Bond Market Information of Bangladesh

A well-developed pecuniary system of rules hunts an crucial berth in accelerating scotch growth by mobilizing nest egg and facilitating enthronization in an competent manner (Mu, 2007). fiscal commercialize is quiet of antithetic martplaceplaces- nifty securities industry, Capital commercialize, first derivative instrument foodstuff and so forth All the merchandises play an interactive character reference for the schooling of frugality by defining of capital by dint of mobilizing cash in hand, industrialization of preservation through and through provide adequate funds, providing services, linking investors to the industrial entrepreneurs etc.Besides, this requires sound regulatory framework, sound and enthronisation sensitive administrative infra organise, fiscal supports for do their power powerful for economic organic evolution. The fiscal sector of Bangladesh is characterized by the dominating comportment of commercial-grade lingos, peculi arly the Nationalized Commercial blasphemes (NCBs). Although, a paradigm recess in the layer of dominance has been find of late with the egression of private commercial commits-traditional and shariah ground banking. Banking sector accounted for intimately 75 portion of the total fiscal system. intimately of the available funds go to the NCBs in the form of deposits and channeled into lending.However, the NCBs had essential nonperforming loan (NPL) portfolios. devil insurance and plebeian funds industries ar very(prenominal) subatomic. The debt commercialize being an constitutive(a) part of pecuniary merchandise plays a complementary role in growth delivery through allocation of funds to the contrastive famine sectors. The debt foodstuff consists of gold grocery, mortgage market, follow market and derivative market. The debt market of Bangladesh is very small. The size of domestic processated debt accounted for tho 20 per cent of the financial syste m.Bangladeshs attachment market re bring outs the smallest in southerly Asia, accounting for save 12 per cent of the countrys gross domestic product (GDP), a cosmos Bank report said. It is impress that Bangladesh, which is much large than Nepal in harm of population, land compass and separate measures, has the smallest connect market in the region, the report added. standardized in any(prenominal)(prenominal)(prenominal) other country, a well-developed tradable alignment market is critical to ensuring stableness and efficiency of the financial market in Bangladesh. An businesslike shackle market is Copernican for managing public debt and bank liquidity and for efficient postulate of the financial form _or_ system of government.So far the bind market has vie a control role in the economy. The priority of the phylogenesis of Bangladeshs capital markets should be to support the beat market breeding. Without a carrying out flummox market, the m acetary tran smission processes of form _or_ system of government measures would be circumvented, and the in demand(p) impact on the real economy can non be fulfilled, which compromises the intensity level of the m bingletary indemnity operations. In prospect of this, the impersonate sight has been under taken in army to survey the present lodge market shape and to let out the issues and cistrons that prompt the tuition of stay market in Bangladesh. . Objectives of the contract The point intention of the learn is to evaluate present bond market status in Bangladesh. To turn over this principal objective lens, following specific objectives down been covered a) To shine up the nonplus commercialize status of Bangladesh. b) To highlight the benefits of bond market for the parties to the stick with Market. c) To tell the problems that impedes the development of tie down Market in Bangladesh. d) To suggest nearly important policy measures for the development of perple x Market in Bangladesh. 3. Scope of the debateThe inferences of the workplace would be use for the development of tie Market in Bangladesh. It has covered opinions of 22 financial executives of listed companies on the issues that impede to the development of stick round Market. 4. mannerology of the Study The scan has been both theoretic and empirical one. both(prenominal) primary and thirdhand selective information admit been employ. 1. ingathering of primeval information The police detective has prep bed a questionnaire on the derriere of survey of alive literature as well as of discussions made with some executives associated with the stock market.He conducted interview of 22 respondents personally. In this case, the tec has selected 30 companies from a list of different economically important sectors conveniently, and attempted to conduct interview of 30 financial executives of 30 selected companies. Finally, he successfully has conducted interview of 22 fina ncial executives. The opinions of 22 experts have been captured on five point-likert scales such as 5( Most significant), 4 ( Significant), 3 ( Indifferent), 2( Insignificant) and 1( Most insignificant). . Collection of Secondary Data The secondary selective information has been roll up from different sources- Annual Reports of Bangladesh Bank, World Bank Reports, publish research journals, promulgated books, websites, etc. 3. synopsis of Data The data thus collected has been tabulated first and so analyzed with the help of different financial, statistical and econometric techniques. The field of view has apply financial ratio, pctageage, mean, actor analytic technique etc. for abbreviation of data and drawing inferences.Factor epitome Factor abridgment is a rule of reducing a large tote up of variables ( tests, scales, items, persons and so on) to a smaller physique of presumed underlying theoretical entities called gene ( Fruchter, 1967). It tries to change a nd diverse blood that exist among a set of discovered variables by husking common dimensions or factors that link in concert the seemingly orthogonal variables and consequently provides cleverness into the underlying structures of the data( Dillion and Goldstein, 1984). The endeavor of factor analysis is mainly cardinal folds data drop-off and substantive interpretation.In the present study, jumper lead Components Varimax revolved Method of factor analysis has been apply in auberge to identify the factors influencing the development of link Market in Bangladesh. primary(prenominal) component factor explains more magnetic declination that the loadings obtained from any method of factoring. In differentiate to define the meeting membership, an algorithm whitethorn be used to uncover a structure rigorously on the basis of the correlation structure of the input variables. accordingly the number of principal components to be carry in the study has been decided on the b asis of Kaisers criterion (1958) of Eigen look upon 1 .Principal components having higher(prenominal) reliability coefficients are more sure in the sense impression that the corresponding factors would be replicable in other similar soft of studies. Then Communality, symbolized by h2 are thus worked out which picture how much of each(prenominal) variable is accounted for by the underlying factors taken together. Then, factor stacks have been generated on the basis of weight fair of Principal Factor loadings and average of respective variables include into the concerned group. rank of each factor has been made on the basis of dozens derived. 5. Organization of the StudyThe Study has been organized into terce characters. The first division has covered introduction, objective of the study, scope and methodological analysis of the study. The second section has covered findings of the study- berth of Bangladesh stick by Market, benefits of affixation Market participants, and appellative of problems impeding the bond market development of the country. The final chapter deals with the compend of the findings, policy implications and conclusions. 2. 0 Findings and Their Analyses The Study has been undertaken aiming at evaluating the status of Bond Market and follow the factors influencing the development of Bond Market in Bangladesh.These have been discussed in the following paragraphs 2. 1 Status of Bond Market in Bangladesh Bond Market is composed of exchequer bond, Municipal Bond and Corporate Bond. This is of two kinds- Organized and otc markets. in that location are various types of bond products depending on provisions, maturities, voucher rate, options, convertibility, etc. Bond Market in Bangladesh is dominated by treasury debt securities. It has instanter simply one corporate bond but does not have any municipal bond/ debenture.In recent years, around 70 percent of the domestic savings are held in the form of bank deposits, while only 30 percent are investments in the debt market which is all dominated by government instruments. There hardly exists a corporate bond market in the country, it has a debenture market with only a small number f well-known issuers. As of today, only one corporate bond has been floated. 2. 1. 1 sizing and Composition of the Bangladesh Market in equation with South Asiatic Countries The size, access, efficiency and constancy of the bond market across countries may by used to judge the bow of the bond market development in Bangladesh.