TOWARDS A MORE SUSTAINABLE DEVELOPMENT OF THE STOCK MARKET AND MERCHANT BANKING SYSTEM IN BANGLADESH – A DESCRIPTIVE ANALYSIS

Abstract

Merchant banks around the world carry out a significant role in the development of the capital market. Strong nstitutional support is necessary for a vibrant capital market which is the core of economic development in any market based economic system. Right now, there are Thirty one (31) Merchant banks in operation. Lot more is waiting for getting license from Securities and Exchange Commission. The positive trend of Capital market allures these Merchant Banks to enter into the Capital Market for Merchant Banking operations. Many foreign banks are thinking about opening up a Merchant banking wing. So there is a huge potentiality of Merchant banking operation in Bangladesh. This paper examines the state of Merchant Banking operations in Bangladesh and its prospect. The study basically examines the conductivity of the capital market for the operation of a Merchant Bank in Bangladesh. Merchant Banking has become one of the widely recognized Financial & Informational Intermediaries for the development and efficient functioning of the capital market. It smoothes the function of the capital market and establishes a mechanism through which investors feel confidence and thereby act as a helping hand or intermediary for making bridge between the Capital market and the investors. The prospect of Merchant Banking depends on the performance of the Capital market. In this paper we conclude that over the last four years, Capital market has been performing very well as a mean to open the potentialities of the squeezed Merchant banking operation.

Key Words: Leveraged Buyout, DSE, CSE, Initial Public Offering, Market Capitalization