bangladesh security & exchange comission

8/17/2019 Bangladesh Security & Exchange Comission

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A Critical Report On

“Bangladesh Security & Exchange Comission”

Group Name“ The Promising Stars ”

Department of Management Studies

Faculty of Business Studies

Jagannath ni!ersity

Date of SubmissionMA" #$% #&'(

Report on



Company act

GR!" DE#$%S

Sl' (ame %D

) Md)*hairul +slam B,'-&#&#&.&

* Md)A/id 0asan B,'-&#&#&12

+ Md)Mahfu3ur Rahman B,'-&#&#&1.

, Ra4an Das B,'-&#&#&2'

- "ousuf,Al,Mahdi B,'#&#&##'.. Shameha Ahmed Shuha B,'-&#&#&21

/ Farhana A5ter Sonia B,'-&#&#&66

0 7amanna A5ter B,'#&#&#&-&

1 Rafi8ul +slam B,'#&#&#&(-

)2 Monu 5han 9Mu/in: B,'#&#&#''2

Super!isor

3d' Rashedul 4o5ue

ecturer

Department of Management Studies

Faculty of Business Studies

Jagannath ni!ersity



Super!isor;s For<arding

==========)

3d' Rashedul 4o5ue

ecturer

Department of management studies

Faculty of /usiness studies

Jagannath ni!ersity



Declaration

+ do here/y solemnly declare that the <or5 presented in this Report has /een carried out /y me and has

not /een pre!iously su/mitted to any other ni!ersity>College>Organi3ation for an academic

8ualification>certificate>diploma or degree)

7he <or5 + ha!e presented does not /reach any e?isting copyright and no portion of this report is copied

from any <or5 done earlier for a degree or other<ise)

+ further underta5e to indemnify the Department against any loss or damage arising from /reach of the

foregoing o/ligations)

===============))

On 7he Behalf of the Group

3D'6hairul %slam

Roll no) B,'-&#&#&.&

BBA,$th Batch

Date@ MA" #$% #&'(

$c7no8ledgement9

All praises to almighty Allah <ho has created me and has gi!en me opportunities strength to <or5 <ith

people) ith deep interest <e had started our <or5) Our report on Bangladesh Securities ?change

ComissionE is 4ust a part of sylla/us of BBA program)



ith due respect + <ould li5e to sho< my heartiest respects and <arm than5s to all teachers of my

department % <ho ha!e pro!ided significant contri/ution /ehind preparing such a report on Bangladesh

Securities ?change ComissionE in BBA curriculum) Our team had an <onderful e?perience during

the research analysis of this topic) e <ould li5e to than5 our faculty mem/er% Md) Rashedul 0o8ue%

honora/le course instructor% Faculty of Business Studies of Jagannath ni!ersity for gi!ing us this

opportunity as <ell as for his constant guidance and support) Finally% the group <ishes to gi!e than5s all

the students of $th /atch of Management studies% Jagannath ni!ersity)

3D'6hairul %slam

Roll no) B,'-&#&#&.&

On /ehalf of the group

+D,B''&#&#&2#

Department of management studies

Faculty of /usiness studies

Jagannath ni!ersity% Dha5a

Executi:e summary

+n a mar5et economy% the capital mar5et plays a !ital role in the efficient allocation of scarce resources)

ell,functioning and de!eloped capital mar5ets augment the process of economic de!elopment through

different <ays such as encourage sa!ings% dra< more sa!ers and users into the in!estment process% dra<

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more institution into the intermediation process% help mo/ili3e non financial resources% attract e?ternal

resources% /ring disciplines in the sic5 organi3ations and in!est for organi3ing production of goods and

ser!ices and create employmen opportunities

7here is a saying that the stoc5 mar5et is the pulse of the economy) 7here is no dou/t that a !i/rant capital

mar5et is li5ely to support economy to /e ro/ust /ut t<o ma4or catastrophes in the capital mar5et of

Bangladesh <ithin one and half decades do not indicate the e?istence of a !i/rant mar5et rather these

sho< a highly ris5y and unsta/le capital mar5et) 7he recent surge in the capital mar5et has sha5en the

<hole country as millions of people /ecame insol!ent <ithin a !ery short span of time)

7he recent !olatility of the capital mar5et of Bangladesh is an a/normal phenomenon and such !olatility

tends to economic insta/ility) + /elie!e it <ill /e interested enough to loo5 into the causes of the pro/lem)

As such !olatility affects mass people 9many in!estors:% it is essential to try to minimi3e such !olatility /y

identifying the causes 9esp)% Regulatory failure: and sol!ing the pro/lems)

#able of content Declaration

$c7no8ledgement

Executi:e summary

%ntroduction

$bout Bangladesh Securities and Exchange Commission ; BSEC<

Stoc7e exchange

Dha7a stoc7 exchange ;DSE<

DSE "erformance



#he Chittagong Stoc7 Exchange ;CSE<

Management of CSE CHITTAGONG STOCK EXCHANGE (SHORT - SALE) REGULATIONS, 2005

Caue !" t!#$ ma%$et #%a& 'n 20 a#$g%!un* !" t&e ++ #%a& Rea!n !" t&e ++ #%a& a#$g%!un* !" t&e 20 #%a&

C!ma%'!n .et/een t/! ea%1'n*'ngRe#!mmen*at'!n "!% Se#u%'t'e an* E#&ange C!mm''!n (SEC)

C!n#3u'!n

Introduction:

Stoc5 mar5et is one of the most important financial institutions of any economy as <ell as Bangladesh) +t

opens door for companies to raise huge amount of capital from a lot of indi!idual in!estors inside

outside of a country)

+n!estors participate !oluntary to /uy o<nership of a company in the pu/lic mar5et) +t is said that stoc5

mar5et is an intermediary institution to ad4ust a gap /et<een surplus units and deficit units of an

economy) +n these days for millions of middle class educated people in Bangladesh in!esting in stoc5s is

more popular than in!esting in any other in!estment sectors) For an in!estor% stoc5s are more li8uid than

any other in!estment sources as it gi!es a/ility to sell and /uy o<nership anytime <ithout any hassle)

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Since #&&2 share prices of Bangladesh stoc5 mar5et ha!e

/een increasing steadily o!er the past four

years and it outperformed almost all the <orlds mar5ets)

7he financial year #&&.,&$ is 5no<n for the glo/al financial and economic crisis) Many de!eloped and

de!eloping countries fall into recession) 0o<e!er% it could not affect Bangladesh economy greatly) So% the

stoc5 mar5et of the country did not see any significant changes or fall) As CHD 9#&'': reported% financial

year #&&.,&$ <as a !olatile year /ut during this year Bangladesh economy /enefited from lo< prices of

import,a/le and <as a/le to a!oid negati!e pressure on its e?port of goods and ser!ices) Consecuti!e

outstanding performance of Bangladesh stoc5 mar5et in recent years /efore the crash lured millions ofin!estors to the stoc5 mar5et to in!est their little sa!ings) Before the stoc5 mar5et crash the mar5et had

/ecome a route of easy money for too many ne< indi!idual in!estors) 7hat is <hy millions of fresh

in!estors in!est their small sa!ing in the mar5et during this period) For these fresh in!estors in!esting in

this mar5et pro!ided a <ay to a!oid <or5ing a 4o/) !en some BO account holders <or5ed as

intermediaries of friends% relati!es to in!est their money in the stoc5 mar5et)

Finally% the stoc5 mar5et crashed and taught these in!estors that in!esting money in the stoc5 mar5et

in!ol!es ris5 too) But the lesson that in!estors are taught <rea5ed ha!oc on the li!es of millions of

innocent in!estors) 7he crash <iped out /illions of ta5a from the mar5et <here fresh% illiterate in!estors

<ere the main !ictim) +t has /een more than a year since the crash occurred)

Generally mar5et crash occurs /ecause of a sudden dramatic fall of stoc5 prices across a significant cross,

section of a stoc5 mar5et% resulting in a significant loss of paper assets) Crashes are dri!en /y panic as

much as /y underlying economic factors) 7hey often follo< speculati!e stoc5 mar5et /u//les) Stoc5

mar5et crashes are social phenomena <here e?ternal economic e!ents com/ine <ith cro<d /eha!ior and

psychology in a positi!e feed/ac5 loop <here selling /y some mar5et participants dri!es more mar5et

participants to sell) Generally spea5ing% crashes usually occur under the follo<ing conditions% a prolonged



period of rising stoc5 prices and e?cessi!e economic optimism% a mar5et <here H> ratios e?ceed long,

term a!erages% and e?tensi!e use of margin de/t and le!erage /y mar5et participants)

SEC

7he Bangladesh Securities and ?change Commission 9BSC: <as esta/lished on .th June%

'$$- as the regulator of the country;s capital mar5et through enactment of the Securities and

?change Commission Act '$$-) 7hrough an amendment of the Securities and ?change

Commission Act% '$$-% on Decem/er '&% #&'#% its name has /een changed as Bangladesh

Securities and ?change Commission from pre!ious Securities and ?change Commission) 7heCommission consists of a Chairman and four Commissioners <ho are appointed for fulltime /y

the go!ernment for a period of four years and their appointment can /e rene<ed only for further

one term% /ut the condition is that age can not e?ceed 16 in position during the tenure) 7he

Chairman acts as the Chief ?ecuti!e Officer 9CO: of the Commission) 7he Commission has

o!erall responsi/ility to formulate securities legislation and to administer as <ell) 7he

Commission is a statutory /ody and attached to the Ministry of Finance)

History

BSC <as esta/lished on . June '$$- under the Securities and ?change Commission Act%

'$$-) 7he Chairman and Mem/ers of the Commission are appointed /y the go!ernment and

ha!e o!erall responsi/ility to administer securities legislation) 7he Commission% at present has

three full,time mem/ers% e?cluding the Chairman) 7he Commission is a statutory /ody and

attached to the Ministry of Finance)

+nitially named simply as the Securities and Exchange Commission% on '& Decem/er #&'#% its

name <as officially changed to the Bangladesh Securities and Exchange Commission)

During the #&'' Bangladesh share mar5et scam the BSC <ithdra<ing !arious directi!es gi!en

earlier to help sta/ilise trading at the Dha5a Stoc5 ?change and <as criticised /y some

commentators for its actions during the su/se8uent crash)



Functions

•

Regulating the /usiness of the Stoc5 ?changes or any other securities mar5et)

• Registering and regulating the /usiness of stoc5,/ro5ers% su/,/ro5ers% share transfer

agents% merchant /an5ers and managers of issues% trustee of trust deeds% registrar of anissue% under<riters% portfolio managers% in!estment ad!isers and other intermediaries inthe securities mar5et)

