Dr. Salehuddin Ahmed, Finance Adviser, has said that it is wrong to assume that the capital market will always generate profits. He warned that if someone treats it as a permanent source of income, it could bring danger for investors. While there are opportunities for gains in the capital market, there are also risks of loss. Therefore, investors must be aware that buying shares and bonds sometimes means sharing in losses too.
Dr. Ahmed made these remarks at a seminar titled “Revealing Bangladesh’s Bond and Sukuk Market: Revenue Sector, Infrastructure Supply, and the Development of the Islamic Money Market,” held on Monday in the auditorium of the Dhaka Stock Exchange in the capital.
He said Bangladesh’s capital market is still underdeveloped. Although there is a government bond segment, participation from the private sector is very low, and the share market is almost negligible. As a result, when large projects need financing, the dependency is only on banks, without risk-sharing. This leads to defaults on loans and misuse of funds, which is a very serious problem for the country. Dr. Ahmed added that to properly share risks, people have to invest in bonds, debentures, and shares. Merely borrowing from banks and misusing those funds is not the solution. Thus, private sector involvement in the capital market must be ensured, and investors must understand that while there are risks, there is also potential profit.
He noted that there are about 24,000 crore taka worth of bonds in the Sukuk market, but because they are being used in sectors like education and sanitation, returns are low. If those bonds were invested in private sector, productive projects, they could yield benefits and reduce pressure on banks. He emphasized that Sukuk must be truly asset‐based in order to build confidence among investors.
The Finance Adviser also said that securitization has not yet become effective in Bangladesh. He argued that for large projects like the metro rail, using such processes could reduce dependence on World Bank loans. He cautioned that pension funds and gratuity funds need to be handled carefully because they are government liabilities.
Dr. Ahmed stressed that it’s not only the capital and Sukuk markets that need attention, but also the insurance market. At the same time, tax structure and incentives should be reformed to restore confidence among private investors.
At the seminar, other speakers included Dr. Anisuzzaman Chowdhury, Special Assistant to the Finance Ministry’s Senior Adviser; Ahsan H. Mansur, Governor of Bangladesh Bank; and Khandkar Rashed Maksud, Chairman of the Bangladesh Securities and Exchange Commission, among others.