The capital market can help achieve the SDGs: experts

The stock market, insurance and pension funds could actively help finance the roughly $ 928 billion that Bangladesh needs to meet its Sustainable Development Goals (SDGs) by 2030, as bank loans alone will not be enough. not, various experts said yesterday during a webinar.

The country needs an additional $ 928.48 billion from 2017 to 2030 to implement the SDGs, according to the findings of a recent study.

The webinar on “Sustainable Finance in Bangladesh: Strategies and Options for Implementation” was organized by the Bangladesh Association of Listed Companies (BAPLC).

“Bangladesh aims to meet its SDGs during this period, but we need a wonderful economy with a solid foundation for this purpose,” said Prof. Shibli Rubayat Ul Islam, Chairman of the Bangladesh Securities and Exchange Commission. (BSEC).

The banking sector alone cannot provide the necessary long-term financing because it puts undue pressure on the industry when the stock market, insurance and pension funds could be a remedy in this regard.

In addition, BSEC has worked to make bond markets, mutual funds and secondary stock markets more dynamic.

As such, the national stock market has various fundraising boards, such as the alternative trading board and the SME board, in addition to the main board.

“We are also bringing new products so that the stock market can be a strong source of sustainable finance,” Islam said.

Eunusur Rahman, chairman of the Dhaka Stock Exchange (DSE), said Bangladesh would need around Tk 78,92,000 crore by 2030 to meet the SDGs.

In other words, around 480,000 Tk crore is needed each year for this period. “So how can this fund be financed? Rahman asked.

Since the banking sector suffers from a high rate of bad loans, it will not be able to provide adequate financing.

Likewise, the insurance industry is also not a viable option but here the stock market has enormous potential.

When people have confidence in the market it can make great contributions, as has been proven in recent times with the market cap of DSE having increased by over Tk 220,000 crore in the past year.

“Thus, a huge demand for financing can be met by the stock market if successful private sector companies come to the market to raise funds,” said the president of the DSE.

“Apart from the five basic needs, the financing of entrepreneurship must be considered as a basic need of the population, but we cannot guarantee financing for all,” he added.

Bangladesh’s GDP to market capitalization ratio is still very low at 21 percent while it stands at 76 percent in neighboring India.

“So there is a huge opportunity to expand the market and the source of funding,” said Shaikh Shamsudding Ahmed, BSEC commissioner.

The number of listed companies in the country, which currently stands at around 390, is also expected to be increased.

“This is a collaborative approach and therefore we must all work together to bring highly reliable and solvent companies to market,” he added.

Many companies submit audit reports that do not describe the actual scenario of their business and contain price sensitive information, which creates the possibility of scams.

“We are therefore working to ensure good governance as a whole so that the stock market can attract investors and play a central role in long-term sustainable financing,” said Ahmed.

Corporate boards must be quick to ensure adequate environmental, social and corporate governance (ESG), he said.

Sustainable finance could contribute to the implementation of the sustainable development goals, said Asif Ibrahim, chairman of the Chittagong Stock Exchange (CSE).

The money market, which refers to the trading of very short-term debt securities, and the stock market as a whole could help boost ESG in the country with adequate funding.

In addition, green financing should be more easily accessible to all, he added.

“If we can issue green bonds, it would attract ESG investors from overseas,” said Anis Ud Dowla, chairman of ACI Limited.

Regarding the country’s post-Covid recovery, he said it would be a slow and painful process, with many countries having already revised their plans.

“We must also review our plans taking into account poverty reduction, job creation and environmental protection,” he added.

Bangladesh is one of the most environmentally affected countries in the world, according to Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry.

“The pressure will be higher in the years to come, so we cannot avoid environmental problems in our business,” Kabir said, adding that the capital market is now in good hands and could contribute to sustainable finance. long term.