Acknowledgement
A report, book, project paper or
thesis paper requires a lot of information from various corners. This paper
represents the Operating and Managerial Structure of Dhaka Stock Exchange
Existing problem and possible solution, a stock performing in Bangladesh. I
express a deep debt of gratitude to my department teacher Abdul
Basek Mondol lecturer and Supervisor of my group, BBA 4th year,
Finance and Banking , Govt. Titumir
college, Dhaka under National University, Gazipur, Bangladesh, who has given me
the opportunity and directions to prepare such a useful paper.
By preparing this on the basis of the practical data I
realized the fundamental difficulties which would not have appeared if we just
went through the books. I express my indebtedness to my Department because at
the time of collecting information I was highly praised and easily provided
with the relevant things having been the student of this Department.
At the same time to prepare this paper I have got the
hands of help from
Md. Golam Saroar (Investor of Dhaka stock exchange) ,
Abu Rayhan Manik, , Sabuz, , Abdur Razzaque and many other friend. My thanks
also go to them. I would like to operating officers of Dhaka Stock Exchange web
site who given me important information about Dhaka Stock Exchange.
Lastly and most importantly, praise is to Allah, the
creator and sustainer who has given me the strength to complete this paper
successfully in time.
----------------------------
Md. Saddam Hossain
Executive Summary
The thesis
topic “Operating and
Managerial Structure of Dhaka Stock Exchange Existing Problem and Possible
Solution”. The whole is segregated into
three parts, in part one: Operating structure, how they operate their
activities. Part two: Managerial structure, here discuses about managerial body
of Dhaka Stock Exchange. Part three is the existing problem and its possible
solution. I try my best to analyzed problem and solution.
In this
project paper the main concern is to presentation about DSE. After collecting
data and analysis from various magazine, I found some problem and try to get
solution. As a result I adjust here total activities of Dhaka stock exchange.
In case
after analysis I have found some problem. At present Dhaka stock exchange now
facing critical situation. Now market fall is the common problem of DSE that
facing now.
METHODOLOGY OF STUDY
To bring out the study equally primary and secondary
data were used.
PRIMARY
SOURCES
v
To gather
data, I chiefly used a meeting with director and investor of Dhaka Stock Exchange.( By phone and Email)
v
Direct conversation with investor.
v
Observing their activities. (Bogra Brokers
house)
SECONDARY SOURCES
v
As
the minor basis here are mostly used the web site of Dhaka Stock Exchange.
v
Various records of stock exchange.
v
Different articles published in the journals
& magazines have been used.
v
Many other blogs where write about stock
exchange.
Our text book also use here as a secondary
data.
OBJECTIVE OF THE STUDY
The objective of
study is to gather practical knowledge regarding over all stock Exchange and
its operations. Theoretical classes of BBA provide us theories regarding
different subjects where as practical investigate gives us the chances to view
those systems and their operations. The principal intent of this report is to
analyze the operating and managerial structure, excising problem and solution.
More precisely we can identify the objective of this report as follows:
Ø
To fulfill our course requirement of the
course curriculum.
Ø To
achieve realistic facts
Ø To
study the services of Dhaka Stock Exchange.
Ø The
preparation of the report will enable to greater concepts of the stock market.
Ø To increase our creativity and gathering
experience to work in practical field.
Ø To
suggest recommend some necessary steps to solve the existing problems.
LIMITATION OF THE STUDY
A proverb goes
that to achieve some valuable thing have to pass a long way. While preparing
the report, we had to face some obstacles that might have reduced the quality
of the report. Mainly the following limitations I faced:
·
The information I get was not adequate.
·
The officials interviewed cannot provide
me specific information or they do not want to give.
·
The time I'm provide, was not adequate.
·
As I involved in study, it was very
difficult to manage time & specially co-ordination.
·
Time
constraint is the limitation restricting this report form.
·
I have
not much knowledge about stock Exchange that’s why I have to face many
problems.
BACKGROUND OF THE STUDY
At the current
situation of business and association is playing an essential role to develop
the financial situation of a country. So in the sector of trade and connotation
it is badly fundamental to continue some management. In the association it is
used to continue all sorts of works resembling, monetary, maintain inventory
effective arrangement, numerical uses and record management system etc. All of
which create working simple, speedy and exact so as stock business “Dhaka Stock Exchange” also exercises structural manage system to boost their
trade and widen their situation. I visited to “Dhaka Stock Exchange” and organized its report. The visitation was took place
in the head office of Dhaka Stock Exchange in Motijheel and I am very glad for getting the opportunity to
accomplish my practical investigate on Dhaka Stock Exchange. The report will definitely increase the knowledge of other students to
know about the largest stock exchange of Bangladesh.
INISTITION PROFILE
HISTORY
First incorporated as East Pakistan Stock Exchange Association Ltd in 28
April 1954 and started formal trading in 1956. It was renamed as East Pakistan Stock Exchange
Ltd in 23 June 1962. Again renamed as Dacca Stock Exchange
Ltd in 13 May 1964. After the liberation war in 1971 the trading was
discontinued for five years. In 1976 trading restarted in Bangladesh, on 16
September 1986 DSE was started. The formula for calculating DSE all share price
index was changed according to IFC on 1 November 1993.
