Term paper on:

Emerging equity market and economic

development of Bangladesh

1
Term Paper On
Emerging equity market and economic
development of Bangladesh
(This Internship Report Is Submitted or the !artial ulfillment of the "egree of
Bachelor of Business of #dministration $ith a %a&or in inance'
Submitted To
Lecturer
Faculty of Business Studies
Premier University
Prepared By
Name:
Student ID#
Semester: 8
th
Batch:
Proram: BB!
"a#or in finance
Su$mission Date:

P%&"I&% UNI'&%SI()*
+,I((!-.N-

/
Letter of Transmittal
Date:
(o
(he Su0ervisor
"r %a#i$ Datta
Lecturer
Faculty of Business Studies
Premier University
+hittaon* Banladesh
Su$#ect: 1 Su$mission of (erm Pa0er on 2&merin e3uity mar4et and economic
develo0ment of Banladesh5
Dear "adam
I have the ratification to inform you that I have accom0lished my term 0a0er on5
&merin e3uity mar4et and economic develo0ment of Banladesh5
I 6ant to su$mit the term 0a0er as 0artial fulfillment of the BB! deree re3uirement7 I
am very much rateful to my su0ervisor for ivin me the sco0e7
I 0ray and ho0e that you 6ould $e 4ind enouh to acce0t this re0ort and o$lie there$y7
)ours sincerely*
8 9
Name:
Student ID#
Semester: 8
th
Batch:
Proram: BB!
"a#or in finance

:
ACKNOWLEDGEMENT
First of all I 0ay a s0ecial than4s to my !lmihty !llah * 6ho made me a$le to com0lete
this re0ort7 It is very difficult to e;0ress my feelins that hel0ed me in com0letion of this
re0ort7 But I thin4 there is no other 6ord e;ce0t than4s* 6hich can com0liment my
sentiments7

I 0ay ratitude to the Su0ervisor of my re0ort "r7 %a#i$ Datta * lecture of faculty of
Business Studies* Premier University +hittaon7
I am also rateful to the officials of stoc4 mar4et 6hose su00ort hel0s me to com0lete the
re0ort7 Finally* I 6ould li4e to than4 my entire course teacher of Finance De0artment for
their 0ro0er uidance and care to com0lete the re0ort7

<
Executive Summary
! nation=s economy that is 0roressin to6ard $ecomin advanced* as sho6n $y some
li3uidity in local de$t and e3uity mar4ets and the e;istence of some form of mar4et
e;chane and reulatory $ody7
&merin mar4ets enerally do not have the level of mar4et efficiency and strict
standards in accountin and securities reulation to $e on 0ar 6ith advanced economies
8such as the United States* &uro0e and >a0an9* $ut emerin mar4ets 6ill ty0ically have a
0hysical financial infrastructure includin $an4s* a stoc4 e;chane and a unified currency7
(he Banladesh stoc4 mar4et till today is not $road or dee0 enouh7 Issuers do not use
the full 0otential of the mar4et for raisin e3uity ca0ital $y issuin shares or for
$orro6in funds $y issuin cor0orate $onds7 "oreover* savers feel uncomforta$le in
investin in Banladesh ca0ital mar4et instruments7 %ather* they feel more comforta$le in
maintainin their savins 6ith $an4s as Fi;ed De0osit %ecei0t 8FD%s9 and Savins
+ertificates7 It seems that reulators fail to ade3uately address the 0ro$lems faced $y $oth
the issuers and the investors7 In this 0ers0ective* the follo6in are needed in order to
ena$le the ca0ital mar4et to 0lay its due role in creatin a friendly investment climate in
Banladesh: 4no6in the $an41$ased financin systems* e;aminin the structure of
orani?ed ca0ital mar4et* sortin out and addressin the 0ro$lems of issuers and
investors7 (his study aims to address these issues 6ith a vie6 to creatin a healthy
investment climate in Banladesh7

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Chapter 1
Introduction

A
The stock market, an imortant in!re"ient o# the #inancia$ system, $ays a
si!ni#icant ro$e in the economy o# the country% The Securities an" Exchan!e
Commission exercises o&ers un"er the Securities an" Exchan!e Commission
Act '(()% *t re!u$ates institutions en!a!e" in caita$ market activities%
+an!$a"esh +ank exercises o&ers un"er the ,inancia$ *nstitutions Act '(() an"
re!u$ates institutions en!a!e" in #inancin! activities inc$u"in! $easin! comanies
an" venture caita$ comanies%
The SEC has issue" $icenses to -. institutions to act in the caita$ market% O#
these, '( institutions are Merchant +anker / 0ort#o$io Mana!er &hi$e . are *ssue
Mana!ers an" '1one2 acts as *ssue Mana!er an" 3n"er&riter% The *nvestment
Cororation o# +an!$a"esh &as esta4$ishe" in '(.5 &ith the o46ective o#
encoura!in! an" 4roa"enin! the 4ase o# in"ustria$ investment% *C+ un"er&rites
issues o# securities, rovi"es su4stantia$ 4ri"!e #inancin! ro!rammes, an"
maintains investment accounts, #$oats an" mana!es c$ose"7en" / oen7en"
mutua$ #un"s / c$ose"7en" unit #un"s to ensure su$y o# securities as &e$$ as
!enerate "eman" #or securities% *C+ a$so oerates in the DSE an" CSE as
"ea$ers%

