PROFILE OF DHAKA STOCK EXCHANGE LIMITED

BBE Dissertation

KHANDAKAR NIAZ MORSHED

A dissertation submitted in partial fulfillment of the requirements for the degree of

BACHELOR OF BUSINESS ENGLISH

Of

IBAIS UNIVERSITY

Dhaka, Bangladesh

December, 2010

CERTIFICATE

This is to certify that the internship on “Profile of Dhaka Stock Exchange (DSE) Limited” has

been submitted for the award of the degree of Bachelor of Arts in Business English from IBAIS

University Bangladesh, carried out by Khandakar Niaz Morshed of 1st batch bearing ID:

3002060115 under my supervision. To the best of my Knowledge and as per his declaration, any

part of this report has not been submitted for any degree before.

He has been permitted to submit the Internship report

……………………….

Prof. Dr. Abhinaya Chandra Saha

Faculty of Business Administration

IBAIS University

Bangladesh

DECLARATION

I am the student of Bachelor of Arts in Business English batch 1st bearing ID: 3002060115 from

IBAIS University Bangladesh would like to declare here the declaration on An Internship report

on “Profile of Dhaka Stock Exchange (DSE) Limited” in Bangladesh which I have not submitted

for any other degree before

…………………………

Khandakar Niaz Morshed

B.A (Hon’s) in Business English

ID: 3002060115 (1st Batch)

IBAIS University

LETTER OF SUBMISSION

Date –

To

Prof. Dr. Abhinaya Chandra Saha

Faculty of Business Administration

IBAIS University

Bangladesh

Sub: Submission of Internship Report

Dear Sir,

It is my great pleasure to submit you my internship report on the project title of “Profile of

Dhaka Stock Exchange Limited”. I tried my best to complete this report properly for your kind

consideration and like to show my job experience as I am recently appointed as a Trader

Officer in Haji Ahmed Brothers Securities Ltd .(DSE membership no 41)

I have confident that the internship program has increased both of my practical job experience

and theoretical knowledge to a great extent. I will be obliged to answer any query that may arise

during the evaluation of this report. So, I fervent requesting and hope that you would be kind

enough to accept my report and oblige thereby.

Please call me if you require further clarification.

Sincerely Yours

…………………………

Khandakar Niaz Morshed

B.A (Hon’s) in Business English

ID: 3002060115 (1st Batch)

IBAIS University

ACKNOWLEDGEMENT

In the process of preparing this report I received genuine cooperation from number of individuals

whose names are not possible to mention in this report but I would remember them with my

heartfelt appreciation and gratitude.

First of all, I am very much grateful to Allah whose gave blessings me to courage and ability to

prepare this report. I am very much grateful to all of my colleagues of Haji Ahmed Brothers

Securities Ltd for their kind help and references. Furthermore, I would like to mention the name

of Prof. Dr. Avinaya Chandra Saha, Faculty of Business, IBAIS University, Bangladesh, for

guiding me to complete properly my internship program. I am also highly indebted to him for his

scholarly and constructive suggestion which was of much assistance to prepare this report of

“Profile of Dhaka Stock Exchange Ltd and its Future prospects’.

…………………………

Khandakar Niaz Morshed

B.A (Hon’s) in Business English

ID: 3002060115 (1st Batch)

IBAIS University

PROLOGUE

Thesis and research program is a scope for acquiring knowledge after successful completion of

academic curriculum. Theoretical knowledge gets a complete shape only when it is applied in a

practical field.

Every Organization is concerned about the competence of its executive to cope with the

technological advances in industrial and commercial development in the fast-moving global

environment. The capability of the executive must be enhanced so as to make them efficient and

effective in the execution of their duties and responsibilities. The principal emphasis on B.A in

Business English program has been given on the operation of business organization mostly in

private sector. The objective of this program is to prepare students in such a manner so as to

equip them with professional English which is frequently used in job field and knowing the

knowledge of this, they can few steps ahead from other discipline and showing their skills on

different sectors among this stock market is one of best field to work. Moreover, competence in

to depth knowledge of business Administration so as to enable them to meet any challenging

situation and to work with the competence in the competitive business environment.