• Registering% monitoring and regulating of collecti!e in!estment scheme including all

forms of mutual funds)

• Monitoring and regulating all authori3ed self,regulatory organi3ations in the securities

mar5et)

• Hrohi/iting fraudulent and unfair trade practices relating to securities trading in any

securities mar5et)

• Hromoting in!estors; education and pro!iding training for intermediaries of the securities

mar5et)

• Hrohi/iting insider trading in securities)

• Regulating the su/stantial ac8uisition of shares and ta5e,o!er of companies)

• nderta5ing in!estigation and inspection% in8uiries and audit of any issuer or dealer of

securities% the Stoc5 ?changes and intermediaries and any self,regulatory organi3ationin the securities mar5et)

• Conducting research and pu/lishing information)

The Present Commission

Hrofessor Dr) M) *hairul 0ossain Chairman

Hrofessor Md) 0elal ddin Ni3ami Commissioner

Mr) Md) Am3ad 0ossain Commissioner

Mr) Arif *han Commissioner

Mr) Md) A) Salam Si5der Commissioner



Spokesperson for the Commission

Mr. Md. Saifur Rahman

Executive Director

Administration & Finance (A&F) Department:

Administration and Finance department deals <ith human resources% all sorts of logisticacti!ities% to carry out day to day e?ecuti!e functions as <ell as finance accounts) As part ofAdministrati!e functions% administration officials performed acti!ities regarding correspondence<ith concerned ministries% recruitment training of human resources% procurement% motor pooletc) +n connection <ith financial acti!ities% finance accounts officials prepare /udget andfinancial statement of the Commission% collect re!enue dis/urse payments% maintainGratuity>Hension fund% General Contri/utory Hro!ident Fund etc) 7he department is headed /yMr) Farhad Ahmed% ?ecuti!e Director)

Officers of the department are:

Mr) Farhad Ahmed% ?ecuti!e Director

Mr) Md) A/ul *alam% Director

Mr) Mohammad A/ul 0asan% Director

Mr) 0afi3 Mohammed 0arunur Rashid% Deputy Director

Mr) M)A)Male8ue% Accounts Officer

Mr) Jalal ddin Ahmed% Assistant Director



Ms) Sahana Har!in% Assistant Director

Ms) Iiaun Nahar Sharif% Assistant Director

Mr) Md) Mahfu3ur Rahman 7alu5der% Assistant Director

Capital Issue Department (Initial Public Offering has been renamed):

Capital +ssue Department of the Commission accords consent to issue e8uity and de/t securitiesthrough initial pu/lic offer and also other than pu/lic offer) Hu/lic and pri!ate limited companiesare re8uired to ta5e consent of the Commission for raising capital <hose capital e?ceeds 75) '&million and '&& million respecti!ely) 7his department also appro!es the issuance of listed

companies; rights share and repeat pu/lic offer) 7he department is headed /y Mr) Md) Mah/u/ulAlam% ?ecuti!e Director)

Officers of the department are@

Mr) *amrul Anam *han% Director

Mr) Mohammad Re3aul *arim% Director

Mr) Hrodip *umar Basa5% Director

Mr) Mohammad Shamsur Rahman% Deputy Director

Mr) Mohammad Delo<ar 0ossain% Deputy Director

Mr) Md) Faru8 0ossain% Deputy Director

Mr) Md) *a<sar Ali% Deputy Director

Mr) Md) +8/al 0ossain% Assistant Director

Mr) Syed Muhammad Golam Mo<la% Assistant Director

Capital ar!et "egulator# "eforms & Compliance (C""C) Department:

CMRRC department drafts amendments of securities la<s% suggests reforms of the mar5et and pro!ides clarifications) 7he department is headed /y Ms) Ru5sana Cho<dhury% ?ecuti!eDirector




Ms) Ru5sana Cho<dhury% ?ecuti!e Director

Mr) Ripan *umar De/nath% Director

Mr) Mohammad Iu/air ddin Bhuiyan% Deputy Director

Central Depository System 9CDS: Department@

Central Depository System 9CDS: department super!ises acti!ities of Central DepositoryBangladesh imited 9CDB:% acti!ities of depository participants% demateriali3ation of listedcompaniesK shares under depository system% issue and transfer of securities in demateriali3edform% /eneficiary o<ners 9BO: accounts% and issue order>notification etc) related to depository

system% under the Depository Act% '$$$% the Depository Regulation% #&&& and Depository 9ser:Regulation #&&-) 7he department is headed /y Mr) Md) Ashraful +slam% ?ecuti!e Director )


Mr) Md) Ashraful +slam% ?ecuti!e Director

Mr) Syed Muhammad Golam Mo<la% Assistant Director

Chairman;s Office@

Function of the department is to conduct Commission Meeting and Coordination Meeting)


Ms) Farhana Faru8ui% Director

Mr) Md) Rashidul Alam% HS to Chairman

Corporate Finance Department 9CFD:@

7he Corporate Finance Department 9CFD: super!ises and monitors the listed companies afterissuance of primary shares in light of the securities la<s) Acti!ities of the department areo!ersight and reporting on issuers of listed securities related to on time su/mission of auditedfinancial statements% half yearly financial statements and annual reports>minutes% e?amination ofthe aforesaid financial statements and reports>minutes% appointment of statutory auditors in



compliance <ith securities la<s% utili3ation of fund 9+HO Rights:% compliance of conditions ofnotification regarding corporate go!ernance% compliance of other securities la<s% super!ision andfollo<,up of the special audits conducted /y the Commission% and re!ie< of e?isting securities

la<s% rules and regulations concerning CFD and proposed amendments thereto) 7he departmentis headed /y Mr) Md) Ano<arul +slam% ?ecuti!e Director


Mr) Md) Ano<arul +slam% ?ecuti!e Director

Mr) Md) A/ul *alam% Director

Mr) Mohammed Fa5hrul +slam Ma3umder% Deputy Director

Mr) Mollah Md) Mira3,s,Sunnah% Deputy Director

Enforcement Department@

nder the Securities la<s% the nforcement Department ta5es legal measures includingimposition of penalty against those <ho /reach>!iolate securities la<s in consideration of natureof crimes they commit) Hrior to ta5ing measures% it follo<s due process that includes gi!ing theaccused an opportunity of /eing heard) All departments of the Commission send referral tonforcement Department if they see any !iolation of securities la<s) 7he department is headed

/y Mr) Farhad Ahmed% ?ecuti!e Director )



Mir Mosharraf 0ossain% Director

Mr) Mohammad A/ul 0asan% Director

Ms) Mustari Jahan% Deputy Director

Mr) Md) 0ossain *han% Deputy Director

Mr) Mohammad Siddi8ur Rahman% Deputy Director

Mr) A/ul *alam A3ad% Deputy Director



+nternational Affairs Department@

+nternational Affairs Department 9+AD: is responsi/le for the follo<ing acti!ities

a: Maintaining relationship <ith all the capital mar5et regulators of the <orld

/: Maintaining constant liaison <ith the +nternational Organi3ation of Securities Commissions9+OSCO:% including all it;s Committees and or5ing Groups

c: All matters related to +OSCO Multilateral Memorandum of nderstanding 9MMo:)

7he department is headed /y Mr) Farhad Ahmed% ?ecuti!e Director )



Ms) Farhana Faru8ui% Director

a< Department@

Functions of egal department are assisting the la<yers engaged /y the Commission to conductthe cases filed /y or against the Commission in different courts% preparing <ritten o/4ection and

statement on cases filed against the Commission% preparing para <ise comments on <rit petitionfiled against the Commission% signing case related documents <ith affida!it /efore the concernedofficer of the court% preparing plaint>re8uisition for certificate cases% filing certificate cases andconducting those to reali3e the penalty imposed /y the Commission% !etting the letters% orders%

directi!es sent from different departments of the Commission and pro!iding legal opinion ondifferent matters sent from different departments of the Commission) Ms) Ru5sana Cho<dhury%?ecuti!e Director% heads the department)


Ms) Ru5sana Cho<dhury% ?ecuti!e Director

Mr) Md) Mah/u/er Rahman Chaudhury% Director

Mr) A)S)M) Mahmudul 0asan% Deputy Director

Mr) Muhammad Iiaur Rahman% Deputy Director

Mr) Munshi Md) namul 0a8ue% Assistant Director



Management +nformation Systems 9M+S: Department@

Functions of M+S department are de!elopment of automation for assisting different departmentsKacti!ities% de!elopment of capital mar5et monitoring system /ased on computeri3ed dataanalysis% informing all a/out securities la<s and other related matters through its <e/site<<<)sec/d)org% planning% operating% administering and supporting +7 infrastructure at SC andassisting the Commission in related areas) 7he department is headed /y Mr) Md) Ashraful +slam%?ecuti!e Director



Mr) Ra4i/ Ahmed% Director

Mutual Fund Special Hurpose Lehicle@

Mutual Fund Special Hurpose Lehicle Department deals <ith registration of mutual funds andspecial purpose !ehicles% their monitoring% super!ision and compliance% and any other functionrelated to them) 7he department is headed /y Mr) Md) 0asan Mahmud% ?ecuti!e Director)


Mr) Md) 0asan Mahmud% ?ecuti!e Director

Mr) Mahmoodul 0o8ue% Director

Mr) S5) Md) utful *a/ir% Deputy Director

Mr) Mohammad Amdadul 0o8ue% Deputy Director

Ms Sultana Har!in% Assistant Director

Registration icensing Department@

Registration Department loo5s after registration and rene<al of all stoc5 /ro5ers% stoc5 dealers%merchant /an5ers% credit rating agencies% depository participants% authori3ed representati!es%asset management companies% trustees% custodians% and permission regarding /ranch opening of



stoc5 /ro5ers) icensing of intermediaries help the Commission to discharge its o!ersightfunctions more effecti!ely) 7he department is headed /y Mr) Mah/u/ul Alam% ?ecuti!e

Director


Mr) Mah/u/ul Alam% ?ecuti!e Director

Mr) Shei5h Mah/u/ r Rahman% Director

Mr) Md) "usuf Bhuiyan% Deputy Director

Ms) mme Salma% Deputy Director

Md) Saiful +slam% Assistant Director

Mr) Md) Ashraful Alam% Assistant Director

Research De!elopment 9RD: Department@

Research and De!elopment Department of the Commission conducts in!estors; education program t<ice a month for the general in!estors% organi3e capital mar5et related presentation>seminar for !arious go!ernment and non,go!ernment organi3ations% deals <ith the

Commission;s !arious pu/lications li5e annual report 9Bangla nglish:% 8uarterlyreport9Bangla nglish:% 8uartery Bangla ne<s letter,Hari5rama% furnishes !arious reports andinformation to the go!ernment and other institutions including Ministry of Finance and differentregulatory authorities) 7he department is headed /y Mr) Md) Ashraful +slam% ?ecuti!e Director)