B
Objective of study 8
(he 0rime of the study is to fulfill the academic re3uirement of BB! 0roram another
im0ortant o$#ective of the study is to e;amine the future of ca0ital mar4et and individual
stoc4 analysis and to 0erformance7 Stoc4 &;chane in any country serve one $asic
o$#ective
(hat is Fundin to com0anies listed on that stoc4 e;chane7
+om0anies float their IP.s on e;chane and in return ive $uyers riht of o6nershi0 and
annual dividends8sometimes t6ice a year97
+om0anies sell their riht of o6nershi0 to tradersCinvestorsCFIIs etc and in return enerate
ca0ital for their com0anies7Stoc4 &;chanes also attract lots of FIIs 6hich is ood for
country economy7
(he o$#ectives of the study can $e stated as follo6s7
Develo0 a stron 0latform for entre0reneurs for raisin ca0ital7
Provide a investment o00ortunity for small and lare investors7
Develo0 a trans0arent mar4et ensurin investor=s interest7
Provide a fully automated tradin system 6ith most modern amenities to
en sure :3uic4* easy* accurate transactions and easily accessi$le to all7
(o hihliht im0ortant milestones in the develo0ment of Banladesh=s
industry and trade sectors over the recent 0ast7
(o 4no6
ho6 Stoc4 mar4et im0act of develo0ment of a country
!naly?e Banladesh stoc4 mar4et 0ossi$ilities and 0ro$lems
(o ive necessary suestion to ma4e the economy healthier
!naly?e economic role of stoc4 e;chane all over the country
(o ma4e 0ro0er investment decision in 0resent as0ect of Banladesh
+a0ital mar4et
(o ma4e investment decision of individual stoc4 on the $asis of
Fundamental !nalysis
(o choose $est investment of stoc4 on the $asis of (echnical !nalysis
(o articulate ma#or challenes in the area of industry and trade
(o come u0 6ith 0olicy recommendations to address the attendant
challenes
(o 0rovide in0uts to the electoral discourse on issues related to
develo0ment of industry and trade in Banladesh7

8
Scope of study:
This stu"y is a art o# aca"emic curricu$um o# the ++A stu"ent% The co$$ecte"
"ata an" in#ormation have 4een ta4u$ate", rocesse" an" ana$y9e" care#u$$y an"
reort has 4een reare" in the resent #orm o# market an" the stu"y more
in#ormative an" use#u$%
Their stu"y is con"ucte" at Chitta!on! Stock Exchan!e Limite" 1CSE2, Dhaka
Stock Exchan!e Limite",1DSE2to 4e ac:uainte" &ith the rea$ $i#e situation
esecia$$y &ith its in house accountin! system an" their various tyes o#
u4$ication / ;esearch &ork%
Methodology of the Study:
The stu"y has 4een ma"e on$y 4y one month% * trie" my 4est to 4e ac:uainte"
&ith a$$ the sections an" "eartments o# the or!ani9ation%
The ro6ect &as 4asica$$y execute" 4y o4servin! the "ai$y activities o# the sta##s
an" &orkin! &ith in ro!ress% ,ina$$y * have con"ucte" an o4servation metho" #or
#inin! the #unction an" activities o# Chitta!on! Stock Exchan!e o# +an!$a"esh
,Stock +rokera!e #irm an" investors 0sycho$o!y% * have a$so con"ucte" a rimary
survey a$yin! :uestionnaire metho" #or Co$$ectin! the necessary "ata #rom the
"ai$y<s customers an" the CSE stu##% The re$evant "ata is co$$ecte" #rom the
rimary sources an" a$so use the secon"ary sources in#ormation%
'% 0rimary Data are co$$ecte" throu!h =
O4servation #or the tota$ internee erio"
Oen en"e" an" c$oses en"e" :uestion
Con"uctin! intervie& 4oth investors an" Stock 4rokera!e #irm%

D
2. Secon"ary Data co$$ecte" #rom =
0rintin! materia$s o# Artic$es o# caita$ market Stock Exchan!es
Li4rary Stu"y
+a$ance Sheet Stu"y
Ma!a9ine / >ourna$
We4site
Limitations of the Study
This ;esearch 0ro6ect &ork &as reare" care#u$$y &ith #u$$ concentration to
avoi" any kin" o# misin#ormation or mistakes% +ut sti$$ $ike a$$ other research &ork
this reort may a$so have some $imitations% ,rom my vie& some o4stac$es in this
reort are !iven 4e$$o&8
0rimary an" Secon"ary "ata &ere not avai$a4$e in or!ani9e" #orm
There &as the shorta!e a!e o# a"e:uate $iterature on CSE%
Durin! the aer &ork &e #in" some in#ormation "ec$are" 4y the 4ank &as
not con#i"ent enou!h to make a stron! reort%
This ;eort &as reare" #rom 4asis o# the secon"ary "ata source, so
natura$$y it has some "ra&4ack #or the rimary "ata%
This reort &as reare" on$y ana$y9in! this 4ank?s avai$a4$e "ata or
in#ormation% This ro6ect reort "oesn?t have any comarison statistics &ith
any other 4anks 4oth $oca$ an" internationa$%
This reort &as reare" in very ti!ht time sche"u$e an" it may not
ana$y9e a$$ the entire reort%

