The Chittagong Stock Exchange (CSE) is pushing to diversify Bangladesh's capital market by introducing a commodity exchange, aiming to expand investment opportunities and bring the country's financial market closer to international standards.
The exchange shared this at an awareness and knowledge-sharing programme titled “Diversification of Bangladesh Capital Market: Prospect of Commodity Exchange” held at its head office in Chattogram on Tuesday.
Former CSE president Mirza Salman Ispahani was present as the chief guest at the event.
CSE Managing Director M Shaifur Rahman Mazumdar said establishing a commodity exchange is essential for diversifying Bangladesh's capital market, improving commodity price discovery and managing price risks.
He said preparations for establishing the commodity market had advanced significantly, with work on its regulatory, technological and ecosystem frameworks nearing completion.
“Establishing a commodity market is essential for making the capital market more vibrant,” he said.
Mr Mzjumdar said the CSE had also upgraded its trading system as part of the technological preparations, incorporating the existing equity, derivatives and equity-derivatives markets into the new architecture.
He said the development of the commodity-market ecosystem would require cooperation from all relevant stakeholders.
CSE Director and former major (retd) Emdadul Islam said Bangladesh's commodity market remains incomplete and a commodity exchange could help address weaknesses in price discovery and commodity price-risk management.
“Bangladesh's commodity market is incomplete. If commodity price risks can be managed properly and appropriate prices can be determined, the commodity market can be transformed into a well-structured market,” he said.
He said experience of countries with established commodity markets showed that such markets could play an important role in the broader economic ecosystem.
The commodity exchange could benefit producers, consumers and other participants in the commodity supply chain by providing a more organised mechanism for trading and price discovery, he added.
Need for new products
Mirza Salman Ispahani, former president of CSE, said introducing new products and diversifying the country's capital market had become important.
“The introduction of new products and implementation of diversification are extremely necessary given the current condition of Bangladesh's capital market and economy,” he said.
The CSE had made considerable progress in preparing for the commodity market and expressed hope that its launch would benefit both the capital market and the broader economy.
The CSE said the establishment of the commodity exchange involves three major components — regulatory, technological and ecosystem frameworks.
The exchange has already upgraded its trading system to support the existing equity market as well as derivatives and equity-derivatives markets under the new technological framework.
The awareness programme was attended by senior CSE officials and representatives of print and electronic media.
