Vietnam vs Bangladesh - some perspectives

March 7, 2008

[An email discussion among some of the members of bdinvest mailing list - excerpted here]  

Having had a day of meetings here in Ho Chi Minh City with mostlyfund managers and brokerages, I have to say that this market, down46% from peak on March 17, 2007, is probably considerably moreinteresting over the next 12-18 months than Bangladesh. One of themain reasons, without a doubt, is that the Ministry of Finance justusurped authority from the central bank yesterday and has made thestability and continued growth of the capital markets apriority. I wonder if it’ll take a similar type of crash for Bangladesh to takeauthority away from the skeletons at the SEC. - Rahat 

3 Comments | capital markets | Tagged: | Permalink
Posted by talam

Securitization in Bangladesh

March 1, 2008

Jamuna Bridge
What? Securitization? You mean creating those @#$@#% structured securities that are causing so much pain all around the world currently? I mean - look, AIG just took an $8B (pre-tax, post is $5.3B) loss - that’s about 10% of Bangladesh’s GDP! Imagine if 10% of Bangladesh’s annual production just went zoom zoom … [sorry - this week, indeed many recent weeks, were not kind to ppl in capital markets .... just letting off steam...]
 
Agreed now may not be the most opportune time to bring up securitization in polite conversation, at least not on Wall St or the City. But it used to, and will again in the future (no, I don’t think I am being naively optimistic here) serve a useful purpose in channeling funds, providing liquidity, and providing (appropriate levels of) leverage where needed.
Infrastructure development is an area where securitization techniques can and should be applied - and it seems like at least the Jamuna bridge securitization effort is ongoing (see recent Daily Star article for example). Also - note all the recent talk by Bangladesh Bank trying to get the banks to reduce the spread between deposit and lending rates (now ~6%) - clearly, alternate and cheaper funding sources can help industry as well.
 

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3 Comments | capital markets, review, securitization | Permalink
Posted by talam