1E
Chapter 2
Theoretical Aspects

11
!n emerin mar4et economy 8&"&9 is defined as an economy 6ith lo6 to middle 0er
ca0ita income7 Such countries constitute a00ro;imately 8EF of the lo$al 0o0ulation* and
re0resent a$out /EF of the 6orld=s economies7 (he term 6as coined in 1D81 $y !ntoine
G7 'an !tmael of the International Finance +or0oration of the Gorld Ban47
!lthouh the term Hemerin mar4etH is loosely defined* countries that fall into this
cateory* varyin from very $i to very small* are usually considered emerin $ecause of
their develo0ments and reforms7 ,ence* even thouh +hina is deemed one of the 6orld=s
economic 0o6erhouses* it is lum0ed into the cateory alonside much smaller economies
6ith a reat deal less resources* li4e (unisia7 Both +hina and (unisia $elon to this
cateory $ecause $oth have em$ar4ed on economic develo0ment and reform 0rorams*
and have $eun to o0en u0 their mar4ets and HemereH onto the lo$al scene7 &"&s are
considered to $e fast1ro6in economies7
What an EME Looks Like
&"&s are characteri?ed as transitional* meanin they are in the 0rocess of movin from a
closed economy to an o0en mar4et economy 6hile $uildin accounta$ility 6ithin the
system7 &;am0les include the former Soviet Union and &astern $loc countries7 !s an
emerin mar4et* a country is em$ar4in on an economic reform 0roram that 6ill lead it
to stroner and more res0onsi$le economic 0erformance levels* as 6ell as trans0arency
and efficiency in the ca0ital mar4et7 !n &"& 6ill also reform its e;chane rate system
$ecause a sta$le local currency $uilds confidence in an economy* es0ecially 6hen
foreiners are considerin investin7 &;chane rate reforms also reduce the desire for
local investors to send their ca0ital a$road 8ca0ital fliht97 Besides im0lementin reforms*
an &"& is also most li4ely receivin aid and uidance from lare donor countries andCor
6orld orani?ations such as the Gorld Ban4 and International "onetary Fund7
.ne 4ey characteristic of the &"& is an increase in $oth local and forein investment
80ortfolio and direct97 ! ro6th in investment in a country often indicates that the country
has $een a$le to $uild confidence in the local economy7 "oreover* forein investment is a
sinal that the 6orld has $eun to ta4e notice of the emerin mar4et* and 6hen
international ca0ital flo6s are directed to6ard an &"&* the in#ection of forein currency
into the local economy adds volume to the country=s stoc4 mar4et and lon1term
investment to the infrastructure7
For forein investors or develo0ed1economy $usinesses* an &"& 0rovides an outlet for

1/
e;0ansion $y servin* for e;am0le* as a ne6 0lace for a ne6 factory or for ne6 sources of
revenue7 For the reci0ient country* em0loyment levels rise* la$or and manaerial s4ills
$ecome more refined* and a sharin and transfer of technoloy occurs7 In the lon1run*
the &"&=s overall 0roduction levels should rise* increasin its ross domestic 0roduct and
eventually lessenin the a0 $et6een the emered and emerin 6orlds7
A stock market is a market #or securities 1"e4t or e:uity2, &here 4usiness
enterrises 1comanies2 an" !overnments can raise $on!7term #un"s% *t is "e#ine"
as a market in &hich money is rovi"e" #or erio"s $on!er than a year, as the
raisin! o# short7term #un"s takes $ace on other markets 1e%!%, the money
market2% The caita$ market inc$u"es the stock market 1e:uity securities2 an" the
4on" market 1"e4t2% ,inancia$ re!u$ators, such as the 3K<s ,inancia$ Services
Authority 1,SA2 or the 3%S% Securities an" Exchan!e Commission 1SEC2,
oversee the caita$ markets in their "esi!nate" 6uris"ictions to ensure that
investors are rotecte" a!ainst #rau", amon! other "uties%
Stock markets may 4e c$assi#ie" as primary markets an" secondary markets.
Sub-Markets of stock Market
The rimary market "ea$s &ith ne&$y issue" securities an" is resonsi4$e
#or !eneratin! ne& $on!7term caita$%
The secon"ary market han"$es the tra"in! o# revious$y7 issue" securities,
an" must remain hi!h$y $i:ui" in nature 4ecause most o# the securities are
so$" 4y investors%
Stock market of angladesh
Stock market is one o# the sma$$est in Asia 4ut the thir" $ar!est in the south Asia
re!ion% *t has t&o #u$$7#$e"!e" automate" stock exchan!es name$y 7 Dhaka Stock
Exchan!e 1DSE2 an" Chitta!on! Stock Exchan!e1CSE2% *t a$so consists o# a
"e"icate" re!u$ator, the Securities an" Exchan!e Commission 1SEC2, since, it