Mr) A/u Rayhan Mohammad Mutasim Billah% Deputy Director

Mr) Mohammad Iahirul 0a8ue% Assistant Director

Super!ision Regulation of Mar5ets and +ssuer Companies 9SRM+C:@

SRM+C Department super!ises stoc5 e?changes and deals <ith complaints lodged against issuercompanies as per securities la<s) 7he functions include monitoring of declaration a/out



sale>purchase>transfer of securities /y the sponsor >director of the listed companies% monitoringof monthly shareholding position of sponsors>directors% monitoring of disclosure of pricesensiti!e information of listed companies% appro!al of transfer of shares of listed companies

outside the stoc5 e?change% monitoring all acti!ities of stoc5 e?changes 9e?cept securitiestransactions:% ta5ing effecti!e measure to address complaints against issuer% monitoring ofAGMs>GMs and di!idend payments for all listed companies) 7he department is headed /y Mr)Md) Ano<arul +slam% ?ecuti!e Director


Mr) Md) Ano<arul +slam% ?ecuti!e Director

Mr) Md) Mansur Rahman% Director

Mr) Mohammad Sha5ha<at 0ossain Sar5ar% Deputy Director

Mr) Mohammed Na3rul +slam% Deputy Director

Ms) Anu Dey% Assistant Director

Super!ision Regulation of +ntermediaries 9SR+: Department@

Function of SR+ Department is super!ision of performing acti!ities of merchant /an5ers% stoc5

dealers>stoc5 /ro5ers% depository participants% security custodian /an5s% merchant /an5ers%security lenders /orro<ers and other mar5et intermediaries) SR+ department is headed /y Mr)Md) Saifur Rahman% ?ecuti!e Director


Mr) Md) Saifur Rahman% ?ecuti!e Director

Mr) Mohammad Jahangir Alam% Director

Mr) Ohidul +slam% Deputy Director

Mr) Mohammad Golam *i/ria% Deputy Director

Mr) Mohammad Al Masum Mirdha% Deputy Director

Sur!eillance Department@



Sur!eillance Department 5eeps !igil on securities transactions in Bangladesh) 7o identifyunla<ful trading acti!ities% sur!eillance department <atch and analy3e the trading in /oth thestoc5 e?changes through on,line and off,line sur!eillance system and prepare daily% <ee5ly

monthly trade reports at the end of trading /y pointing mar5et condition and o/ser!ation ofsur!eillance officials) +n order to ensure proper compliance of securities related la<s%sur!eillance department conducts in!estigation and en8uiry against in!ol!ing parties regardingmar5et manipulation% insider trading other malpractices% if any) 7he main purpose of the saidacti!ities are to ensure fair,trading and /uild,up confidence of in!estors in the securities mar5et)7he department is headed /y Mr) Md) Saifur Rahman% ?ecuti!e Director


Mr) Md) Saifur Rahman% ?ecuti!e Director

Mr) Mohammad Shafiul A3am% Director

Mr) Ra4i/ Ahmed% Director

Mr) Mohammad Ra5i/ur Rahman% Assistant Director

Ms Mahmuda Shireen% Assistant Director

Ms) Har!in A5ter% Assistant Director

Mr) Md) A/dus Salim% Assistant Director

Mr) Md) Nanu Bhuiyan% Assistant Director

Hro4ects@

ADB Hro4ect@ +mpro!ement of Capital Mar5et Go!ernance

7he pro4ect is a loan pro4ect financed /y Asian De!elopment Ban5 under the +mpro!ement ofCapital Mar5et and +nsurance Go!ernance Hro4ect ADB 7A oan,##-# BAN) Main o/4ecti!e ofthe pro4ect is de!elopment of the capital mar5et in Bangladesh)

Project Concerns:

Mr. Md. Saifur Rahman, Project Director & Executive Director

Stoc5 e?change



A stoc5 e?change is a form of e?change <hich pro!ides ser!ices for stoc5 /ro5ers and traders totrade stoc5s% /onds% and other securities) Stoc5 e?changes also pro!ide facilities for issue andredemption of securities and other financial instruments% and capital e!ents including the payment of income and di!idends) Securities traded on a stoc5 e?change include stoc5 issued /ycompanies% unit trusts% deri!ati!es% pooled in!estment products and /onds) Stoc5 e?changesoften function as continuous auction mar5ets% <ith /uyers and sellers consummatingtransactions at a central location% such as the floor of the e?change) 7o /e a/le to trade a securityon a certain stoc5 e?change% it must /e listed there) sually% there is a central location at least for record 5eeping% /ut trade is increasingly less lin5ed to such a physical place% as modern mar5etsare electronic net<or5s% <hich gi!es them ad!antages of increased speed and reduced cost of transactions) 7rade on an e?change is /y mem/ers only)7he initial offering of stoc5s and /ondsto in!estors is /y definition done in the primary mar5et and su/se8uent trading is done in thesecondary mar5et) A stoc5 e?change is often the most important component of a stoc5 mar5et)Supply and demand in stoc5 mar5ets are dri!en /y !arious factors that% as in all free mar5ets%affect the price of stoc5s 9see stoc5 !aluation:)7here is usually no compulsion to issue stoc5 !iathe stoc5 e?change itself% nor must stoc5 /e su/se8uently traded on the e?change) Such trading issaid to /e off e?change or o!er,the,counter) 7his is the usual <ay that deri!ati!es and /onds aretraded) +ncreasingly% stoc5 e?changes are part of a glo/al mar5et for securities) +n recent years%!arious other trading !enues% such as electronic communications net<or5s% alternati!e tradingsystems and dar5 pools ha!e ta5en much of the trading acti!ity a<ay from traditional stoc5 e?changes

0istory7he idea of de/t dates /ac5 to the ancient <orld% as e!idenced for e?ample /y ancientMesopotamian clay ta/lets recording interest,/earing loans) 7here is little consensus amongscholars as to <hen corporate stoc5 <as first traded) Some see the 5ey e!ent as the Dutch ast+ndia CompanyKs founding in '1&#% <hile others point to earlier de!elopments) conomist lri5eMalmendier of the ni!ersity of California at Ber5eley argues that a share mar5et e?isted as far /ac5 as ancient Rome) +n the Roman Repu/lic% <hich e?isted for centuries /efore the mpire<as founded% there <ere societies pu/lican rum% organi3ations of contractors or leaseholders <ho performed temple,/uilding and other ser!ices for the go!ernment) One such ser!ice <as thefeeding of geese on the Capitoline 0ill as a re<ard to the /irds after their hon5ing <arned of a

Gallic in!asion in -$& B)C) Harticipants in such organi3ations had partes or shares% a conceptmentioned !arious times /y the statesman and orator Cicero) +n one speech% Cicero mentionsshares that had a !ery high price at the time) Such e!idence% in MalmendierKs !ie<% suggeststhe instruments <ere trada/le% <ith fluctuating !alues /ased on an organi3ationKs success) 7hesocietas declined into o/scurity in the time of the emperors% as most of their ser!ices <ere ta5eno!er /y direct agents of the state)7rada/le /onds as a commonly used type of security <ere amore recent inno!ation% spearheaded /y the +talian city,states of the late medie!al and earlyRenaissance periods)+n ''2'% the authorities of the Repu/lic of Lenice% concerned a/out their



<ar,depleted treasury% dre< a forced loan from the citi3enry) Such de/t% 5no<n as prestiti% paid 6 percent interest per year and had an indefinite maturity date) +nitially regarded <ith suspicion% itcame to /e seen as a !alua/le in!estment that could /e /ought and sold) 7he /ond mar5et had

/egun)From '#1# to '-2$% Lenice ne!er missed an interest payment% solidifying the credi/ility of the ne< instruments) Other +talian city,states such as Florence and Genoa /ecame /ond issuersas <ell% often as a means of paying for <arfare) Bonds <ere traded <idely in +taly and /eyond% a /usiness facilitated /y /an5ers such as the Medicis)ar /et<een Lenice and Genoa resulted insuspension of prestiti interest payments in the early '-.&s% and <hen the mar5et <as restored% it<as at a lo<er interest rate) LeniceKs /onds traded at steep discounts for decades thereafter) Other /lo<s to financial sta/ility resulted from the 0undred "ears ar% <hich caused monarchs ofFrance and ngland to default on de/ts to +talian /an5s% and the Blac5 Death% <hich ra!agedmuch of urope) Still% the idea of de/t as a trada/le in!estment endured)As <ith /onds% theconcept of stoc5 de!eloped gradually) Some scholars place its origins as far /ac5 as ancientRome) Hartnership agreements di!iding o<nership into shares date /ac5 at least to the '-th

century% again <ith +talian city,states in the !anguard) Such arrangements% ho<e!er% typicallye?tended only to a handful of people and <ere of limited duration% as <ith shipping partnershipsthat applied only to a single sea !oyage)7he forefront of commercial inno!ation e!entuallyshifted from +taly to northern urope) 7he 0anseatic eague% an alliance of mercantile citiessuch as Bruges and Ant<erp% operated counting houses to e?pedite trade)By the late '6&&s%nglish merchants <ere e?perimenting <ith 4oint,stoc5 companies intended to operate on anongoing /asis one such <as the Musco!y Company% <hich sought to <rest trade <ith Russiaa<ay from 0anseatic dominance)7he ne?t /ig step occurred in the Netherlands) +n '1&#% theDutch ast +ndia Company <as formed as a 4oint,stoc5 company /ased in si? locations <ithshares that <ere readily trada/le) 7he stoc5 mar5et had /egun% /ut since stoc5s <ere not allo<edto /e traded <ith multiple addresses for a company% the stoc5s <ere redesignated as coming 4ust

from Amsterdam)7he Dutch ast +ndia Company% formed to /uild up the spice trade% operated asa colonial ruler in <hatKs no< +ndonesia and /eyond% a pur!ie< that included conducting militaryoperations against <ishes of the e?ploited nati!es and competing colonial po<ers) Control of thecompany <as held tightly /y its directors% <ith ordinary shareholders not ha!ing much influenceon management or e!en access to the companyKs accounting statements)0o<e!er% shareholders<ere re<arded <ell for their in!estment) 7he company paid an a!erage di!idend of o!er '1 percent per year from '1&# to '16&) Financial inno!ation in Amsterdam too5 many forms) +n'1&$% in!estors led /y one +saac e Maire formed historyKs first /ear syndicate% /ut theircoordinated trading had only a modest impact in dri!ing do<n share prices% <hich tended to /ero/ust throughout the '2th century) By the '1#&s% the company <as e?panding its securitiesissuance <ith the first use of corporate /onds)7he Dutch est +ndia Company <as formed in

