...Trends of Foreign Direct Investment in Bangladesh CHAPTER ONE Background of the Study 1. Introduction 1.1 Introduction Foreign Direct Investment (FDI) is considered as one of the vital ingredients for overall development process of a developing Bangladesh. country like Industrial development is an important pre-requisite growth country. of for a economic developing is Bangladesh basically a country of agrarian economy. For her economic development, industrial economy is imperative. So Bangladesh is gradually moving from agrarian economy to industrial economy. In the age of globalization, it has become a burning issue to exchange views, ideas, capital and human resources. Government of Bangladesh is trying to create a favorable investment environment through introducing economic policies, incentives for investors, promoting privatization and so on. Therefore, the contribution of FDI is necessary in the enhancement of a country‟s economic growth. Researchers have marked FDI as an important factor in accelerating economic success and wealth of a country as well as a door in creating jobs, facilitating economy, and creating more competitive environment and contributing productivity to the host country. 1 Trends of Foreign Direct Investment in Bangladesh In Bangladesh, FDI plays a significant role in GDP acceleration and economic growth (Mottaleb 2007). FDI has a mentionable role in the modernization of the Bangladesh economy for last two decades. It helps the country...
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...Bangladesh Economic Update Foreign Direct Investment (FDI) February 2012 Bangladesh Economic Update Volume 3, No. 2, February 2012 Acknowledgement: Bangladesh Economic Update is an output of the Economic Policy Unit of the Unnayan Onneshan, a multidisciplinary research centre based in Dhaka, Bangladesh. The report is prepared by a team, under the guidance of Rashed Al Mahmud Titumir and Palash Kanti Das. The team comprises Nibedita Roy and A. Z. M. Saleh. © Copyright: Unnayan Onneshan-The Innovators The content of this publication may be reproduced for non-commercial purposes with proper citation (please send output to the address mentioned below). Any other form of reproduction, storage in a retrieval system or transmission by any means for commercial purposes, requires permission from the Unnayan Onneshan-The Innovators. For orders and request please contact: Unnayan Onneshan - The Innovators 16/2, Indira Road, Farmgate Dhaka-1215, Bangladesh Tell: + (880-2) 8158274, 9110636 Fax: + (880-2) 8159135 E-mail: info@unnayan.org Web: www.unnayan.org Bangladesh Economic Update, February 2012 2|P a g e Bangladesh Economic Update Vol. 3, No. 2, February 2012 Economic Policy Unit Unnayan Onneshan 1. INTRODUCTION The current issue of the Bangladesh Economic Update focuses on the magnitude, dynamics, sectoral distribution, and countrywise sources of FDI inflow in the country. The flow of foreign direct investment is of utmost importance in the current backdrop of overall...
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...BANGLADESH STOCK MARKET GROWING? KEY INDICATORS BASED ASSESSMENT M Khokan Bepari Assistant Professor Department of Cooperation and Marketing Faculty of Agricultural Economics & Rural Sociology Bangladesh Agricultural University, Mymensingh-2202, Bangladesh Phone: +88 01716601759 khokan552@yahoo.com Dr. Abu Mollik Senior Lecturer and Finance Discipline Leader School of Commerce and Marketing Division of Business and Informatics Central Queensland University abumollik@yahoo.com.au Abstract This paper focuses on the growth of Bangladesh stock market over time. The market trends in terms of market capitalization, market liquidity, market concentration, number of listings, volatility in the market index and foreign portfolio investment were considered. The study finds that key indicators are significantly correlated. Stock market growth index is constructed considering market capitalization ratio; turn over ratio, value traded to GDP ratio and volatility in market index. The findings of the study suggest that although Bangladesh stock market is growing over time, the growth has not yet assumed any stable and obvious trend. We conclude that Bangladesh stock market is still at an early stage of its growth path with a small market size relative to GDP and is characterized by poor liquidity and high market concentration. Introduction Demirguc-Kunt and Levine (1996), Singh (1997) and Levine and Zervos (1998) find that stock market growth plays an...
