangladesh's economy at the event, he said Bangladesh's bourses were the best performer last year among peer countries with the highest return of 23%, while the return was 15.5% in India, 5,2% in Pakistan, 9.5% in Sri Lanka, 14.6% in Vietnam. 

A research by AFC Asia Frontier Fund released on 8 August 2020 showed that the Dhaka Stock Exchange (DSE) was the best performer globally with a gain of 15.8%. Lower interest rate, increasing exports and remittances and the reopening of the economy led to the rally. 

The country's premier bourse again performed the best among Asian frontier markets in May this year, according to Asia Frontier Capital. 

DSEX, the broad-based index at the DSE, gained more than 9.3% that month, while key indices in the markets of Pakistan, Vietnam, China, the Philippines, Kazakhstan, Sri Lanka, Thailand, and Indonesia lagged behind with lower gains, it said. 

Inviting foreign investors to Bangladesh, Shibli Rubayat said Bangladesh's capital market is the best for investment for four reasons - fast economic growth, shock absorbing capability against global volatility, stable foreign exchange rate with favourable interest rate trend and no pre-approval for repatriation. 

Displaying the country's economic condition in his presentation, he said inflation is low at 5%-6% and debt to GDP ratio is lower than in any peer countries. 

The current account balance is in a comfortable position with good inflows of remittances and export earnings.

Export earnings, which were disrupted owing to the pandemic, have bounced back fast, reflecting the country's economic resilience, he pointed out.

Political stability is the major preferable indicator for foreign investors as the result of political stability is continuation of policy stability, the BSEC chairman said.

Moreover, the country's rating, assessed by foreign agencies, is improving gradually.

"We have a business-friendly government and well-trained human capital. So, foreign investors can come to Bangladesh with their technological support," he said.

Inviting foreign investors to Bangladesh, land minister Saifuzzaman Chowdhury said the country's economy is now stable, which is good for investors. 

Finance secretary Abdur Rouf Talukder said Bangladesh is one of the fastest growing countries in Asia, thanks to continuous policy support from the government. 

Presenting money market indicators, he said the lending rate was above 14% in 2012, which has now come down to 7%. 

Budget deficit is 5%, short-term loan 3% to GDP, and debt to GDP ratio 40%, which is less than half compared with neighbouring countries. 

All these indicators suggest macroeconomic stability, which is preferable for investment, he said.

The BSEC will hold another road show event in Geneva on 22 September.

The BSEC has launched a plan to organise a series of roadshows to showcase Bangladesh capital markets and trade and investment opportunities in Bangladesh to global investors in different countries. 

The campaign's prime agenda is to portray Bangladesh and its capital market as an attractive place for foreign investment with higher returns and Bangladesh as a new production hub. 

The first roadshow was successfully held in Dubai, UAE earlier this year and received overwhelming responses from both non-resident Bangladeshis (NRBs) and foreign institutional and individual investors.

With the enthusiastic participation of NRBs, investors, officials and delegations from home and abroad, the second roadshow was successfully organised in four major cities of the United States from 26 July to 2 August 2021 where Bangladeshi representatives showcased the country in New York, Washington DC, Los Angeles and Silicon Valley of Santa Clara and raised interests of investors towards Bangladesh.

In succession, Bangladesh high-level delegates and business leaders reached the roadshow's third destination, Switzerland. 

Md Nazrul Islam, executive chairman of Bangladesh Export Processing Zones Authority , Md Alamgir Hossain, member of the National Board of Revenue, Dr Shaikh Shamsuddin Ahmed, commissioner at the BSEC, Mafiz Uddin Ahmed, additional secretary to the Financial Institutions Division, Dr Md Harun Or Rashid Biswas, director general of the Department of Cooperatives, Sheikh Kabir Hossain, president of the Bangladesh Insurance Association, and Arif Khan, former commissioner of the BSEC and capital market specialist also attended the Zurich roadshow to elaborate Bangladesh' capacity and opportunity of investment.

Besides, Md Abul Hossain, managing director of the Investment Corporation of Bangladesh and Abu Salem Mohammed Shahab Uddin, deputy general manager of Foreign Exchange Investment Department, Bangladesh Bank, participated in the programme. 

The private sector leaders, including multinational company senior officials, domestic business leaders and industry players also joined in showcasing Bangladesh to foreign investors and NRBs of Switzerland.