'1#'% /ringing a ne< issuer to the /urgeoning securities mar5et) AmsterdamKs gro<th as afinancial center sur!i!ed the tulip mania of the '1-&s% in <hich contracts for the deli!ery offlo<er /ul/s soared <ildly and then crashed) Ne< techni8ues and instruments proliferated forsecurities as <ell as commodities% including options% repos and margin trading)Joseph de la Lega%also 5no<n as Joseph Henso de la Lega and /y other !ariations of his name% <as an Amsterdamtrader from a Spanish Je<ish family and a prolific <riter as <ell as a successful /usinessman in'2th,century Amsterdam) 0is '1.. /oo5 Confusion of Confusions e?plained the <or5ings of thecityKs stoc5 mar5et) +t <as the earliest /oo5 a/out stoc5 trading% ta5ing the form of a dialogue



/et<een a merchant% a shareholder and a philosopher% the /oo5 descri/ed a mar5et that <assophisticated /ut also prone to e?cesses% and de la Lega offered ad!ice to his readers on suchtopics as the unpredicta/ility of mar5et shifts and the importance of patience in in!estment)7he

year that de la Lega pu/lished also /rought an e!ent that helped spread financial techni8ues andtalent from Amsterdam to ondon) 7his <as the glorious re!olution% in <hich Dutch rulerilliam of Orange also ascended to nglandKs throne) illiam sought to moderni3e nglandKsfinances to pay for its <ars% and thus the 5ingdomKs first go!ernment /onds <ere issued in '1$-and the Ban5 of ngland <as set up the follo<ing year) Soon thereafter% nglish 4oint,stoc5companies /egan going pu/lic)ondonKs first stoc5/ro5ers% ho<e!er% <ere /arred from the oldcommercial center 5no<n as the Royal ?change% reportedly /ecause of their rude manners)+nstead% the ne< trade <as conducted from coffee houses along ?change Alley) By '1$.% a /ro5er named John Castaing% operating out of JonathanKs Coffee 0ouse% <as posting regular listsof stoc5 and commodity prices) 7hose lists mar5 the /eginning of the ondon Stoc5?change)One of historyKs greatest financial /u//les occurred in the ne?t fe< decades) At the

center of it <ere the South Sea Company% set up in '2'' to conduct nglish trade <ith SouthAmerica% and the Mississippi Company% focused on commerce <ith FranceKs ouisiana colonyand touted /y transplanted Scottish financier John a<% <ho <as acting in effect as FranceKscentral /an5er) +n!estors snapped up shares in /oth% and <hate!er else <as a!aila/le) +n '2#&% atthe height of the mania% there <as e!en an offering of a company for carrying out anunderta5ing of great ad!antage% /ut no/ody to 5no< <hat it is)By the end of that same year%share prices <ere collapsing% as it /ecame clear that e?pectations of imminent <ealth from theAmericas <ere o!er/lo<n) +n ondon% Harliament passed the Bu//le Act% <hich stated that onlyroyally chartered companies could issue pu/lic shares) +n Haris% a< <as stripped of office andfled the country) Stoc5 trading <as more limited and su/dued in su/se8uent decades) "et themar5et sur!i!ed% and /y the '2$&s shares <ere /eing traded in the young nited States)

Stoc7 Exchanges = Bangladesh

7he history of the Dha5a Stoc5 ?change 9DS: dates /ac5 to '$6# <hen the local go!ernmentdeemed it necessary to esta/lish a stoc5 e?change /ecause Ha5istani shares and securities <ere prohi/ited from /eing /ought or sold on the Calcutta Stoc5 ?change 9CS:) p until this point%

Ha5istan had /een trading 8uite profita/ly on the CS and had no need to esta/lish their o<nstoc5 e?change department) +n response to the prohi/ition the Hro!incial +ndustrial Ad!isoryCouncil made the decision to esta/lish a stoc5 e?change in astern Ha5istan)+nitially it <assuggested that instead of creating an independent stoc5 e?change% a /ranch of the *arachi Stoc5?change /e opened at Dha5a) 0o<e!er this proposal <as !ery unpopular <ith representati!esfrom ast Ha5istan <ho felt that it <as necessary to create a completely ne< stoc5 e?change inDha5a) 7his is <hat e!entually happened <ith different mem/ers of the stoc5 e?change purchasing mem/ership cards at the price of RS)#&&&) Bangladesh has t<o Stoc5 ?changes%



Dha5a Stoc5 ?change 9DS:% esta/lished in '$6( <here trading is conducted /y Computeri3edAutomated 7rading System and Chittagong Stoc5 ?change 9CS:% esta/lished in '$$6 <hich isalso conducted /y Computeri3ed Automated 7rading System ) All e?changes are self,regulated%

pri!ate sector entities <hich must ha!e their operating rules appro!ed /y the BSC)

Dha7a Stoc7 Exchange

$istor#:

7he necessity of esta/lishing a stoc5 e?change in the then ast Ha5istan <as first decided /y thego!ernment <hen% early in '$6#% it <as learnt that the Calcutta Stoc5 ?change had prohi/ited thetransactions in Ha5istani shares and securities) 7he Hro!incial +ndustrial Ad!isory Council of Ha5istansoon thereafter set up an organi3ing committee for the formation of a stoc5 e?change in ast Ha5istan) Adecisi!e step <as ta5en in the second meeting of the organi3ing committee held on the '-th march% '$6-)+n the ca/inet room% den /uilding% under the chairmanship of Mr) A) *haleeli% secretary of thego!ernment of ast Bengal% commerce% la/or and industries department at <hich !arious aspects of theissue <ere discussed in detail) 7hen the central go!ernment;s proposal regarding the opening a /ranch of*arachi Stoc5 ?change at Dha5a did not find fa!or <ith the meeting <ho felt that ast Ha5istan shouldha!e an independent stoc5 e?change) +t <as suggested that Dha5a Narayangan4 Cham/er of Commerce +ndustry should approach its mem/ers for purchasing the mem/ership cards at RS)#&&& each for the

proposed stoc5 e?change) +t <as thought that the location of the e?change should /e either at Dha5a% Narayangan4 or at Chittagong) An organi3ing committee <as appointed consisting of leading commercialand industrial personalities of the pro!ince <ith Mr) Mehdi +spahani as the con!ener in order to organi3ethe e?change)

7he cham/er informed its mem/ers and mem/ers of its affiliated associations of the proceedings of thea/o!e meeting% re8uesting them to intimate <hether they <ere interested in 4oining the proposed stoc5e?change) 7his <as follo<ed /y a meeting% at the cham/er of <hich a/out '&& persons <ere interested inthe formation of the e?change on July 2% '$6- 9&2)&2)'$6-:) 7he meeting in!ited . gentlemen to /ecome promoters of the e?change <ith Mr) M Mehdi +spahani as the con!ener and authori3ed them to dra< upthe memorandum and article of association of the e?change and proceed to o/tain register under thecompany;s act '$'-) 7he other 2 promoters of the e?change <ere Mr) J M Addision,Scott% Mr)

Mhodammed 0anif% Mr) A C Jain% Mr) A * *han% Mr) M Sha//ir Ahmed and Mr) Sa5ha<at 0ossin)

+t <as also decided that mem/ership fee <as to /e RS)#&&& and su/scription rate at RS)'6 per month) 7hee?change <as to consist of not more than '6& mem/ers) A meeting of the promoters <as held at thecham/er on Septem/er &-% '$6- 9&-)&$)'$6-: <hen it <as decided to appoint Orr Dignam Co) as thesolicitors to dra< up the memorandum and articles of association of the stoc5 e?change /ased on the rules pre!ailing in the stoc5 e?changes in other countries and /y ta5ing into account the local conditions)

http://www.dsebd.org/

http://www.dsebd.org/



7he . promoters incorporated the formation as the ast Ha5istan Stoc5 ?change Association td) onApril #.% '$6( 9#.)&()'$6(:) As pu/lic limited company the name <as re!ised to ast Ha5istan Stoc5?change td on June #-% '$1# 9#-)&1)'$1#:) Again on '()&6)'$1( the name of ast Ha5istan Stoc5

?change imited <as changed to Dha5a Stoc5 ?change td)

At the time of incorporation the authori3ed capital of the e?change <as RS) -&&&&& di!ided into '6&shares) Of RS) #&&& each and /y an e?tra ordinary general meeting held on ##)&#)'$1( the authori3edcapital of the e?change <as increased to 7*) 6&&&&& di!ided into #6& shares of 7*) #&&& each) 7he paidup capital of the e?change no< stood at 7*)(1&&&& di!ided into #-& shares of 7*) #&&& each) 0o<e!er-6 shares out of #-& shares <ere issued at 7*) .&%&&%&&& only per share of 7*) #&&& <ith a premium of7*) 2$%$.%&&&)

Although incorporated in '$6(% the formal trading <as started in '$61 at Narayangan4 after o/taining thecertificates of commencement of /usiness) But in '$6. it <as shifted to Dha5a and started functioning atthe Narayangon4 Cham/er Building in Moti4heel C>A)

On ')'&)'$62 the stoc5 e?change purchase a land measuring .)26 5attah at $F Moti4heel C>A from thego!ernment and shifted the stoc5 e?change to its o<n location in '$6$)

Function of D%

• isting of Companies 9As per isting Regulations:)

• Hro!iding the screen /ased automated trading of listed Securities)

• Settlement of trading 9As per Settlement of 7ransaction Regulations:)

• Gifting of share > granting appro!al to the transaction>transfer of share outside the trading

system of the e?change 9As per isting Regulations (#:)

• Mar5et Administration Control)

• Mar5et Sur!eillance)

• Hu/lication of Monthly Re!ie<)

• Monitoring the acti!ities of listed companies 9As per isting Regulations:)

• +n!estors grie!ance Cell 9Disposal of complaint /ye la<s '$$2:)

• +n!estors Hrotection Fund 9As per in!estor protection fund Regulations '$$$:)



Announcement of Hrice sensiti!e or other information a/out listed companies through online)

Formation

Dha5a Stoc5 ?change 9DS: is a pu/lic limited company) +t is formed and managed under Company Act

'$$(% Security and ?change Commission Act '$$-% Security and ?change Commission Regulation

'$$(% and Security ?change 9+nside 7rading: regulation '$$() 7he issued capital of this company is 75)

6&&%&&& <hich is di!ided up to #6& shares each pricing 75) #&&&) No indi!idual or firm can /uy more

than one share) According to stoc5 mar5et rule only mem/ers can participate in the floor and can /uy

shares for himself or his clients) At present it has #-. mem/ers) Mar5et capitali3ation of the Dha5a Stoc5

?change reached nearly $ /illion in Septem/er #&&2 and #2)( /illion on Dec $% #&&$)

anagement

7he management and operation of Dha5a Stoc5 ?change is entrusted on a #6 mem/ers Board

of Director) Among them '# are elected from DS mem/ers% another '# are selected from

different trade /odies and rele!ant organi3ations) 7he CO is the #6th ex officio mem/er of the

/oard) 7he follo<ing organi3ations are currently holding positions in DS Board@

• Bangladesh Bank

• !B

• President of nstitute of !hartered "ccountants of Bangladesh

• President of #ederation of Bangladesh !ham$ers of !ommerce and ndustries

• President of Metro%olitan !ham$ers of !ommerce and ndustries

• Professor of #inance De%artment of Dhaka &niversit'

• President of Dhaka !ham$er of !ommerce ( ndustr' )D!!*

DSE Reviews & Graphs for April 2014



DSE 3anagement>$dministration

• Managing Director

Hrofessor Dr) S<apan *umar Bala% FCMA

Hhone@ $61(1&'%$621#'&,'.% ?t,'&.

mail @ s5/aladse/d)org

mailto:[email protected]




• Chief Regulatory Officer

A)*)M) Iiaul 0asan *han% FCA

Phone: 9564601,9576210-18, Ext-291

Email : [email protected]!

