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Management Research and Practice

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Jahur M. S. and Quadir N. mrp.ase.ro DEVELOPMENT OF BOND MARKET IN BANGLADESH: ISSUES, STATUS AND POLICIES
MANAGEMENT RESEARCH AND PRACTICE Vol. 2 Issue 3 (2010) pp: 299-313

DEVELOPMENT OF BOND MARKET IN
BANGLADESH: ISSUES, STATUS AND
POLICIES
Mohammad Saleh JAHUR 1, S.M. Nasrul QUADIR 2
Department of Finance and Banking, University of Chittagong, Chittagong, Bangladesh sjahur2000@yahoo.com 2 Department of Finance and Banking, University of Chittagong, Chittagong, Bangladesh nasrul1964@yahoo.com Volume 2, Issue 3 / September 2010

Management Research and Practice

1

Abstract
Bond market acts as buffer of equity market. This market in Bangladesh has been found very inefficient with respect to number of issues, volume of trade, number of participant, long-term yield curve, interest rate policy etc. In view of this, the present study has been undertaken aiming at identifying the problems that impedes the growth and development of
Bond Market in Bangladesh. Researchers have collected both prima ry and secondary data and analysed the same by employing descriptive measure as well as multivariate technique-Varimax Rotated Factor Analysis. The study has found that the size of debt market of Bangladesh is very low as compared to other SAARC Countries; has huge growth potentiality; and identified important impediments to the growth and development of Bond Market in Bangladesh such as risk and return factor, liquidity and government policy factor, issue management factor, investment policy factor, macro economic and regulatory factor, and market & issue related factor. The study has suggested some important policy measures such as regulatory change, establishment of long-term yield curve, offering fiscal benefits, encouraging companies raising funds through corporate bond issues, keeping treasury rate low etc. for the development of Bond

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