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...BANGLADESH STOCK MARKET GROWING? KEY INDICATORS BASED ASSESSMENT Abstract This paper focuses on the growth of Bangladesh stock market over time. The market trends in terms of market capitalization, market liquidity, market concentration, number of listings, volatility in the market index and foreign portfolio investment were considered. The study finds that key indicators are significantly correlated. Stock market growth index is constructed considering market capitalization ratio; turn over ratio, value traded to GDP ratio and volatility in market index. The findings of the study suggest that although Bangladesh stock market is growing over time, the growth has not yet assumed any stable and obvious trend. We conclude that Bangladesh stock market is still at an early stage of its growth path with a small market size relative to GDP and is characterized by poor liquidity and high market concentration. Introduction Demirguc-Kunt and Levine (1996), Singh (1997) and Levine and Zervos (1998) find that stock market growth plays an important role in predicating future economic growth in situations where the stock markets are active. The arguments of Demirguc-Kunt et al. (1996) indicate that economies without well-functioning stock markets may suffer from three types of imperfections: first, opportunities for risk diversification are limited for investors and entrepreneurs, second, firms are unable to optimally structure their financing packages and third, countries...
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...POTENTIALITY OF FDI INFLOW IN BANGLADESH 1. INTRODUCTION Foreign Direct Investment (FDI) is considered as one of the crucial ingredients for fostering economic development of a developing country. Countries that are lagging behind to attract FDI are formulating and implementing new policies for attracting more investment. Even compared to other South Asian countries, FDI inflow to Bangladesh has traditionally been lower. Foreign direct investment (FDI) is investment directly into production in a country by a company located in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is done for many reasons including to take advantage of cheaper wages in the country, special investment privileges such as tax exemptions offered by the country as an incentive to gain tariff-free access to the markets of the country or the region. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds. 2. TYPES OF FDI As a part of the national accounts of a country FDI refers to the net inflows of investment. There are two types of FDI: inward foreign direct investment and outward foreign direct investment, resulting in a net FDI inflow (positive or negative). Inward FDI occurs when foreign capital is invested in local resources. The factors propelling the growth of inward...
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...Executive Summary Foreign Direct Investment is one of the vital force to boost up the economy. In this project report I would like to draw a current scenario of Foreign Direct Investment in Bangladesh. In this regard I present the most updated data, avoid the uncompleted data and use the best judgment at the time of presenting the data to better knowing the current trend about the Foreign Direct Investment in Bangladesh. I prepared an overview of “Foreign Direct Investment in Bangladesh” based on secondary data and information. For this specific purpose I collected data and information from various sources like published materials such as the Bangladesh Economic Review, Different articles of Board of Investment (BOI) and Bangladesh Export Processing Zone (BEPZA), Daily Statement of Affairs of different Internet based publication and other books on Foreign Direct Investment in Bangladesh and articles related to Foreign Direct Investment in Bangladesh. I furnished the full contents of the report in eight chapters. I concentrated on arranging and putting the data in such a way that the report progressively anchors to a desired destination of understanding. Introduction Part-1 Investment has acquired considerable emotive force in any country. It is viewed as beneficial on employment creator-as it brings about economic development. It can termed capital flowing from a firm or individual within the country or in one country to a business or businesses in another country involving...
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...Major Determinants and Hindrances of FDI inflow in Bangladesh: Perceptions and Experiences of Foreign Investors and Policy Makers An assignment on Major Determinants and Hindrances of FDI inflow in Bangladesh: Perceptions and Experiences of Foreign Investors and Policy Makers Submitted To: S. M. Zahidur Rahman Associate Professor Submitted By: Tasnuba Nowrin ID-090316 Fatema Khatun ID- 090349 KHULNA UNIVERSITY Business Administration Discipline BBA Program 4th Year, 1st Term Course Title: Financial Management and Institution Course No: FIN-4203 September 10, 2012 Summary on previous article Foreign Direct Investment (FDI) is considered as a crucial component for economic development of a developing country. Countries that are lagging behind to attract FDI are now formulating and implementing new policies for attracting more investment. The determinants which play as a driving force for attracting FDI are geographical location, cheap labour cost, and government attitude towards liberalization of the existing laws of the host country, skilled manpower, incentives for investors, and exemption of taxes etc. According to Bangladesh Board of Investment Handbook (2007) Bangladesh offers an attractive investment climate compared to other South Asian Economies. But among the emerging economies India and China are the desired choice for investment (Baskaran and Muchie, 2008). FDI is considered as an important tool for economic development in a developing country. If...
