An Overview of the Capital Market of Bangladesh: Based on the Present Scenario

Abstract

Capital market is the promoter of economic expansion of a country. This study is basically an attempt to have a total overview of capital market of Bangladesh based on the present situation, trends and volatility of the market. And also is an assessment of the previous and recent downward trend in the capital market along with the initiatives taken by the government to address the downturn of the market. An analysis of capital market depends on the observed trends in market capitalization, investment capitalization ratio, turnover, volatility of share index, the number of listed companies and monetary policy. Generally, the size of market is positively correlated with the ability to mobilize capital and diversify risk of an economy. In addition, market capitalization ratio equals the value of listed shares divided by GDP. So market capitalization to GDP ratio can be used as an indicator of market development. The study is conducted on secondary data with limited time and scope. Capital market of Bangladesh is going through a very sensitive situation. Continuous fall in the capital market not only destabilized the entire capital market but also has drugged out a huge number of small investors from the market leaving behind their investment. So, this study is also focused on identifying the problems and suggests some effective solution for a healthy economy with sound investment environment.