I have accomplished my thesis and research program on activities of DSE in the stock market

during my 03 (Three) months research program. I’ve tried my best to get knowledge about the

overall operations of stock market.

This program is, in fact, is at endeavor to make the students familiar with the real business

situation and to prepare themselves to match their theoretical knowledge with practical field.

EXECUTIVE SUMMARY

As an integral part of BBE (Bachelor of Business English) program I was ask to submit a thesis

paper on Dhaka Stock Exchange to have practical exposure on investment activities. In the

meantime I was offered a job of Trader officer (Authorized Representative) in Haji Ahmed

Brothers Securities Ltd (Membership no -41), so it’s also giving me more opportunity to

know the DSE more deeply. First of all, there are two stock exchanges in Bangladesh- Dhaka

Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) that are operating under the

regulatory authority of Security Exchange Commission (SEC).

Financial markets are absolutely vital for the proper functioning of capitalistic economy, since

they serve to channel fund from saver to borrower. They play an important role by channeling

the fund to those who can make the proper and productive uses of the same. The financial

markets permit both business and government to raise the needed funds by selling securities.

Simultaneously, the surplus units of the economy are able to invest and earn and return.

Financial markets include primary markets where new securities are sold and secondary markets

where existing securities are traded. Primary markets involve investment bankers who specialize

in selling new securities. A secondary market consists of equity markets, bond markets and

derivative markets. Investor in Bangladesh becomes increasingly interested in equity markets

because many entrepreneurs look for requirements from the equity markets for many reasons. In

this connection Dhaka Stock Exchange (DSE) play an integral role in the pace of the

industrialization of the country.

Table of Contents

Chapter Topics Name Page No

Chapter 1 Introduction1-4

1.1 Introduction 21.2 Background of the study 21.3 Objective of the study 21.4 Scope of the Study (things that are included) 31.5 Methodology (model used, data source etc) 31.6 Limitation (data collection, sensitive information, time

frame, information disclose etc.)4

Chapter 2 Literature Survey 5-11

2.1 What is Stock Exchange? 62.2 History of Stock Exchange 72.3 Function of Stock Exchange 72.4 Stock Exchange in Bangladesh 9 2.4.1 History of Dhaka Stock Exchange in Bangladesh 9 2.4.2 Listed Companies in DSE 11 Chapter 3

About Dhaka Stock Exchange16-32

3.1 Board of Directors 173.2 DSE Management 193.3 Function of Dhaka Stock Exchange 203.4 Legal Status 203.5 DSE Indices

Algorithm of DSE Indices

General Indices

DSE-20 Indices

21

3.6 What is DSE trading? 22

3.6.1 DSE Trading Day 22 3.6.2 DSE Trading Period 22 3.6.3 DSE Trading Sessions 22 3.6.4 Qualifications for Trading 223.7 Types of Transactions 233.8 Order Withdrawals 243.9 The Clearing and Settlement 253.10 Settlements for Different Categories Instruments 293.11 Settlements 31 3.11.1 General 32

Chapter 4 DSE Automated Trading System 33 -464.1 Preamble 344.2 Hardware 344.3 Network (LAN / WAN) 35 4.3.1 System Software 36 4.3.2 Application Software

A. TESA

B. TESA Architecture

C. Solution Benefits

D. TESA Functional Model

E. Principle Function of TESA

F. Market

G. Market Control

H. Market Information

I. Broker Support

37

4.4 Surveillance Price Monitoring

Position Monitoring

40

Chapter 5 Rules and Regulations of DSE 47-63

5.1 Corporate Governance Guidelines 485.2 Market at a Glance 545.3 Investor Guide

A. Procedure for Making Portfolio Investment

by Foreign Investors

B. Opportunity for Foreign Investors

C. Facilities for Non-Residency Bangladeshis

D. Facilities and Incentives

55

5.4 Monthly Review of DSE September 2010 58 Chapter 6 Trend of market performance and Growth 64-68

6.1 Trend of Market Performance 656.2 Indicators of Stock Market Growth 666.3 Problems of DSE 686.4 Conclusion 68

Appendix 69-73 Bibliography 74-76