1:
im$ements ru$es an" re!u$ations, monitors their im$ications to oerate an"
"eve$o the caita market%
!eatures of angladesh Stock Market
A We$$7 e:uie" re!u$ator &ith a &i"e ran!e o# re$evant an" re!u$ation
T&o &e$$7 e:uie" #u$$y automate" stock exchan!es an" an over the
counte" exchan!e%
A &e$$7 e:uie" #u$$y automate" Centra$ Deository System%
A #ast !ro&in! in"ivi"ua$s an" institutiona$ investor?s 4ase &ith $atent
"eman" #or securities%
A -@' $iste" securities market &ith more than A )%'@ 4i$$ion market caita$%
Lucrative tax incentives #or stock investment%
*ncreasin! num4er o# $ar!e comanies on 4oar"%
*ncreasin! interest in institutiona$ ort#o$io an" mutua$ #un"s%
*ncreasin! attention to cororate !overnance issues%
"egulatory bodies of angladesh stock Market
Stock market is an interaction o# many #orces an" is re!u$ate" 4y #o$$o&in!
re!u$atory 4o"ies 8
Securities an" Exchan!e Commission 1SEC2
Nationa$ +oar" o# ;evenue 1 N+; 2
+an!$a"esh +ank 1 ++2

1<
;e!istrar o# >oint Stock Comanies an" ,irms 1 ;>SC2
Dhaka Stock Exchan!e 1DSE2
Chitta!on! Stock Exchan!e1CSE2
Stock Market #evelopment and $conomic %ro&th
The Stock Market #ocus o# the economist an" o$icy makers
4ecause o# the erceive" 4ene#its it rovi"es #or the economy%
Caita$ Market has 4een consi"ere" as imortant vehic$es #or
economic "eve$oment o# the country%
Stock Market contributes to economic development through8
'% 4ein! an initia$ source an" #aci$itator o# e:uity #inance
-% 4ein! an e##icient mechanism #or srea"in! o&nershi &i"e$y in the
ou$ation an" mo4i$i9in! the savin!s the savin!s o# the ou$ation
)% 4ein! a hi!h$y e##icient mechanism #or a$$ocation caita$ to ro"uce use
an"
B% #aci$itatin! a $ink 4et&een the caita$ markets o# a articu$ar country an"
the markets #or the in"ustria$ &or$"
C% Stock market "eve$oment an" economic !ro&th has 4een !ettin! more
imortance 4oth as theoretica$ an" emirica$ stu"ies 1 Da9aki"is an"
A"amoou$os, -EE( 2
5% *n the #inancia$ $iterature on en"o!enous !ro&th, the re$ationshi 4et&een
caita$ markets "eve$oment an" economic !ro&th has receive" much
attention 1 Levine '((.2

1@
.% ;esearch #in"in!s sho&e" the true resu$ts o# the statement in case o#
*n"ia, Muritious an" 3AE
'he (M#) aimed at:
Stren!thenin! market re!u$ation an" suervision
Deve$oin! the caita$ market instructors
Mo"erni9in! stock market suort #aci$ities
*ncreasin! the $imite" su$y o# securities in the market
Deve$oin! institutiona$ source "eman" #or securities in the
market
*mrovin! o$icy coor"ination
*nfrastructure fund from (apital Market
*nfrastructure e+uity fund can be tapped from Market by:
'% *ssuin! e:uity or "e4t o# in#rastructure ro6ects
-% Enhancin! articiation o# $ain vani$$a mutua$ #un" in *n#rastructure
re$ate" issues%
)% *ssuin! "e"ication *n#rastructure mutua$ #un"

1A
+an!$a"esh economy !ro&in! at the rate o# 5%.F &i$$ soon cross A 'EE
+i$$ion
Market caita$i9ation &i$$ reach at $east -CF o# the GD0 as the investor
aetite to caita$ market is !ro&in! #ast
*n#rastructure caita$i9ation reachin! -EF o# market ca an a""itiona$ 3SD
-%C 4n #un" can 4e tae" #rom caita$ market 4y -E'-%

"ole of Stock Market in *ndustrial Sector
'e,tile *ndustry *nformation Services: Deve$oe" the 4usiness $an,
#inancia$ #orecast, an" investor resentation #or a +-+ startu #ocuse" on
4ecomin! the Gtruste" sourceG in the texti$e in"ustry% The comany rovi"e"
innovative services inc$u"in! a hysica$ s&atch escro& an" certi#ie" texti$e
ana$yses%
$lectronics Manufacturer: ,aci$itate" the "eve$oment o# a strate!ic $an
an" coache" the 4usiness o&ners throu!h the im$ementation o# the $an%
Cayenne a$so "eve$oe" an investor resentation use" to so$icit rivate
investors an" is current$y coachin! the mana!ement throu!h a erio" o# rai"
!ro&th%
)arcel #elivery $+uipment: 0reare" a 4usiness $an an" investor
resentation #or eShi7Bu, an *srae$74ase" "eve$oer o# arce$ "e$ivery
e:uiment% eShi<s Automatic De$ivery Machine 1ADM2 net&ork is a
!roun"4reakin! so$ution #or mana!in! the arce$ "e$ivery su$y chain in the
$ast mi$e, trans$atin! into increase" e##iciency an" ro#its #or !$o4a$ shiin!
ven"ors an" !reater convenience #or their resi"entia$ customers% eShi, one
o# Cayenne<s severa$ reeat c$ients, &as ac:uire" 4y Siemens% GThanks #or

