Domestic group Outline: Opportunities Government Private - - PowerPoint PPT Presentation

Domestic group

Outline:

• Opportunities
• Government
• Private
• Challenges
• Government
• Private
• Reforms

Opportunities: government

• Capital market as the option with Government intervention:
• Infrastructure bond, bond tied with specific projects: T‐bill already there, revenue

tied up bond

• Sovereign bonds: whether the banks will participate and take risk or not so the issue

is price taker or price maker

• Able to develop the yield curve and determine long run interest rate
• Diversification of portfolio for the banks: diversification of asset quality
• Saving bonds appealing to the retail investors & inflation bonds
• Divestment of SOE
• Calling for Private companies/individuals participation
• Plough back the money for infrastructure development
• PPP
• FDI

Opportunities: Pvt. sector

• Alternative investment market (Second tier market):
• Pvt sectors/individuals with good business ideas can pitch the idea
• Call for interested institutional investors/individuals
• Successful projects can later be incorporated as company
• IPO
• Corporate bonds
• Peer to peer lending
• Crowdfunding
• Short term instruments

Challenges: Government

• Depletion of Forex Reserves
• High dependency on external grants
• Low Exports with high Imports
• Confined to Institutional Investments
• Lack of willingness to pay taxes
• Tax leakages
• High reliance on government: contingent liability and exposure
• Lack of institutional coordination leading to inconsistent policies

pertaining to business environment

Challenges: Pvt. Sector

• Lack of willingness to come to formal market for fund
• Lack of financial literacy
• Lack of professionalism: no books keeping and business plan
• FIs not so keen to lend to SME due to prevalence of high NPA
• Credit rating agencies

Reforms

• Promotion of Brand – Bhutan through aggressive marketing
• Promote and encourage FDI
• Tax policy reforms
• Promote financial literacy
• Agency responsible for the development of private sector
• Govt. may support promising Start‐up businesses (SME)
• Targeted incentives
• Long term strengthening of economy

Tashi Delek