Problem, Prospect, and Challenges in Bangladesh Bond Market

Abstract

One of the reasons that the stock market in Bangladesh is volatile because the market is less diversified. Bangladesh Capital market is frontier in nature and the market is heavily dominated by equity products. Worldwide stock/Equity is much riskier compared to bond/debt, as equity is more dominant in the market, its risk is not possible to shift it elsewhere. Developing a vibrant Capital Market there is no alternative to the bond market. According to the Seven Five-Year Plan (7FYP), one of the major goals of Bangladesh governments’ is to build a dynamic bond market for the stock market advancement. A strong bond market not only ensures long-term finance but also reduces dependence on banks and other Financial Institutions. Besides, there is a less volatility in bonds as well as the limited risk associated with it. This article attempts to analyze the problem, prospect, and challenges of Bond Market in Bangladesh.