1B
the :uick resonseHG sai" Nir Kinory, COO an" Executive Dice 0resi"ent% GIou
kee 4reakin! your o&n recor"sHG
-erospace: Je$" ositions o# Genera$ Mana!er an" +usiness Deve$oment
Director #or a #irm rovi"in! $ea"in!7e"!e testin! an" en!ineerin! services%
Le" key DoD ursuit cature e##ort #or a"vance" sate$$ite threat simu$ation
system%
.ydraulic Systems: Deve$oe" a 4usiness $an #or JKK, the $ea"in!
rovi"er o# hy"rau$ic system kits #or the insta$$ation an" use o# attachments on
excavators% As a #o$$o&7on ro6ect, "eve$oe" a marketin! $an an" rovi"e"
a"visory services in suort o# the comany<s mer!ers an" ac:uisitions
strate!y% GCayenne Consu$tin! he$e" i"enti#y the areas &here #ocus &ou$"
a$$o& JKK to increase its share o# an exan"in! market,G sai" >ohn E$$ey,
0resi"ent o# JKK% GWe nee"e" the "isci$ine o# $annin! Cayenne Consu$tin!
rovi"es to "o this%G
#ata Storage #evices: 0reare" a 4usiness $an an" three7year #inancia$
ro6ection #or a $ea"in! rovi"er o# "ata stora!e ro"ucts an" services% The
Comany serves hi!h7!ro&th stora!e se!ments such as iSCS*, Stora!e Area
Net&ork 1SAN2, Net&ork7Attache" Stora!e 1NAS2, Direct Access Stora!e
1DAS2%%
Steel !abricator: Deve$oe" a 4usiness $an an" #inancia$ mo"e$ use" 4y a
!rou o# investors to raise more than AB,CEE,EEE in "e4t an" e:uity to
urchase a &ire mi$$ in +ut$er 0A% The resi"ent o# the comany &rote GOur
team hire" LCayenneM to !ui"e us throu!h the rocess o# urchasin! a $ar!e
manu#acturin! #aci$ity% Seci#ica$$y, Lthe consu$tantM "eve$oe" the #inancia$
mo"e$ an" 4usiness $an, &orke" &ith 4anks an" the S+A to secure "e4t

18
#inancin!, ne!otiate" &ith the se$$er, $ea" an" mana!e" the "ue "i$i!ence
rocess an" !ui"e" us throu!h the t&ists an" turns that haen in a "ea$ as
com$ex as this one% LJeM $aye" a ma6or ro$e in the success o# our ac:uisition
an" * &ou$" hi!h$y recommen" him to anyone $ookin! to start a 4usiness or
make a ma6or ac:uisition%G
Chapter 3
Practical Aspects

1D
-/%L-#$S. Stock M-"0$'
DHAKA STOCK ECHA!"E #DSE$
The Dhaka Stock Exchan!e is re!istere" as a 0u4$ic Limite" Comany% *t &as
incororate" in '(CB un"er the name o# East 0akistan Stock Exchan!e% Activities
o# the Exchan!es &ere susen"e" &hen +an!$a"esh !aine" in"een"ence% *n
'(.5 tra"in! activities &ere resume" a!ain &ith on$y ( Liste" Comanies% As on
)Eth >une, '((( there &ere -)E Securities $iste" on the DSE &ith a market
caita$i9ation o# Taka CE,.B@ mi$$ion% *n the ,I '((@7(( Tota$ *ssue" Caita$ an"
De4entures o# a$$ Liste" Securities &ith Dhaka Stock Exchan!e &as Taka -@,5@B
Mi$$ion &hich &as Taka )E,-'' Mi$$ion in ,I '((.7(@%
The Dhaka Stock Exchan!e is a se$# re!u$ate" non7ro#it makin! or!ani9ation *t
has rovisions #or CEE Mem4ers thou!h at resent num4er o# mem4ers is '(C%
Mem4ershi is oen #or the #orei!ners a$so% The Exchan!e has a -B Mem4ers
Counci$, o# &hich '- are e$ecte" #rom the Mem4ers an" '- are nominate" as
non7Mem4er #rom "i##erent aex 4o"y%
As er DSE Artic$e 'EC+ its mana!ement is searate" #rom the counci$% The
executive o&ers o# the DSE is veste" &ith the Chie# Executive O##icer 1CEO2%
The CEO is aointe" 4y the +oar" &ith the arova$ o# SEC% The authori9e"

