Prospect and challenge in Bangladesh Capital market .

1. FINANCIAL MARKET PROSPECTS AND CHALLENGES IN
BANGLADESH
Prepared by Mostafizur Rahman
Intake: 40
Section: A
ID: 21-030

2.  FINANCIAL MARKETS
Financial markets is a marketplace
where securities and assets are
traded . Including
money market
Bond market
Stock market
Commodity market
Foreign exchange market
Insurance Markets

3.  FINANCIAL MARKETS IN BANGLADESH
There are three types of
financial markets in
Bangladesh. They are:
Money Market
Capital Market
Foreign Exchange Market

4.  FINANCIAL MARKETS IN BANGLADESH
Money market : Money market is a financial market where short-term assets
and securities are traded . Generally one year or less . Such as money market
mutual funds commercial paper, Treasury bills.
Capital market : Capital market is a financial market where long-term assets
and securities are traded . Generally one year or grater . Such as Dhaka Stock
Exchange (DSE) and Chittagong Stock Exchange (CSE)
Foreign exchange market : Foreign exchange market is a financial market
where the buying and selling of global currencies which one currency is
exchanged for another currency . Such as British pound and the U.S. dollar .

5.  PROSPECTS OF FINANCIAL MARKET IN BANGLADESH
Capital Formation: Capital formation is the net accumulation of capital
goods, such as equipment, transportation assets during an accounting period for a
particular country. The higher the capital formation of an economy, the faster an
economy can grow its aggregate income.
Allocation of Resource: allocation of resources, apportionment of productive
assets among different uses. Resource allocation arises as an issue because the
resources of a society are in limited supply, whereas human wants are usually
unlimited, and because any given resource can have many alternative uses.

6.  PROSPECTS OF FINANCIAL MARKET IN BANGLADESH
Rick Management: Risk management is the process of identifying, quantifying,
and managing or mitigating potential risks faced. Risk management is undertaken
by all players within the financial services ecosystem, including investment
managers, investment banks, retail banks, insurance companies, among others.
Economics growth: Financial markets provide liquidity, capital, and
participation that are essential for economic growth and stability. Without financial
markets, capital could not be allocated efficiently, and economic activity such as
commerce and trade, investments, and growth opportunities would be greatly
diminished

7.  CHALLENGES OF FINANCIAL MARKET IN BANGLADESH
lack of market depth and liquidity: The market is relatively small
compared to its regional counterparts, resulting in limited trading volumes . This
lack of liquidity makes it difficult for investors to buy or sell securities at fair prices,
potentially leading to price manipulation and increased market volatility.
Limited Investor Awareness and Education: Many potential investors,
particularly retail investors, lack sufficient knowledge about investing in the
financial market, including understanding different financial instruments, risk
management, and the importance of diversification.

8.  CHALLENGES OF FINANCIAL MARKET IN BANGLADESH
Regulatory Environment and Corporate Governance: The regulatory
environment and corporate governance practices in Bangladesh also present
challenges to the capital market. Robust corporate governance practices,
including accurate financial reporting, timely disclosure of material information,
and independent board structures, are essential to build investor confidence and
attract both domestic and foreign investments.
Insufficient Market Infrastructure: Upgrading the market infrastructure,
implementing modern trading platforms, and streamlining settlement procedures
can enhance operational efficiency, reduce risks, and attract more market
participants. In Bangladesh the financial market infrastructure requires significant
improvements to support efficient trading and settlement operations .

9.  CHALLENGES OF FINANCIAL MARKET IN BANGLADESH
Market Manipulation and Insider Trading: Market manipulation and
insider trading pose serious challenges to the integrity and fairness of the Financial
market in Bangladesh. Unethical practices such as price rigging, front-running, and
insider trading, erode investor trust and deter potential investors from participating
in the market. Authorities need to enforce stringent regulations, introduce
surveillance mechanisms, and conduct regular audits to identify and punish those
engaged in such malpractices.

10. THANK YOU