Part 1:

Capital market in Bangladesh

 Bangladesh capital market is one of the smallest in Asia but the third largest in the south Asia region.
 It has two full-fledged automated stock exchanges namely Dhaka Stock Exchange(DSE) and Chittagong Stock Exchange (CSE) and an over-
the counter exchange operated by CSE
 It also consists of a dedicated regulator, the Securities and Exchange Commission (SEC),
 Since, it implements rules and regulations, monitors their implications to operate and develop the capital market.It consists of Central
Depository Bangladesh Limited(CDBL),the only Central Depository in Bangladesh that provides facilities for the settlement of transactions
of dematerialized securities in CSE and DSE.

Background of Stock Exchange

 Dhaka Stock Exchange was set upon 28th April, 1954 that started formal trading on early 1956.
 Post–independence government did not promote a capital market during the first five years, and it was activated again in 1976 with 9 issues
on board. In 1995, a second bourse, the Chittagong Stock Exchange, was set up with sophisticated logistic support and modern management.

As an Organization

Both Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange is incorporated as a Public Limited Company. It is a Self-Regulatory
Organization and its activities are regulated by:
-         Articles of Association
-         Rules and regulations and bye-laws of the exchange
-         Companies Act 1994
-         Securities and Exchange Ordinance 1969
-         Securities and Exchange Rules 1987
Instruments :

The Listed Securities Including Mutual Funds, Debentures and Bonds in the DSE number 444 as on 23rd November, 2010.

 
 
 Market Composition

7%
1%
1%
0%
2%

Bank
5%
Cement
Ceramics Sector
Corporate Bond
Debenture
5% Engineering
Financial Institutions
Food & Allied
42%
Fuel & Power
3% Insurance
IT Sector
Jute
2%
Miscellaneous
Mutual Funds
Paper & Printing
Pharmaceuticals & Chemicals
Services & Real Estate
Tannery Industries
10% Telecommunication
Textile
Travel & Leisure
Treasury Bond

2% 1%
0%

7%
5%
0%
4%
0% 1% 1% 0%
Share Categorization: A, B, G, Z & N

The prime bourse of the country introduced "Group A" and "Group B" from July 2, 2000 based on its financial strength and performance to give
clear information to investors for taking informed decision. DSE has further categorized the securities by introducing "Group Z" which came into
effect from September 26, 2000. The Stock Exchange introduced another company category "Group G" on June 30, 2002. The categorization helps a
lot the investors in choosing companies before making investment decision. N Category- the newest one was launched through an order of SEC on
July 3,2006.
 
Criteria of the Share Category is as follows
“A’ Category Companies: Companies which are regular in holding the Annual General Meetings and have declared dividend at the rate of 10 per-
cent or more in a calendar year. (Mutual Funds, Debentures & Bond are being traded in this Category)
 
“B’ Category Companies : Companies which are regular in holding the Annual General Meetings but have failed to declare dividend at least at the
rate of 10 percent in a calendar year.
 
“Z’ Category Companies : Companies which have failed to hold the Annual General Meetings or failed to declare any dividend or which are not in
operation continuously for more than six months or whose accumulated loss after adjustment of revenue reserve, if any, is negative and exceeded its
paid up capital.
 
“G’ Category Companies : Greenfield Companies.
 
“N’ Category Companies : All newly listed companies except Greenfield companies will be placed in this category and their settlement system
would be like B-category companies.
 
Clearing and Settlement    
1. For A,B, G and N Group Instruments Trade for Trade Settlement &
Market Name System (for scrip Settlement Period
  only)  
Public   T+1 &T+3
Spot Trade for Trade T+1
Odd + Block Trade for Trade T+1 &T+3
2. For Z Group Instruments Public Trade for Trade  
Odd + Block Spot (Before Book-Closer)   T+3 & T+7
Foreign delivery Vs payment (DVP) Trade for Trade T+3 & T+7
transaction are settled in Trade for Trade T+1
Trade for Trade
 
Key Market Segments    
Public Market : For General Trading of Securities     
    Spot Market : For pre-book closer trading
Trading Lots :  
    Market lots varies from 1 share to 500 share
Block Market : depends at par value.
     
Odd Lot Market : Block Market transaction involved trading of Tk.
  : 0.5 million or above.
Foreign Transaction Any transaction for odd lot.
May be exerted using custodial banks (Standard
Chartered Bank, HSBC & City Bank NA) through
DVP process (delivery vs. payment)

PLAYERS

Investors: Anybody invests in primary or secondary market

Issuer: Any public limited company issue shares under SEC
Intermediaries: Brokerage houses, Mutual funds etc.

Turnover:
. Part 2

Principal market instruments:

Total (422)

Corporate Bond; 2

Treasury Bond; 186

Companies; 204

Mutual Funds; 30

Mutual Funds: Several Banks and brokerage house act as Mutual funds here in Bangladesh
Treasury Bonds : they are usually issued by Bangladesh Bank.

Corporate Bonds : They yield more return than treasury bills, but they are more risky. That’s why its popular to banks and investors

Companies Stock: usually of 2 types: common and preferred stock; yields considerable risks and returns

Reference:

http://www.dsebd.org/by_industrylisting1.php

http://www.cmda.gov.mv/docs/Anx-IV%20Bangladesh%20-%20Capital%20Market%20in%20Bangladesh%20Trands%20and%20Practices.pdf

http://www.dsebd.org/download/Annual_Report.zip

www.investopedia.com