Bangladesh's capital market is underperforming its potential — and investor confidence is the first casualty.
As someone working closely with this market, here are nine immediate, actionable steps I believe can restore trust, attract investors and stabilize the market in the short term.
1. Form a Financial Sector Stability Council
An inter-agency body — Finance Ministry, Bangladesh Bank, BSEC, NBR, IDRA and Invest Bangladesh — should coordinate macro-prudential policy, with BSEC as secretariat.
2. Direct-list government stakes in MNCs
List a minimum 10% of government-held shares in multinational companies within three months, at market-determined pricing. It would deliver an immediate credibility and liquidity boost.
3. Enable temporary institutional participation
For one to two years, mandate state-owned and private banks and financial institutions to invest through dealer accounts on a tax-exempt basis — a clear signal of institutional confidence to retail investors.
4. Introduce a short-term tax incentive
Provide zero capital-gains tax for qualifying institutional investments, paired with a one-year minimum holding period, to stimulate turnover.
5. Rationalize capital-gains tax
Adopt a graduated structure: 10% at six months, 5% at one year and 0% beyond two years. The policy should reward patient capital.
6. Simplify taxation for foreign investors
Use a final-settlement, turnover-tax model with a clear exit policy to improve compliance and ease of doing business.
7. Reduce index-phobia
Introduce segmented large-cap, mid-cap and small-cap indices within three months for a truer read of market sentiment.
8. Develop sectoral indices
Enable sector-specific tracking and investment strategy within six months.
9. Enable treasury-bond trading on stock exchanges
Coordinate Bangladesh Bank, BSEC and the exchanges to bring T-bond supply into DSE and CSE secondary markets, increasing bond-market turnover.
These are short-term interventions, not a substitute for long-term structural reform. But they can create quick wins on liquidity, morale and regulatory trust while deeper reforms take shape.