• General Manager Company Secretary

Shai5h Mohammadullah% MBA 9+BA:% FCS

Hhone@ $61(1&'%$621#'&,'.% ?t,'&#

mail @ smullahdse/d)org% dse/ol,online)com

•General Manager 9Finance Accounts:

Ji/an Chandra Das% FCA

Hhone@ $61(1&'%$621#'&,'.% ?t,'6#

mail @ 4i/andse/d)org

•

General Manager 9Mar5et De!elopment:

Md) Samiul +slam

Hhone@ $61(1&'%$621#'&,'.% ?t,#-6

mail @ sislamdse/d)org









• General Manager 9 Administration:

*handa5er Asad llah

Hhone@ $61(1&'%$621#'&,'.% ?t,''$

mail @ asaddse/d)org

Board of Directors

4SE Ee#ut'e





HR 6 A*m'n't%at'!n 4'''!n

Human Re!u%#e 4ea%tment

Sl7

N!

7

Name4e'gnat'

!n

8A

X

E-ma'3 A**%e

+ S'ed "l "min Rahman D,M +-

+

s'eddse$d.org

/ Mohammad 0asir &ddin Re1a Manager //

+

mnure1adse$d.org

2 Mohammad 3aroon45r4

Rashid Pathan

Sr.

Executive

/6

6

%athandse$d.org

7 Md. Shahidul slam Sr.

Executive

++

8

msi9shahiddse$d.org

- Rashed &l 3a:ue Ra;ee$ Executive

/6

-

rasheddse$d.org

C!mm!n Se%'#e 4ea%tment

+ "$dul 3annan #akir D,M ++ hannandse$d.org



8at 8%e'*ent !" 4SESl Name Duration

Mr) Ahmed +8/al 0asan -'st Dec #&&( , '1th Fe/ #&&6

2 Mr) Md) Shahi8 *han '2th Fe/ #&&6 , &1th Fe/ #&&1

9 Mr) Md) A/dullah Bo5hari &2th Fe/ #&&1 , '(th Mar #&&2%

'6th Mar #&&2 , '(th May #&&.

: Mr) A/dul 0a8ue '6th May #&&. , #2th Fe/ #&&$

5 Mr) Md) Ra5i/ur Rahman #.th Fe/ #&&$ , #1th Mar #&'&

Mr) Md) Sha5il Ri3!i #2th Mar #&'& , '6th Mar #&'' %

'1th Mar #&'' , '(th Mar #&'#

; Mr) Md) Ra5i/ur Rahman '6th Mar #&'# , '(th Jun #&'-

< Mr) Ahasanul +slam '6th Jun #&'- , '(th Fe/ #&'(

"ast Chairmen of DSE



"ast Chairmen of DSE

Sl(ame

Duration

' Mr) Ahmad Fa3lur Rahman '$2#,'$26

# Mr) *hurshid Alam '$21,'$2.

- Mr) Nur,,Alam Siddi8ue '$2$

( Mr) *h<a4a A/dul Puddus '$.&

6 Mr) Nur,,Alam Siddi8ue '$.'

1 Mr) *h<a4a A/dul Puddus '$.#

2 Mr) *hurshid Alam '$.-,'$.6

. Mr) 0emayet ddin Ahmed '$.1

$ Mr) *a3i Firo3 Rashid '$.2,'$.$

'& Mr) *h<a4a A/dul Puddus '$$&

'' Mr) Aminul +slam *han '$$'% '$$#

'# Mr) *hurshid Alam '$$-% '$$(

'- Mr) +mtiya3 0usain '$$6% '$$1

'( Mr) M) A 0u8 0o<lader '$$2

'6 Mr) Md) Ra5i/ur Rahman '$$.% '$$$

'1 Mr) Md) Shahi8 *han #&&&% #&&'



'2 Mr) Ahmed +8/al 0asan #&&#% #&&-

Chittagong Stoc7 Exchange

$istor#:

7he Chittagong Stoc5 ?change 9CS: /egan its 4ourney in '&th Octo/er of '$$6 from

Chittagong City through the cry,out trading system <ith the promise to create a state,of,the art

/ourse in the country)Founder mem/ers of the proposed Chittagong Stoc5 ?change approached

the Bangladesh Go!ernment in January '$$6 and o/tained the permission of the Securities and

?change Commission on Fe/ruary '#% '$$6 for esta/lishing the countryKs second stoc5

e?change) 7he ?change comprised of t<el!e Board mem/ers% presided /y Mr) Amir *hosru

Mahmud Cho<dhury 9MH: and run /y an independent secretariat from the !ery first day of its

inception)CS <as formally opened /y then 0onK/le Hrime Minister of Bangladesh on

No!em/er (% '$$6)

'ision:

Aspire a glo/al standard transaction place of securities and financial product)

ission:

Hractice a set of core !alues to /uild competency in compliance% di!ersification and technology

so that an accessi/le platform% mar5et confidence and <ealth ma?imi3ation scope can /e

ensured)

Core alues:

• Lalue for people

• 7ransparency



• ?cellence

• 0armony

• Commitment

• +ntegrity

Obecties:

• +ncrease /usiness turno!er

• Moderni3e trading system

• nsure effecti!e relationship management

• Achie!e high le!el of confidence professionalism

• Engage in %roduct and market diversi<cation

• !ontri$ute to ca%ital market %olic' develo%ment

• Ensure exchange related :ualit' services



"*+,ATO"- %T"+CT+" O'"'I.

EG$ B$S%S = CSE

As legal entity CS is a not,for,profit pu/lic limited company) All of its '(. mem/ers are

corporate /odies) +t has a separate secretariat independent of policyma5ing Board) 7he Board

comprises of /ro5ers and non,/ro5ers directors <ith e8ual proportion to ensure the

transparency)7he Board constituted Committees to delegate such functions and authority as it

may deem fit) 7here is an independent secretariat headed /y a full time Chief ?ecuti!e Officer)

CS acti!ities are regulated /y itKs o<n regulations and /ye la<s along <ith the rules% orders and

notification of the BSC)

C% A,, %$A" P"IC I/D0

A good mar!et representatie inde1 should inole

• Scientific calculation formulas <ith clear ad4ustment procedure



• ogical scrip selection criteria

• Distinct /ase date

• Meaningful /ase !alue

7he only inde? the CS has /een maintaining since '&th Octo/er '$$6 is a A S0AR HR+C

+NDQ using Chained Haasche method) +t faces 8uestion of clarity) 7his inde? <as su/4ect to

unusual ups and do<ns and <ithout a distinct /ase !alue) 7herefore in need of a clean slate CS

finds the date ' January #&&& is the /est date to start ne< +ndices@

An All Share Hrice +nde? <ith ne< formula and /ase date -&th Decem/er '$$$ 9the last day of

the year: and ne< /ase inde? of thousand 9to mar5 the millenium: <ill replace the e?isting one

and A completely ne< Selecti!e +nde? incorporating -& scrips <ith /ase date -&th Decem/er

'$$$ and /ase inde? '&&&)

e ha!e studied inde? of a num/er of /ourses and found that the aspayers Method to calculate

inde? is regarded as the most transparent and scientific method) 7he method is descri/ed /elo<

in this <rite,up)

7he follo<ing conditions <ill /e follo<ed <hile calculating the All Share Hrice +nde?@

• All Share Hrice +nde? does not necessarily mean that all the listed stoc5s should /e

considered for calculating the inde?) +nacti!e stoc5s not /eing traded for consecuti!e si?months <ill not /e considered in the calculation)

• Only the acti!e scrips <ill /e considered for calculating the inde?)

• Mutual Funds and De/t securities <ill not /e considered in calculating inde?)

• A ne<ly listed scrip <ill /e included in the inde? after fi!e consecuti!e trading days)

• Only normal trades should /e considered in calculating inde?)

• All share price inde? <ill /e calculated only once in a day , after the trading hour in theon line system)

• No changes in num/er of shares <ill /e allo<ed during LC7OR session)

• +nde? committee <ill re!ie< the inde? , its criteria% performance% calculation method

after e!ery si? month)



• +nde? Base Date is -&th Decem/er '$$$

• Base Day inde? '&&&

C% %,CTI' I/D0 (C% 2 34)

At the /eginning of ne< millennium a selecti!e +nde? <ill /e introduced% <hich is found to /e

!ery popular in almost all the de!eloped e?changes <orld<ide) 0ere the selection criteria play a

!ery important role in forming an inde?)

Criteria for a %electie Inde1

+t pro!ides a discussion a/out the important criterion for an inde?% <hich is to /e used as a

/enchmar5 of performance) 7he criterion is that the mo!ement of the inde? fully represents the

aggregate mo!ement of the inde?Ks constituent assets and that the inde?Ks returns are reali3a/le

/y an in!estor <ho has held a portfolio identical to the asset mi? of the inde?) Lalue,eighted

+nde? satisfies the a/o!e criterion)

Selection of stoc5s for the /enchmar5 inde? should /e such that it represents the <hole mar5et)+n addition it <ill /e guaranteed that the constituent stoc5s ha!e high percentage co!erage of the

mar5et in terms of mar5et !alue) 7his <ill ma5e it difficult if not possi/le for a fe< in!estors to

manipulate the mo!ement of the inde?)

