It is necessary to develop an integrated system of money market and capital market for building a sustainable market structure, said Chittagong Stock Exchange (CSE) Chairman Asif Ibrahim on Sunday.
"Financial market structure is largely dependent on the banking system or the money market that keeps a negative impact in our economy", Asif said citing that, therefore short and medium term goals can be set within the budget framework for capital market development.
He was addressing a pre-budget press conference at the Chittagong Stock Exchange on Sunday.
He presented a set of recommendations in a written statement on behalf of the stock exchange.
"Currently 349 companies are listed in the capital market. A satisfactory number is required to be raised within the next five years. A stable and strong bond market is essential for infrastructure development and long-term financing. Increasing the capacity of market intermediaries and the number of investors for capital markets", he added.
Chittagong Stock Exchange MD Saifur Rahman Majumdar answered various questions of journalists in the press conference conducted by CSE Director Major Emdadul Islam. CSE Director Naqib Uddin Khan and Akhtar Parvez Hiru were present.
Asif further said that the difference in corporate tax rates of listed and unlisted companies should be increased by at least 10 percent. Providing tax exemption for 2-3 years to newly listed companies. The size of the country's corporate bond market is very small. A functioning bond market needs to be established with appropriate incentives. Interest on listed bonds is required to be paid to the investor tax-deductible.
Also providing tax concessions including full tax exemption on Blue Bonds and Green Bonds to encourage domestic and foreign institutional investment. Elimination of double taxation on dividends to increase the number of institutional and individual investors in the market.
Withdrawal of capital gains tax on institutional investors and avoidance of new taxation.
CSE Managing Director Saifur Rahman Majumder said that the country's corporate financing is dependent on the banking system. As a result some mismatches are seen.
