Description

The performance of existing financial products is an important issue in the capital market to increase the new products for reducing the risk of dependency on common stocks. There are only five products traded in the capital market of Bangladesh including three types of bonds. There is a lot of scope in the market for absorbing the new products. The share of common stocks, treasury bond, corporate bond, debentures, mutual funds to total market capitalizations are 85.36%, 13.49%, 0.14%, 0.01% and 1% respectively. The market is common stock based. The corporate bond market is very small. So, there should be increased new financial instruments in the capital market to reduce the dependency on share only. Various types of preferred stock, bond, SWAP, option, futures, and forwards can be used in our markets. Moreover, Bangladesh should also venture into providing various types of capital market services apart from products.