C"IT"IA FO" C%234 I/D0

9After re!ision in the isting +nde? Committee Meeting held on #.th Apr #&&$:7<o layer methods are follo<ed for selection of listed companies in the CS,-& +nde?) +n the

first layer method% /asic criteria are considered for primary selection)



5A%IC C"IT"IA

• Must /e listed <ith the Chittagong Stoc5 ?change imited)

• +n case of +HO>Ne< +ssue% this should /e on listing either <ith DS or CS for a

minimum period of # years or remained in Commercial Hroduction in Bangladesh for theminimum same period prior to its listing)

• Companies that did not hold their Annual General Meetings regularly <ill not /e

considered)

• Minimum mar5et capitali3ation must /e 75) #&& million and at least t<o times of paid,up

capital)

• Must ha!e at least #& free floating share capital) Free floating share capital shall mean

the share capital <hich <ill e?clude Go!tKs holding 9other than +CB:% Sponsors>Directors their AssociatesK holding plus other loc5ed,in portions)

• Must ha!e positi!e re!enue reser!e> retained earnings)

• Must /e traded for at least 6& trading days of the si? monthly re!ie< period)

• Haid di!idend in any of the last # years)

• Company ha!ing negati!e arning Her Share 9HS: for last t<o consecuti!e years <ill

not /e considered)

• Company falling under settlement category KIK <ill not /e considered)

• Financial +nstitution falling under the pro/lem list of Bangladesh Ban5 <ill not /e

considered pro!ided such information is a!aila/le from an accepta/le source)

• Company failing to pay the listing fees and>or penalty imposed under the isting

Regulations of CS for a period of # years <ill not /e considered)

• At least one company from each sector ha!ing minimum se!en companies <ill /e ta5en

in the inde? if the scrip satisfies the a/o!e criteria and achie!es the minimum point 96& points: as e!aluated on the /asis of the follo<ing Selection Criteria) 7he sector ha!ingless than se!en companies <ill /e considered to /e a part of Miscellaneous Sector)



On /eing 8ualified on the /asis of the Basic Criteria% the companies are re8uired to meet the

follo<ing further Selection Criteria to ha!e the final /erth in CS,-& +nde?)

%,CTIO/ C"IT"IA

• 0igher Net Assets Lalue 9NAL: per share

• 0igher rate of arning Her Share 9HS:

• 0igher rate of Di!idend

• o<er Hrice arning 9H: Ratio

• 0igher Di!idend "ield 9D":

• 0igher rate of free floating in e8uity

• arger num/er of shareholders

• 0igher li8uidity in terms of trading day

• 0igher li8uidity in terms of num/er of contract

• onger duration of continuous remaining in the CS,-& +nde?

• Regular payment of listing fees

Conditions to be follo6ed 6hile forming the selectie Inde1

• Only the acti!e scrips <ill /e considered for calculating the inde?)

• Mutual Funds and De/t securities <ill not /e considered in this inde?)

• Only normal pu/lic mar5et trades <ill /e considered)

• Selecti!e +nde? <ill /e refreshed after - minutes time inter!al during online trade)



• At the time of update the Selecti!e +nde? <ill consider the eighted A!erage Hrice for

each constituent stoc5) 9?ample anne?ed:

• No changes in num/er of shares <ill /e allo<ed during the /ussiness sessions)

• +nde? committee <ill re!ie< the inde? , its criteria% performance% calculation method

after e!ery si? month)

• +nde? Base Date is -&th Decem/er '$$$

• Base Day inde? is set to /e '&&&)

C% %electie Categories Inde1 7 C%C0

Chittagong Stoc5 ?change 9CS: launched a ne< inde? named CSCQ 9CS Selecti!e

CategoriesK +nde?: comprised A% B G category companies from '(th Fe/ruary #&&( to replace

the earlier CS 7rade Lolume eighted +nde?)

7he Base Date of this inde? is '6th April #&&' 9<hen A% B I category <ere introduced: and

Base Lalue is set to '&&&)

7he ne< inde? includes all /ut not the I category companies) 7his also e?cludes the

companies>scrips <hich are de/t securities% mutual funds% suspended for indifinte period andnon,traded for preceding si? months of re!ie< meeting) 7he inde? <ill /e re!ie<ed in the +nde?

Committee Meeting after e!ery si? months li5e other t<o indices of CS)

7his inde? <ill /e disseminated on line to all the Bro5ersK or5 Stations 9BSs: during trading

sessions and after e!ery three minutes the inde? !alue <ill /e refreshed)

According to the said /ases of this inde? the !alue of the inde? on ''th Fe/ruary #&&( stands at

''16)-26()

7he construction principle of this inde? /ased on aspeyres method li5e other t<o CS indices%

CS All Share Hrice +nde? and CS,-& +nde?) +t may /e mentioned here that the /ase !alue of

these t<o indices <as also set to '&&& <ith a /ase date -&th Decem/er '$$$) 7he current !alues9as on ''th Feruary #&&(: of CS All Share Hrice +nde? and CS,-& +nde? are '1&')6( and

'(.-)1& respecti!ely)



?

4ighest :alue 9'#161)$2$#o8est :alue 9$26-)$#61

Date =rom 9#2 May% #&'-Date #o 9#2 May% #&'(

#rading Days 9#-$

ndices ,ra%h From #2 May% #&'- 7o #2 May% #&'(

?

4ighest :alue 9$6#-)&662

o8est :alue 92-1')#-11Date =rom 9#2 May% #&'-

Date #o 9#2 May% #&'(



Chittagong Stoc7 Exchange

.ee!l# ar!et %ummar#

$istorical

ar!et

%ummar#

$ighest "ecords

T't3e =a3ue 4ate

7otal Num/er of 7rades 1&1(6 No! #6% #&'&

7otal 7rade Lolume ($&212.1 No! #6% #&'-

7otal 7raded Lalue in 7a5a -%(&(%2#(%'-' Oct #.% #&'&

7otal Closing Mar5et

Capital in 7a5a

-%'6$%#6-%($2%6&. Dec 6% #&'&

CS -& +nde? ##1#2)1- Dec 6% #&'&

CSCQ +nde? '1'##)(# Dec 6% #&'&

CASH+ +nde? #($#&).$ Dec 6% #&'&



5OA"D% OF DI"CTO"%

• Dr) Muhammad A/dul Ma3id

ChairmanBangladesh Dia/etic Samity9BADAS:

B+RDM Bha/an (F*a3i Na3rul +slam A!enue% Shah/agh% Dha5a '&&&

• Hrof) Mamta3 ddin Ahmed% FCMA

Director

Department of Accounting +nformation Systemsni!ersity of Dha5a)

• Dr) Mohammad Ayu/ +slam

DirectorDepartment of Accounting +nformation Systems

ni!ersity of Chittagong % Bangladesh)

• Dr) Moinul +slam Mahmud

Director

Sensi!e 9H!t: td) '(% Jamal5han% Ctg)

• Mr) Md) Shafiul +slam

Director

$6>B% D)+)7) RoadMali/agh Cho<dhury HaraDha5a,'#'$% Bangladesh)

http://www.cse.com.bd/chairman.php

http://www.cse.com.bd/chairman.php



• Mr) Sho<5at 0ossain FCA

Director

0oda Lasi Cho<dhury Co) Chartered Accountants

Del<ar Bha/an%(th Floor% '&(% Agra/ad C>A% Chittagong)

• Mr) Nasir ddin Cho<dhury

Director

astern Group% Noor Arcade 9#nd Floor:%$>A% Ju/ilee Road % Chittagong)

• Mr) Mir3a Salman +spahani

Director

Chittagong Stoc5 ?changeC>O +SH+ Securities td)

+spahani Building% Chittagong

• Mr) Mohammad *hairul Anam Cho<dhury

Director

an5aBangla Securities td)DS Anne? Building 9'st Floor:$>% Moti4heel C>A% Dha5a,'&&&

• Mr) Mohammed Mohiuddin% FCMA

Director

+sland Securities td)Faru5 Cham/er 91th Floor: '(&-% S5) Mu4i/ Road Agra/ad% Chittagong)

• Mr) Md) Shamsul +slam% FCA

Director

Be Rich imited% CF 7o<er9$th Floor:'###% S5) Mu4i/ Road%Agra/ad% Chittagong)



• Mr) Syed Sa4id 0usain3anaging Director

Chittagong Stoc5 ?change tdCS Building% '&.&% S5) Mu4i/ Road%

Agra/ad% Chittagong,('&&)



A/A*/T TA



Name Designation

Mr) Syed Sa4id 0usain Managing Director

Mr) Ahmad Da<ood Chief Financial Officer

Mr) Md) Ghulam Faru8ue Deputy General Manager% Dha5a Office

Mr) Mohammed Ma3/ah Deputy General Manager% 0ead of

+nformation 7echnology Ser!ices

Ms) Sonia 0ossain Deputy Deputy General Manager% Mar5et

Regulations

Mr) Mohammad Shamsur Rahman Deputy General Manager% Corporate

Finance

Mr) Md) Mortu3a Alam Deputy General Manager% Mar5et

Regulations

Mr) Mohammad Monirul 0a8ue Deputy General Manager% Clearing

DH Ser!ices

Mr) Mohammad Ashraf ddin Manager% Finance

Ms) Farida "esmin Manager% Corporate Finance

Mr) +mtia3ul +slam Manager% Mem/er Ser!ices

Ms) +srat Jahan Manager% isting

Mr) Adnan A/dur Ra8ui/ Manager% Mem/er Ser!ices

Mr) Md) *haled 0amidi Manager% Mar5et De!elopment

Mr) Minha3 ) A Cho<dhury Manager% General Affairs

Mr) Md) *arimullah Manager% General Affairs



%nitial public offering ;%"<

+nitial pu/lic offering 9+HO: or stoc5 mar5et launch is a type of pu/lic offering <here shares of

stoc5 in a company are sold to the general pu/lic% on a securities e?change% for the first time)

7hrough this process% a pri!ate company transforms into a pu/lic company) +nitial pu/lic

offerings are used /y companies to raise e?pansion capital% to possi/ly moneti3e the in!estments

of early pri!ate in!estors% and to /ecome pu/licly traded enterprises) A company selling shares is

ne!er re8uired to repay the capital to its pu/lic in!estors) After the +HO% <hen shares trade freely

in the open mar5et% money passes /et<een pu/lic in!estors) Although an +HO offers many

ad!antages% there are also significant disad!antages% chief among these is the costs associated<ith the process and the re8uirement to disclose certain information that could pro!e helpful to

competitors% or create difficulties <ith !endors) Details of the proposed offering are disclosed to

potential purchasers in the form of a lengthy document 5no<n as a prospectus) Most companies

underta5e an +HO <ith the assistance of an in!estment /an5ing firm acting in the capacity of an

under<riter) nder<riters pro!ide se!eral ser!ices% including help <ith correctly assessing the

!alue of shares 9share price:% and esta/lishing a pu/lic mar5et for shares 9initial sale:) Alternati!e

methods such as the dutch auction ha!e also /een e?plored) +n terms of si3e and pu/lic

participation% the most nota/le e?ample of this method is the Google +HO) China has recently

emerged as a ma4or +HO mar5et% <ith se!eral of the largest +HOs ta5 ing %lace in that countr'.