/E
an" ai" u caita$ o# the DSE are Tk% 'E%EE $akh an" Tk% )%(E $akh resective$y%
At resent DSE has ''C sta##%
(.*''-%O/% S'O(0 $1(.-/%$ 2(S$3
The Chitta!on! Stock Exchan!e 1CSE2 &as re!istere" as a 0u4$ic Limite"
Comany% As on )Eth >une '((( there &ere 'CB securities $iste" &ith the CSE
an" market caita$i9ation o# a$$ securities &as Taka BE,(CE mi$$ion% *n the
Chitta!on! Stock Exchan!e the tota$ *ssue" Caita$ in ,I '((@7(( stoo" at Taka
-B,C'( Mi$$ion &hich &as Taka -),-(@ Mi$$ion in the ,I '((.7(@%
CSE is a$so se$#7re!u$ate" non7ro#it makin! or!ani9ation &ith its o&n
re!u$ations% A -B Mem4ers +oar" o# Directors mana!es its 4usiness, out o# -B
Directors, '- are e$ecte" 4y the Genera$ +o"y, an" '- are nominate" 4y SEC%
The num4er o# mem4er is '-@ an" the #orei!ners can a$so 4ecome the mem4er
o# the CSE%
The executive o&ers o# the CSE is a$so veste" in a Chie# Executive O##icer
1CEO2% The CEO is aointe" 4y the +oar" &ith the consent o# the SEC% The
authori9e" an" ai" u caita$ o# CSE are Tk% 'CE%EE mi$$ion an" Tk% )@%BE mi$$ion
resective$y% At resent the CSE has 5) sta##%

/1
4ision
;e!u$atin! the market structure throu!h roer ru$es an" strict
com$iance 4y mem4ers%
Exansion o# CSE tra"in! net&ork to cover CEB thanas%
*ntro"uce +ook +ui$"in! systems in +an!$a"esh Caita$ Market%
*ntro"ucin! "erivative market
Continuous romotion o# Stock investment throu!hout the country%
Create oortunity to cross 4or"er tra"in! &ith SA,E countries
*ntro"uce G$o4a$ Deository ;eceits 1GD;2
Mission
To create an e##icient an" transarent market #aci$itatin! entrereneurs to raise
caita$, so that it acce$erate in"ustria$ !ro&th #or overa$$ 4ene#it o# the economy o#
the country%
Objectives
Deve$o a stron! $at#orm #or entrereneurs #or raisin! caita$N
0rovi"e an investment oortunity #or sma$$ an" $ar!e investorsN
Deve$o a transarent market ensurin! investor?s interestN

//
0rovi"e a #u$$y automate" tra"in! system &ith most mo"ern amenities to
ensure8
Ouick, easy, accurate transactions an" easi$y accessi4$e to a$$N
Attract non7resi"ent +an!$se"shis to invest in +an!$a"esh stock marketsN
Co$$ect, reserve, "isseminate "ata an" in#ormation on stock exchan!eN
Lar!e sur!e in the stock market
DSE CSE
Market Caita$i9ation '(.%B)F CE5%5)F
Tota$ Annua$ Turnover ).-%)EF ).E%C'F
Dai$y Avera!e Turnover -'E%-EF 5'C%'CF
Genera$ *n"ex !re& @)-7)C5. BE(%B7
''C.%(
Country M% Ca
1 3S A 4n2
GD0
1 3S A 4n2
M% Ca to GD0 M% Ca to
Transaction
+an!$a"esh
1DGEN2
C%(5 5)%.) (%)CF E%'.F
*n"ia 1 +SE2 .)E%EE @CB%B@ @B%B)F E%5'F
0akistan
1 Karachi SE2
B5%5( '-@%(( )5%-EF E%@-F
Sri$anka
1 CSE2
@%)@ -5%'@ )-%E'F E%--F

/:
CSE%s Initiati&es in Stoc' (ar'et
CSE initiate" automation in '((@, #irst in the country%
CSE a$so tra"in! initiate" CD+L #irst, 4e#ore &hich the tra"in! &as not on
e$ectronic sett$ement%

Basic (ar'et Statistics o) CSE as on (arch 2*1*

'% Tota$ *ssue" Caita$ o# a$$ $iste" Securities 1 3S 4n2 8 -%5.
-% Market Caita$i9ation o# a$$ $iste" Securities 13S 4n 2 8 -5%.5
)% Liste" Securities = --. 1 A7'5), +7-., G7E, N7'-, P7-C2
B% Liste" Comanies are7 -E', Mutua$ #un" 7-B,Cororate +on"7-
C% A$$ Securities are "istri4ute" in '( Sectors8
1 +ankin!, Cement, Ceramics, Cororate +on", En!ineerin! / E$ectrica$
0ro"uct, ,oo" / A$$ie" 0ro"ucts, ,ue$ / 0o&er, Genera$ *nsurance, *CT,
Leasin! / ,inance , Leather/ ,oot&ear, Li#e *nsurance, Misce$$aneous ,
Mutua$ #un", 0aer / 0rintin!, 0harmaceutica$s / Chemica$ , Service /
roerty Deve$oment, Te$ecommunication an" Texti$e / C$othin!2