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...Report on Foreign Direct Investment in Bangladesh Executive Summary Foreign Direct Investment is one of the vital force to boost up the economy. In this project report I would like to draw a current scenario of Foreign Direct Investment in Bangladesh. In this regard I present the most updated data, avoid the uncompleted data and use the best judgment at the time of presenting the data to better knowing the current trend about the Foreign Direct Investment in Bangladesh. I prepared an overview of “Foreign Direct Investment in Bangladesh” based on secondary data and information. For this specific purpose I collected data and information from various sources like published materials such as the Bangladesh Economic Review, Different articles of Board of Investment (BOI) and Bangladesh Export Processing Zone (BEPZA), Daily Statement of Affairs of different Internet based publication and other books on Foreign Direct Investment in Bangladesh and articles related to Foreign Direct Investment in Bangladesh. I furnished the full contents of the report in eight chapters. I concentrated on arranging and putting the data in such a way that the report progressively anchors to a desired destination of understanding. Introduction Part-1 Investment has acquired considerable emotive force in any country. It is viewed as beneficial on employment creator-as it brings about economic development. It can termed capital flowing from a firm or individual within the country or in one country...
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...Position Paper Board of Investment Prime Minister’s Office Date : Thursday, 05 July, 2012 Venue : BOI Board Room Launching ceremony of: “World Investment Report-2012” "An Investment Policy Framework for Sustainable Development, including national and international dimensions “published by UNCTAD Brief on the achievement of 2011 Actual inflow of Foreign Direct Investment (FDI) in 2011 reached the highest ever level in the history of Bangladesh at US$1136.38 million, according to a report of UNCTAD. The amount is 24.42% higher than US$913.32 million recorded in 2010. The FDI inflow is comprised fresh equity amounting to US$431.85 million, while US$489.63 million came from reinvested earnings and the rest of US$214.90 million is from intra company loans. It appears from the above that reinvested earning and intra-company loans has increased to a large extent which signifies the confidence of the investors in the investment climate of Bangladesh despite apprehension on the performance of the economy by various quarters. The sectoral projection is as follows: The major sectors that attracted FDI include textile US$272.042 million, banking US$249.37 million, power gas and petroleum at US$238.21 million, telecommunications at US$180.99 million and Cement US$51.65 million. The investments that has come the countries are as follows: The countries that have invested substantially in Bangladesh in 2011 are US$152.30 million Egypt, US$117.74 million...
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...EXCHANGE RATE REGIME: IMPACT ON MACRO ECONOMY OF BANGLADESH by Liza Fahmida A project submitted in partial fulfillment of the requirements for the degree of Professional Master in Banking and Finance Examination Committee: Dr. Sundar Venkatesh (Chairperson) Dr. Juthathip Jongwanich Dr. Yuosre Badir Nationality: Bangladeshi Previous Degree: Master in Finance and Banking University of Dhaka Bangladesh Scholarship Donor: Bangladesh Bank Asian Institute of Technology School of Management Thailand May 2012 i ACKNOWLEDGEMENT The dissertation paper entitled “Evolution Of Exchange Rate Regime: Impact On Macro Economy Of Bangladesh” has been prepared for the partial fulfillment of Professional master in Banking and Finance (PMBF) program conducted by School of Management, AIT, Thailand. I would like to offer my wholehearted gratitude and respect to a good number of people who offered encouragement, data and information, inspiration and assistance during the course of constructing this dissertation paper. It would be difficult to prepare the paper and to present it in a lucid manner within stipulated time without the help of my guide teacher Dr. Sundar Venkatesh, Adjunct Faculty, School of Management, Asian Institute of Technology, Thailand. His utmost care, constant support and meticulous supervision guided me through the process. I am indebted to Begum Sultana Razia, General Manager, Monetary Policy Department, Bangladesh Bank, whose sincere co-operation and valuable...
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...GLOBALIZATION Globalization is the increasing integration of different national economies into one global market economy. It alters competitiveness conditions with the arrival of new players on the global scene and causes traditional roles to be redefined. GLOBALIZATION AS A GLOBAL TREND What seems to be a novelty is, in fact, a series of changes related primarily to the gradual removal of trade barriers, financial market deregulation, the communication technology revolution, and the impact of a more informed society. The causes of the current globalization wave include: • Technical and scientific progress, especially developments in the telecommunications sector and the communications sector as a whole. • Widespread transport use on an international scale. • A strong increase in demand for goods and services, resulting from a wealthier population and greater life expectancy. THE DIMENSIONS OF GLOBALIZATION Globalization is far from being one-dimensional. Economically, the primary effects of globalization are seen in the reduction of protectionist policies, the liberalization of international economic transactions, and the expansion of Foreign Direct Investment (FDI). Technological advances contribute decisively to productivity improvement, economic growth, and international trade. From a political perspective, one of the consequences of globalization is the loss of the countries’ independence on certain issues in that international decisions are directly filtered...