$istor#:

7he earliest form of a company <hich issued pu/lic shares <as the pu/licani during the Roman

Repu/lic) i5e modern 4oint,stoc5 companies% the pu/licani <ere legal /odies independent of

their mem/ers <hose o<nership <as di!ided into shares% or parties) 7here is e!idence that theseshares <ere sold to pu/lic in!estors and traded in a type of o!er,the,counter mar5et in the

Forum% near the 7emple of Castor and Hollu?) 7he shares fluctuated in !alue% encouraging the

acti!ity of speculators% or 8uaestors) Mere e!idence remains of the prices for <hich partes <ere

sold% the nature of initial pu/lic offerings% or a description of stoc5 mar5et /eha!ior) Hu/licanis

lost fa!or <ith the fall of the Repu/lic and the rise of the mpire)



+n March '1&# the Lereenigde Oost,+ndische Compagnie 9LOC:% or Dutch ast +ndia Company

<as formed) 7he LOC <as the first modern company to issue pu/lic shares% and it is this

issuance% at the /eginning of the '2th century% that is considered the first modern +HO) 7he

company had an original paid,up share capital of 1%(#(%6.. guilders) 7he a/ility to raise this

large sum is attri/uta/le to the decision ta5en /y the o<ners to open up access to share

o<nership to a <ide pu/lic) !eryone li!ing in the nited Hro!inces had an opportunity to

participate in the Company) ach share <as <orth -&&& guilders 9roughly e8ui!alent to

S'%6&&:) All the shares <ere trada/le% and the shareholders recei!ed receipts for the purchase)

A share certificate documenting payment and o<nership such as <e 5no< today <as not issued

/ut o<nership <as instead entered in the company;s share register)

,argest IPO mar!ets:

Hrior to #&&$% the nited States <as the leading issuer of +HOs in terms of total !alue) Since that

time% ho<e!er% China 9Shanghai% Shen3hen and 0ong *ong: has /een the leading issuer% raising

2- /illion 9almost dou/le the amount of money raised on the Ne< "or5 Stoc5 ?change and

NASDAP com/ined: up to the end of No!em/er #&'') 7he 0ong *ong Stoc5 ?change raised

-&)$ /illion in #&'' as the top course for the third year in a ro<% <hile Ne< "or5 raised -&)2

/illion.

Fluctuation

.h# Do %toc! Prices Fluctuate8

Stoc5s go up /ecause more people <ant to /uy than sell) hen this happens they /egin to /id

higher prices than the stoc5 has /een currently trading) On the other side of the same coin%

stoc5s go do<n /ecause more people <ant to sell than /uy) +n order to 8uic5ly sell their shares%

they are <illing to accept a lo<er price)0a!ing said this% <eKll ta5e a loo5 at the !arious reasons

that cause traders to <ant to /uy or sell a stoc5)+t is possi/le to loo5 at the financial statements of a company and determine <hat the company is <orth) +n!estors <ho ta5e this approach are said

to e?amine the companyKs fundamentals) 7hey attempt to find an under!alued stoc5 , one that

is trading /elo< itKs /oo5 !alue) 7hey feel that sooner or later other traders <ill reali3e that the

company is <orth more than the current price and /egin /idding it up)Another in!estment

psychology it called the technical approach) 7his is <hen traders closely e?amine charts of the

stoc5Ks past performance loo5ing for trends that they feel <ill /e repeated in the near future)



7hese traders also loo5 at <hat is happening in the mar5et as a <hole trying to anticipate the

effect it <ill ha!e on an indi!idual stoc5)Sometimes companies trade at half their /oo5 !alue

<hile at other times they may trade at dou/le% triple% or e!en higher) hen this happens it can

create some sudden and large price s<ings) 7his !olatility is <hat ma5es it possi/le to ma5e

large profits in the mar5et) +t is also responsi/le for huge losses)7he stoc5 mar5et is essentially a

giant auction <here o<nership of large companies is for sale) +f some in!estors thin5 that a

particular company <ill /e a good in!estment% they are <illing to /id the price up) By the same

to5en% <hen many in!estors <ant to sell a stoc5 at the same time the supply <ill e?ceed the

demand and the price <ill drop)atching the stoc5 mar5et can /e li5ened to <atching a /all

/ounce) +t goes up and comes do<n and then goes right /ac5 up) 7his can /e e?tremely

frustrating for many in!estors <ho <ant it to go up in a steady pattern) +t is this !olatility in the

mar5et as a <hole and in the indi!idual stoc5s that the e?perienced trader profits from) +n the

a/sence of a lot of e?perience% the indi!idual in!estor needs a pro!en source of information anddirection) Many in!estors 9as opposed to traders: ha!e a /uy and hold philosophy) 7his <ould

<or5 <ell in a constantly rising mar5et) nfortunately% the stoc5 mar5et does not go up in a

straight line) 7here are ups and do<ns that frustrate this type of in!estor) 7oday many in!estors

ha!e /ecome traders <ho /uy and sell on the fluctuations of the mar5et and the indi!idual

stoc5s) 7hese traders ma5e money in any mar5et , up or do<n

.h# %toc!s *o +p8

• gro<ing sales and profits

• a great ne< president hired to run the company

• an e?citing ne< product or ser!ice is introduced

• more e?citing ne< products or ser!ices are e?pected

• the company lands a /ig ne< contract

• a great re!ie< of a ne< product in the press or on 7L

• the company is going to split its stoc5

• scientists disco!er the product is good for something else



• some famous in!estor is /uying shares

• lots of people are /uying shares

• an analyst upgrades the company% changing her recommendation from% for instance%

/uy to strong /uy

• other stoc5s in the same industry go up

• a competitorKs factory /urns do<n

• the company <ins a la<suit

• more people are /uying the product or ser!ice

• the company e?pands glo/ally and starts selling in other countries

• the industry is hot ,, people e?pect /ig things for good reasons

• the industry is hot ,, people donKt understand much a/out it% /ut theyKre /uying any<ay

• the company is /ought /y another company

•

the company might /e /ought /y another company

• the company is going to spin,off part of itself as a ne< company

• rumors

• for no reason at all

.h# %toc!s *o Do6n8

• profits slipping% sales slipping

• top e?ecuti!es lea!e the company

• a famous in!estor sells shares of the company



• an analyst do<ngrades his recommendation of the stoc5% may/e from /uy to hold

• the company loses a ma4or customer

• lots of people are selling shares

• a factory /urns do<n

• other stoc5s in the same industry go do<n

• another company introduces a /etter product

• thereKs a supply shortage% so not enough of the product can /e made

• a /ig la<suit is filed against the company

• scientists disco!er the product is not safe

• fe<er people are /uying the product

• the industry used to /e hot% /ut no< another industry is more popular

• some ne< la< might hurt sales or profits

• a po<erful company enters the /usiness

• rumors

• no reason at all

Fluctuation in %hare ar!et in 5angladesh

7he share mar5et <as rising fast in the first t<o years of this go!ernment) But an unprecedented

decline occurred in the third year) +t continued in the fourth year) +n the final year% politicalinsta/ility influenced the mar5et) +n o!erall assessment of the financial sector% the highest

de!astation <as in the share mar5et) 7ransactions% mar5et capitalisation and fluctuations in

inde?es created records) Rumour% insta/ility% demonstration% siege% litigation% arrests and

encounters <ith the police happened time and again) 7he in!estors also called for hartals)

Statements from the go!ernment functionaries made the situation more !olatile) 7he Bangladesh

Securities and ?change Commission 9BSC: could not stop the ups and do<ns of the share



mar5et)Small in!estors lost their capital) But a section of /usinessmen made money% allegedly%

through fraudulent means) No action <as ta5en against them) 7he go!ernment <as allegedly

protecting those people)7he proposal for creating a fund of 75 '&& /illion for sta/ilising the

share mar5et did not materialise) 7here <as <idespread criticism a/out the share mar5et) 7he

opposition <as critical a/out this) 7hey called it digital fraud) conomists said the go!ernment

failed in this sector) According to them% <ea5 financial management <as responsi/le for the mess

in the share mar5et) +n '$$1 also% disaster struc5 the share mar5et during an A<ami eague

go!ernment)

7here <ere a num/er of reasons for the initial rise in the share mar5et% such as scarcity of shares%

aggressi!e in!estment /y /an5s and financial institutions% e?cessi!e loan dis/ursement /y /an5s

and /ro5erage houses% focus of the industrialists in the secondary mar5et and manipulation of

!ested 8uarters) +n!estment of /lac5 money enhanced the flo< of funds) As a result% share mar5et

/ecame a gam/ling spot) On January &$% #&''% the inde? fell /y more than 1&&) 7he inde? fell /y66')21 on January '$h) On January #&% the inde? fell /y 6.2)&() 7hat <as the collapse of the

share mar5et)

7he Be?imco group collected 75 '1)-' /illion and the Summit group 75 '().6 /illion from the

share mar5et) 7he Na!ana group could collect 75 6%61& million in the first t<o years) 7he

go!ernment appointed an en8uiry committee under the chairmanship of Mr +/rahim *haled) 0e

su/mitted a report in t<o months) Some /usiness people <ere named in the report) But no action

<as ta5en against them) 7he BSC <as reconstituted after su/mission of the en8uiry report)7he

Hrime Minister had to inter!ene in the mar5et to stop its further fall) She met the concerned

people connected <ith the mar5et) A lot of recommendations <ere made in the meeting)

7hereafter% many incenti!e pac5ages <ere announced) But the incenti!es did not ha!e tangi/le

impact on the mar5et) +ncenti!es <ere not implemented in full)

During the tenure of this go!ernment% 22 ne< companies <ere listed in the mar5et) 7his means%

'6 companies <ere listed e!ery year on the a!erage) +n #&'-% '1 companies <ere listed and these

companies collected 75 '')2( /illion from the mar5et) +n #&'#% '( companies <ere listed and

they realised o!er 75 '%&6( million) +n #&''% '( companies <ere listed and their collection stood

at 75 '.%2$& million) Si?teen companies collected 75 #1%6-& million in #&'&) Fifteen companies

<ere listed in #&&$)

7here <as a lot of confusion a/out in!estment /y go!ernment ser!ants) +nitially they <ere not

allo<ed to in!est in share mar5et) But finally they <ere allo<ed) 7he Bangladesh Ban5 and the