/<
Q
"ole of Stock Market in angladesh
-gricultural Sector : A!ricu$tura$ Loan an" Micro7Cre"it is c$assi#ie" Su47
stan"ar" i# non7er#ormin! #or '- months, Dou4t#u$ i# non7er#ormin! #or )5
months an" Loss i# non7er#ormin! #or more than 5E months% 3n"er the
existin! system sche"u$e" 4anks are re:uire" to maintain rovisions a!ainst
unc$assi#ie" an" su4stan"ar" $oans in a""ition to "ou4t#u$ an" $oss $oans%
They are a$$o&e" to 4ook interest a!ainst c$assi#ie" $oans on$y on cash 4asis%
Whether a cre"it is c$assi#ie" or not un"er the o46ective criteria, it is su46ecte"
to c$assi#ication un"er :ua$itative 6u"!ment i# any "ou4t arises re!ar"in!
reayment o# $oan% +en!a$ exorte" $ar!e vo$umes o# a!ricu$tura$ an"
in"ustria$ ro"ucts to Asia an" Euroe% Asian merchants an" Euroeans,
esecia$$y the En!$ish an" Dutch East *n"ia Comanies, investe" their money
to 4uy exorta4$e !oo"s an" sometimes rovi"e" $oca$ ro"ucers &ith $oan
#un"s% The vo$ume o# ro"uction o# #armers an" artisans &ere "een"ent on
the su$y o# cre"it 4y $oca$ an" #orei!n money$en"ers an" merchants% +ut the
cost o# 4orro&in! money &as very hi!h% *n '.-E7-', the En!$ish comanies<
"e4t in +en!a$ amounte" to ;s -%B mi$$ion% The Dutch Comany a$so
4orro&e" #rom the $oca$ caita$ market% *ts "e4t to the kasim4a9ar merchants
&ith interest amounte" to a4out ;s '%C mi$$ion in Setem4er '.-B% *n March
'.CB,
*ndustry and (ommerce as &e$$ as !overnment an" $oca$ authorities raise
caita$ #rom the caita$ market &hich er#orms severa$ imortant #unctions in
the rocess o# economic "eve$oment% Most imortant amon! them are the
romotion o# savin!s an" investment an" e##icient a$$ocation o# #un"s amon!
cometin! uses% 0articiants in the caita$ markets are many% They inc$u"e
the commercia$ 4anks, savin! an" $oan associations, cre"it unions, mutua$

/@
savin! 4anks, #inance houses, #inance comanies, merchant 4ankers,
"iscount houses, venture caita$ comanies, $easin! comanies, investment
4anks, investment comanies, investment c$u4s, ension #un"s%
)o&er5 gas crises throttle ne&ly set up paper mills
At $east #ive ne& aer mi$$s &ith com4ine" investment o# more than Tk C%E
4i$$ion have #ai$e" to 4e!in ro"uction even a#ter insta$$in! a$$ machinery "ue to
crises o# o&er an" !as, comany o##icia$s to$" the ,E% The com4ine"
ro"uction caacity o# these mi$$s is aroun" -CE,EEE tones a year, e:uiva$ent
to the country<s existin! caacity o# &ritin! an" rintin! aers, they a""e"%
GMy $ant is #u$$y rea"y to !o into ro"uction% +ut &e are not !ettin! !as #or
$on!% This is #rustratin!,G sai" ,ero9 Ahme", a "irector o# Creative 0aer Mi$$s
Lt" at ;u!an6, near Dhaka% The aer mi$$s is the country<s $ar!est sin!$e unit
havin! caacity o# -EE tones a "ay% GWe<ve investe" Tk '%'- 4i$$ion in this
$ant,G he a""e"% ;ea" More
*nsurance 8 *nsurance in"ustry &as a su4stantia$ su$ier o# $on!7term #un"s
in the caita$ market o# 0akistan% O# the BE in"i!enous insurance comanies,
'E &ere re!istere" in East 0akistan% Li#e insurance 4ecame an imortant
source o# caita$ #ormation in 0akistan% Tota$ investment o# a$$ insurance
comanies &as ;s )@5%@' mi$$ion at the en" o# '(5B% The caita$ market in
0akistan inc$u"e" the #o$$o&in!8 1a2 ost o##ice savin! 4anks, osta$ $i#e
insurance, "e#ense savin! certi#icates an" ri9e 4on"sN 142 the Nationa$
*nvestment 13nit2 TrustN 1c2 the *n"ustria$ Cororation o# 0akistanN 1"2
secia$ise" cre"it institutions #or a!ricu$ture, in"ustry, an" house74ui$"in! vi9%
the A!ricu$tura$ Deve$oment +ank, *n"ustria$ Deve$oment +ank, 0akistan
*n"ustria$ Cre"it an" *nvestment Cororation, an" the Jouse +ui$"in! ,inance
CororationN 1e2 insurance comaniesN an" 1#2 stock exchan!es%

