CSE eyes commodity exchange to diversify capital market
Commodity market would create new investment avenues.
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.
Md Saifur Rahman Mazumdar, managing director of the CSE, said the initiative would also challenge the conventional perception that the capital market is limited to share trading.
He made the remarks at a workshop titled "Diversification of the Capital Market: Prospects of Commodity Exchange in Bangladesh", organised by the Chattogram Television Reporters Network at the CSE conference room today (8 September).
Keep updated, follow The Business Standard's Google news channel
Saifur said incorporating a commodity market into the capital market would diversify the financial system and create new investment avenues.
Speakers said a commodity exchange could help businesses manage risks from price fluctuations while providing a more transparent mechanism for price discovery.
An organised and properly regulated market would allow buyers and sellers to determine commodity prices through formal trading rather than relying solely on fragmented physical markets, they said.
Bangladesh's capital market is currently centred largely on equities and related securities. A commodity exchange would introduce organised trading in commodities and potentially provide instruments to hedge against price risks.
The speakers, however, stressed that the market would require appropriate regulations, trading infrastructure, warehousing and quality standards, along with safeguards against manipulation.
The CSE has been working on developing a commodity exchange for several years as part of efforts to broaden the country's capital market.
For Bangladesh, where businesses are often exposed to sharp fluctuations in imported raw material and commodity prices, such a platform could provide an additional tool for managing commercial risks.
The success of the initiative will depend on establishing the regulatory, technological and physical infrastructure needed to ensure transparent and credible commodity trading.
Former CSE president Mirza Salman Ispahani attended the workshop as chief guest, while CSE Director Major Md Emdadul Islam was present as special guest.