BSC stood face to face regarding the control of merchant /an5s) 7he matter <as settled

through discussion and the BSC got the control of merchant /an5s)Blac5 money <as not

in!ested in share mar5et in a /ig <ay) +n fi!e years% /lac5 money% <orth 75 '#%'(& million% <as

<hitened for in!estment in share mar5et) 7here <as a lot of criticism a/out <hitening /lac5

money for the purpose of in!estment in the share mar5et)

Different international organisations ha!e made e!aluations a/out the share mar5et) 7he orld



Ban5 has opposed in!estment of /lac5 money there) +t also has not supported use of /an5 funds

for share mar5et as this <ill enhance ris5 of /an5s) 7he +MF has opposed the creation of /an5

funds for in!estment in the share mar5et) 7he Asia Hacific Group on money laundering opposed

the use of /lac5 money in the share mar5et)7he Bangladesh Securities and ?change

Commission Act #&'# <as passed in parliament) 7he term of the Chairman and commissioners

<as e?tended from - to ( years) 7he BSC <as gi!en the authority to call for /an5 accounts) +t

also can spend funds according to its o<n decisions) 7he pro!ision of omni/us account has /een

a/olished) !ery in!estor must ha!e separate BO 9Beneficiary O<ners: account)7here is a lac5

of professionalism among the in!estors) 7he go!ernment has ta5en the initiati!e for

demutualisation) As a result% (& per cent of o<ner,directors <ill /e in the /oard of

management)7he BSC has announced a ten,year plan for de!elopment of the share mar5et)

*no<n as capital mar5et master plan% this <ill conclude in #&#&) 7he plan includes /udget

preparation% empo<erment of the BSC% long,term guideline for +HO 9+nitial Hu/lic Offering:%creation of a separate tri/unal% preparation of Financial Reporting Act to set up deri!ati!e

mar5et% e?pansion of /ond mar5et and so on)7he Hrime Minister has said that her go!ernment

has ta5en steps to restructure the share mar5et% including the ten,year master plan for the

de!elopment of the capital mar5et as <ell as for safeguarding the interest of the in!estors) But

stoc5s sa< sharp decline on No!em/er #( <ith declining turno!er) Sha5y confidence has

o!erpo<ered mar5et optimism) +n!estorsK mood is cautious as political insta/ility may hinder a

8uic5 reco!ery)

Control of Fluctuation

7he capital mar5et of Bangladesh is considered to /e one of the emerging mar5ets in theconte?t of the glo/al financial system) 7he mar5et has immense potentials for country;sindustriali3ation% de!elopment of infrastructure in particular and economic gro<th ingeneral) 7he e?tent of !olatility in the capital mar5et is more pronounced in Bangladeshthan else<here in the <orld) 7he go!ernment and the Securities and ?changeCommission 9SC: ha!e underta5en a good num/er of initiati!es to meet BangladeshKsde!elopment financing re8uirements <ith a particular focus on de!eloping long terminfrastructure financing and strengthening financial sta/ility through promotion of capitalmar5et) +n this regard formulation of a Master Hlan is of crucial importance) BesidesHlanning% it is also of utmost significance to esta/lish appropriate arrangements to ensurethe successful implementation of the Master Hlan for the de!elopment of Bangladeshcapital mar5et) A large num/er of reforms are necessary to put the capital mar5et on atrail of sustaina/le gro<th) 7he implementation arrangements ha!e to /e ro/ust so thattimely and consistent implementations of policy actions can ta5e place) +t is also re8uiredto guard against policy re!ersal% <here the implementation arrangements <ill come in



action once more) 7he arrangements must /e fle?i/le so that any unforeseen e!ents can /e properly addressed) +n order to engage highly s5illed 5no<ledgea/le human resources%ade8uate resources must /e allocated) A monitoring and e!aluation frame<or5% <ith a

feed/ac5 loop% must /e at <or5 to ma5e the process accounta/le)

7his <ill allo< the changes to /e made to the plan <hen the situation demands) 7rans, partisan commitment from the highest le!el of the go!ernment and all sta5eholders isalso necessary in this regard) 7his is a prere8uisite for the successful implementation of the Master plan) Ade8uate technical assistance is re8uired from time to time to supportimplementation and ensure consistency <ith international standards of /est practices)

7he master plan aims to achie!e transparency% accounta/ility and efficiency in the mar5etand strengthen the Securities and ?change Commission as a regulatory /ody) +n this /ac5drop and ha!ing recogni3ed the need for !i/rant capital mar5ets to meet the national

gro<th targets% the Securities and ?change Commission here/y adopts this Master Hlanfor Bangladesh capital mar5et de!elopment

7his plan <ill ha!e the follo<ing Fi!e Strategic O/4ecti!es@' 7o reha/ilitate the SC in terms of@

a Securing crucial 9operational and financial: independence for the SC / Strengthening its organi3ational structurec nhancing 9the 8uality% 8uantity and s5ills of: its staff andd Strengthening its 9information and internal control: systems

7o strengthen the rules and regulations pertaining to the capital mar5ets7o upgrade financial mar5et infrastructure

7o create a fertile en!ironment to ena/le the orderly and sustaina/le emergence of ne< products 9e)g) corporate /onds% asset= /ac5ed securities and deri!ati!es:

7o ensure a fertile en!ironment to ena/le the orderly and sustaina/le e?pansion of institutional in!estors; 9e)g) mutual funds% insurance companies% pension funds: participationin the capital mar5ets

"ecommendations for %ecurities and 1change Commission (%C)

SC as the guardian of capital mar5et should play significant role to ma5e it march for<ard) +t must

ensure the follo<ings@

SC must ensure that neither of its mem/ers nor any of its officials is in!ol!ed either directly

or indirectly <ith the transactions in the stoc5 mar5et) 7he monitoring and sur!eillance should /e strengthen so that none can get chance to gam/le) SC must ha!e its o<n certified Chartered Accountants to ensure the accuracy of the Financial

Statements of the listed companies and they should gi!e punishment if the /oo5s of accounts are

not accurately audited)



SC must rethin5 a/out the rule of disclosure of 8uarterly financial reports /y the companies

/ecause many of the companies misused it as a !ehicle of misguiding the in!estors) +n fact% it

/ecame a common practice of most of the listed companies to sho< high 8uarterly HS in its un,

audited 8uarterly report to /ring do<n H> ratio) +n some cases% it is seen that a fe< companies;

annual audited HS for the year ended #&'& <as lo<er than its accumulated HS of three

8uarters)

+t must ensure speedy disposal of decision for mar5et operation and all the decisions should /e

ta5en considering the long term effect on the mar5et)

7o /ring fundamentally strong pri!ate companies in the capital mar5et% there is no alternati!e of

Boo5 Building Method of +HO) So% the postponed Boo5 Building Method must /e reintroduced <ith

necessary correction to resist all sorts of manipulation)

+t is high time for SC to ta5e a decision regarding the stoc5s in the O7C mar5et /ecause hugeamount of money has /een /loc5ed due to inefficient O7C mar5et) 7he companies in the O7C

mar5et should either /e de,listed and their assets and lia/ilities should /e settled or these

companies may /e /rought in the main mar5et through ac8uisition /y the Go!ernment or /y the

interested entrepreneurs restarting production of those enterprises)

Conclusion

From our analysis <e ha!e found that ma4or indicators of the country;s ma4or stoc5

e?change is /ecoming more !olatile o!er time and the regulators are not efficient enough to

guard this !olatility) But% for a de!eloping country li5e Bangladesh% the importance of soundde!elopment of the mar5et cannot /e undermined) Although the SC has /een trying to

maintain a continuous flo< in the mar5et% !ery often its role meets the /road economic

o/4ecti!es) +n order to ma5e the mar5et less !olatile% SC itself should /e strengthen /oth in

terms of num/er of manpo<er and 8uality of the professionals in!ol!ed <ith special focus

on independent research% monitoring mechanism and prompt decision ma5ing)

Security and ?change Commission 9SC: of Bangladesh and go!ernment should ta5e the

short term and long term initiati!es to sta/ili3e the mar5et) 7hey should encourage more

pu/lic limited companies to offer more share to meet the current demands) +ncome ta?

re/ate% +n4ection of Mar5et Sta/ili3ation Fund% Mandatory holding certain percentage of

share among the /oard of directors% short term incenti!es pac5ages should /e introduced toget /ac5 the confidence among the e?isting in!estors) Regulatory /odies of Bangladesh

stoc5 mar5et must educate the current and potential in!estors a/out the mar5et mechanism

and pro!ide them the accurate information so that in!estors trade their shares carefully)

nless% there are any correcti!e measures% Bangladeshi stoc5 mar5et <ill /e facing this

irrational do<n<ard of DGN +nde? again in the near future



"eferences

• AiD3% 9#&'':% hat can <e learn from Bangladesh;s stoc5 mar5et crashTE) A!aila/le from@

http@>><<<)pnoytrader)com>#&''>&'>learn,from,/angladeshs,stoc5,mar5et,crash>UAccessed on

'()&()#&'#V

• 0ossain% Md) 7oufi8ue 9n)d:% Bangladesh stoc5 mar5et crisis@ diagnosis% remedies% and

prospectsE) A!aila/le from@ http@>><<<)scri/d)com>doc>.1662.$$>Bangladesh,Stoc5,Mar5et,

Crisis UAccessed on &6)&6)#&'#V

• +/rahim *halid Committee sharer pro/e Report 9<<<)mof)go!)/d>en>inde?)phpT

optionWcomXcontent!ie<WarticleidW'1$+temidW':

• Ahmed% 0) )% Samad% P) A) 9#&&.:) Herformance e!el of Dha5a Stoc5 Mar5et@ A

Puantitati!e Analysis) Daffodil International University Journal of Business and Economics, Lol)

- No) '% January #&&.)• Ahmed% M) N) +mam% O) M) 9#&&2:) Macroeconomic Factors and Bangladesh Stoc5 Mar5et@

+mpact analysis through Co integration Approach)

• International Review of Business Research a!er, pp)#',-6% Lol)-% No)6)

• ddin% M) B) 9#&&$:) Determinants of mar5et price of stoc5@ A stoc5 on /an5 leasing and

insurance companies of Bangladesh) Journal of modern "ccounting and "uditing, Jul) #&&$%

Lol)6% No)2 9Serial No) 6&:)

• Ne<spapers of Bangladesh

• @ebsites

• Central Depository Bangladesh imited% <<<)cd/l)com

• Dha5a Stoc5 ?changes% <<<)dse/d)org

• Security and e?change commission% <<<)sec/d)org)#1)'1

bangladesh security & exchange comission

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