/A
S6O' -/-L7S*S
Strength of angladesh Stock Market
Caita$ Market Deve$oment 0ro!ram in +an!$a"esh Stren!thenin! market
re!u$ation an" suervision Deve$oin! the caita$ market in#rastructure
Mo"erni9in! caita$ market suort #aci$ities *ncreasin! the $imite" su$y o#
securities in the market Deve$oin! institutiona$ sources o# "eman" #or securities
in the market an" *mrovin! o$icy coor"ination% The Caita$ market, an imortant
in!re"ient o# the #inancia$ system, $ays a si!ni#icant ro$e in the economy o# the
country%
-E'E AS A +;*GJT IEA; *, WE CAN ENS3;E To ensure an a"e:uate su$y
o# :ua$ity shares o# te$ecommunications, ener!y an" harmaceutica$ #irms, &hich
are attractive sectors #or #orei!n #un"s% Surroun"in! easy access to in#ormation
an" coor"ination amon! re!u$atory 4o"ies that nee"e" attention% +etter
coor"ination amon! the !overnment an" re$evant a!encies% E##orts amon! o$icy7
makers an" re!u$ators $ike the centra$ 4ank, tax authority, stock market &atch"o!
an" investment 4oar" &hich is nee"e" to sustain the resent in#$o& o# ort#o$io
investment in the country<s stock market%

/B
6eakness
DSE 0rice Maniu$ation *t has 4een o4serve" that the share va$ues o#
some ro#ita4$e comanies have 4een increase" #ictitious$y some times
that hamers the smooth oeration o# DSE%
De$ays o# sett$ement ,inancin! roce"ures an" "e$ivery o# securities
sometimes take an unusua$ $on! time #or &hich the money is 4$ocke" #or
nothin!%
*rre!u$ar ayment "ivi"en"s Some comanies "o not ho$" Annua$ Genera$
Meetin! an" eventua$$y "ec$are "ivi"en"s that "o not re#$ect the rea$ or
actua$ #inancia$ ositions o# the comany an" u$timate$y shareho$"ers
4ecome con#use"%
Se$ection o# mem4ershi Some mem4ers 4ein! the "irectors o# $iste"
comanies o# DSE $ook #or their o&n interest usin! the interna$ in#ormation
o# share market%
*mroer ,inancia$ Statement Many comanies o# DSE "o not #ocus rea$
osition o# the comany as some au"it #irms invo$ve in corrution &hi$e
rearin! #inancia$ statements% As a resu$t the shareho$"ers as &e$$ as
investors "o not have any i"ea a4out osition o# the comany%
Technica$ ro4$ems an" o$itica$ in#i!htin! The concet o# centra$i9ation o#
securities market has not 4een im$emente" that arises technica$
ro4$ems an" o$itica$ in#i!htin!%
Lack o# ski$$e" mano&er in DSE as &e$$ as #inancia$ an" non #inancia$
institutions invo$ve" in the securities market% The $ack o# roer o$icy
A4sence on #rame&ork that rovi"es incentives an" rotection to
investors%

/8
Opportunity
A$thou!h there is no meanin!#u$ 4ase #or a secon"ary market incororate 4on"s
to"ay, the +an!$a"esh economy may &e$$ !ro& at an attractive rate in the #uture, an"
i# it "oes, caita$7intensive in"ustries such as !as an" te$ecom &i$$ invest heavi$y%
Thus +an!$a"esh &i$$ eventua$$y nee" an e##icient caita$ market that can mo4i$i9e
"omestic an" #orei!n resources #or investment% ,or the time 4ein!5 ho&ever,
+an!$a"esh shou$" #ocus on creatin! a &e$$-or!ani9e", re!u$ate", an" attractive
rimary market in 4oth u4$ic an" rivate $acements% This "iscussion is a4out some
o# the ime"iments to the
"eve$oment o# #ixe"7income market in +an!$a"esh an" some &ays
to remove them%
'hreats
+an!$a"esh #in"s it "i##icu$t to move #or&ar" #or severa$ reasons8 &eak !overnance at
the institutiona$ an" market $eve$sN hi!h on er#ormin! assets amon! the nationa$i9e"
commercia$ 4anks1NC+s2N oor$y "e#ine" an" over$ain! resonsi4i$ities o# the
+an!$a"esh +ank, Securities an" Exchan!e Commission, an" Ministry o# ,inanceN
an" the $ack o# incentives an" rivate initiative to "rive market "eve$oments%

/D

"ecommendations
+an!$a"esh mi!ht &ork to imrove oerations in its !overnment
securities market, to create a market that rovi"es an interest rate
structure market that suort entire #inancia$ system an" a 4enchmark
#or cororate 4on" o##erin!%
,orce the $iste" comanies to u4$ish their annua$ reorts &ith actua$
an" roer in#ormation that can ensure the interests o# investors%
*ntro"uce automate" monitorin! system that may contro$ rice
maniu$ation, ma$ractices an" insi"e tra"in!%
*ntro"uce #u$$ comuteri9e" system #or sett$ement o# transactions%
,orce the $iste" comanies to "ec$are an" ay re!u$ar "ivi"en"s
throu!h con"uctin! Annua$ Genera$ Meetin!%
Take reme"ia$ action a!ainst the issues o# #ake certi#icates% +anks,
insurance comanies an" other #inancia$ institutions shou$" 4e
encoura!e" "ea$ in share 4usiness "irect$y%
0unish the mem4er 4rokers #or 4reachin! o# contract%

:E
Chapter +
Conclusion Part

:1


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