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Most people associate Bangladesh with catastrophic floods and chronic instability, but that country has actually come a long. According to the International Monetary Fund, growth is set to reach 7% this year, a 30-year high.
A military-backed government has pushed through a series of reforms, and 26 state-owned enterprises (SOEs) are slated for sale.
“It’s a quantum leap in the mindset of the government…that they’re embracing privatization,” says Yawer Sayeed, CEO of the first and only private fund manager in the country. Newfound political stability has encouraged foreign investment, and consumer consumption is also on the rise.
The Dhaka Stock Exchange Index has risen by about 80% this year amid these improved conditions. The market’s total value is a tiny $8 billion, says Pooja Thakur on Bloomberg.com, but it’s expected to double to more than $15 billion as privatizations provide further impetus and the market appears on foreign investors’ radar screens.
JPMorgan Chase & Co. (JPM), Merrill Lynch & Co. Inc. (MER), and Citigroup Inc. (C) – which last month became the first foreign lender to acquire a license to offer investment banking services – all reckon Bangladesh may be the “next Asian success story,” says Thakur.