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...BANGLADESH STOCK MARKET GROWING? KEY INDICATORS BASED ASSESSMENT M Khokan Bepari Assistant Professor Department of Cooperation and Marketing Faculty of Agricultural Economics & Rural Sociology Bangladesh Agricultural University, Mymensingh-2202, Bangladesh Phone: +88 01716601759 khokan552@yahoo.com Dr. Abu Mollik Senior Lecturer and Finance Discipline Leader School of Commerce and Marketing Division of Business and Informatics Central Queensland University abumollik@yahoo.com.au Abstract This paper focuses on the growth of Bangladesh stock market over time. The market trends in terms of market capitalization, market liquidity, market concentration, number of listings, volatility in the market index and foreign portfolio investment were considered. The study finds that key indicators are significantly correlated. Stock market growth index is constructed considering market capitalization ratio; turn over ratio, value traded to GDP ratio and volatility in market index. The findings of the study suggest that although Bangladesh stock market is growing over time, the growth has not yet assumed any stable and obvious trend. We conclude that Bangladesh stock market is still at an early stage of its growth path with a small market size relative to GDP and is characterized by poor liquidity and high market concentration. Introduction Demirguc-Kunt and Levine (1996), Singh (1997) and Levine and Zervos (1998) find that stock market growth plays an...
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...Table of Contents 1.0 Introduction……………………………………………………………….3 2.0 Bangladesh Economy………………………………………….................3 2.1 Relatively investor friendly open policy regime………………………3 2.2 GDP Growth……………………………………………………………4 2.3 Foreign Exchange Reserve……………………………………………..4 2. 4 Remittance…………………………………………………………….4 2.5 Money Supply………………………………………………................5 2. 6 Savings………………………………………………………………..5 2.7 Investment……………………………………………………………..6 3.0 Overview of Capital Market in Bangladesh……………………………6 3.1 Stock Exchange as an Organization……………………………………...7 3.2 Instruments………………………………………………………………..7 3.3 Share Categorization: A, B, G, Z & N……………………………………..8 3.4 Key Market Segments…………………………………………………9 3. 5 Players………………………………………………………..............9 3. 6 Principal market Instruments………………………………...............9 4. 0 Recent Trend in the Capital Market……………………………………10 4.1 Market Analysis……………………………………………………...11 4.1.1 Insurance Sector…………………………………………………..11 4.1.2 Banks and NBFI sector…………………………………..............12 4.1.3. Mutual funds…………………………………………………….12 4.2 Performance comparison with International Market………………..13 4.3 Highlights of the year 2010…………………………………............14 4.3.1 Increase of BO accounts and brokerage branches……………….14 4.3.2 Recent Crash……………………………………………………..15 4.4 Bangladesh Capital Markets – The Future…………………………..15 4.5 Recent Regulations and Opportunity Space…………………………16 ...
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...Answer: Foreign Direct Investment (FDI) has been an important part of the economic transition, business liberalization and macro-economic growth story in Bangladesh over the last decade. Since the last decade, there has been a considerable change in global flows of trade and finance including a surge in FDI. Despite being a recent phenomenon, several underlying factors have contributed to increasing the FDI inflow in Bangladesh, such as trade and exchange liberalization, current account convertibility, emphasis on private sector led development, liberalization of the investment regime, opening up of infrastructure and services to the private sector-both domestic and foreign, and above all the interest of foreign investors in energy and telecommunication sector. It is argued that more open trade policies are associated with the presence of foreign firms and economy-wide technological and productivity gains in developing countries like Bangladesh. There also exists evidence of a strong positive correlation between increasing share of FDI in GDP and diversification to high-technology exports in countries that have open trade regimes. Foreign Direct Investment (FDI) has played a key role in the modernization of the Bangladesh economy for the last 15 years. Bangladesh received FDI of $1.13 billion last year compared to $910 million in 2010. This increase of about 25% is higher than the average 23% worldwide growth of FDI. According to the 2012 World Investment Report (WIR)...
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...difference between domestic and international business. The international executive is subject to a new set of macro environmental factors, to different constraints, and to quite frequent conflicts resulting from different laws, cultures, and societies. The basic principles of business are still relevant, but their application, complexity, and intensity vary substantially. Area of study within this topic include differences in legal systems, political systems, economic policy, language, accounting standards, labor standards, living standards, environment standards, local culture, corporate culture, foreign exchange market, tariffs, import and export regulations, trade agreements, climate education and many more topics. Each of these factors requires significant changes in how individual business units operate from one country to the next. Importance of this topic: Still Bangladesh is a developing country, we are...
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