INSTITUTE NAME
The
Institution name is “DHAKA STOCK EXCHANGE LTD. (DSE)”
LOCATION
DSE Head Office: Dhaka
Stock Exchange Ltd, Stock Exchange Building, 9/F Motijheel C/A, Dhaka-1000
Phone: +88-02-9564601, 7175703-11 Fax: +88-02-9564727, +88-02-9569755
DSE Chittagong Office: Shafi Bhaban, 6, Sheikh Mujib Road, Agrabad
Commercial Area, Chittagong-4100 Phone: +88-031-2514100 Fax: +88-031-2514100
DSE Sylhet Office: RN Tower Chowhatta Sylhet Phone: +88-0821-727880
Fax: +88-0821-727880
DSE Khulna Office: City Trade
Center (2nd Floor) 75, K.D.A Avenue, Khulna - 9100 Phone: +88-041-811600 Fax:+88-041-811600
DSE Rajshahi Office: Rajshahi Chamber of Commerce & Industry Chamber
Bhaban (1st Floor) Station Road Rajshahi -6100
FORMATION
Dhaka Stock Exchange (DSE) is a public limited company. It is formed and
managed under Company Act 1994, Security
and Exchange Commission Act 1993, Security
and Exchange Commission Regulation 1994, and Security
Exchange (Inside Trading) regulation 1994. The issued
capital of this company is Tk. 500,000 which is divided up to 250 shares each pricing
Tk. 2000. No individual or firm can buy more than one share. According to stock
market rule only members can participate in the floor and can buy shares for
himself or his clients. At present it has 238 members. Market capitalization of
the Dhaka Stock Exchange reached nearly $9 billion in September 2007 and $27.4
billion on Dec 9, 2009.
LOGO
MISSION
The
mission of Dhaka Stock Exchange is to provide economic improvement.
VISION
The
vision of Dhaka Stock Exchange is that they want to go top positions in the
world by providing high services.
OBJECTIVE
Hand
works and effort
MAJOR FUNCTION
OF DSE
Dhaka stock exchange provide their activates on
functional way. The major function is given below:
·
Listing of Companies (As per Listing
Regulations).
·
Providing the screen based automated
trading of listed Securities.
·
Settlement of trading (As per Settlement
of Transaction Regulations).
·
Gifting of share / granting approval to the
transaction/transfer of share outside
the trading system of the exchange (As per Listing Regulations 42).
·
Market Administration & Control.
·
Market Surveillance.
·
Publication of Monthly Review.
·
Monitoring the activities of listed
companies (As per Listing Regulations).
·
Investor's grievance Cell (Disposal of
complaint by laws 1997).
·
Investors Protection Fund (As per investor
protection fund Regulations 1999).
·
Announcement of Price sensitive or other
information about listed companies through online.
TRADING SYSTEM
Automated trading system
Dhaka Stock Exchange operated their activities on automated
trading system. The automated trading was initiated in 10 August 1998
and started on 1 January 2001.
Globally the developments in
information & communication technologies (ICT) have created a new instance
in the securities market operations. Stock Exchanges all over the world have
realized the potentiality of ICT and inclined to the electronic trading
systems. It was understood by DSE that technology would ensure transparency,
timeliness and satisfaction in customer service. Considering those DSE
introduced Automated Trading System on 10th August 1998.In other words, the
trading floor moved right into the member's office premises where an investor
started to place buy/sell orders. Considering market growth the Automated
Trading System was upgraded two times. The recently Upgraded Trading System was
started from 21st December, 2008.
DSE Automated Trading System (HP
Nonstop S7806) is running on fault tolerant, high available, scalable and
maintainable Mainframe Server. Previously DSE established the TANDEM Nonstop
K204 System on September 1998 and on August 2005 it was replaced with highly
scale able HP Nonstop S7802. DSE upgraded the Trading System again on 21st
December, 2008. The existing HP Nonstop S7806 Server is highly fault tolerant
to the fact that no single component failure will halt the system. Its constituent
parts are hot swappable and upward compatible; components can be added or
removed while the system is running and any compatible new upgraded will work
with the system. All disk drives are mirrored so, if any of the disk crashes
the exact copy of the data is available at online. Moreover the connecting path
for every disk whether it is primary or mirror is also redundant. In every
case, minimum two peripheral devices exist. All the components are working
active - active load balancing procedure. To ensure better power quality we
have ensured high end UPS's with long durable backup capability, two instant
backup generations and other electrical devices.
NETWORK (LAN / WAN)
The entire
Member (238 members) Server Applications (MSA) are connected with Nonstop HP
S-Series Server through either DSE LAN or WAN connectivity. Each member has one
or more Trader Work Station (TWS). The TWSs are being connected to the Trading
Server via respective MSA through LAN and WAN connection. DSE outsourced Metro
Net Ltd., DNS Ltd. X-Net Ltd., Dhaka Com
Ltd., Ranks ITT, Link-3, Royal Green Online Ltd. etc Network Service Providers
(NSP under WAN Expansion Project). Now a day's member can establish a main
office or branch offices to their remote location and can trade smoothly by
using different media ADSL, Optical fiber and Radio Link from Dhaka and other
important cities such as Gazipur, Narayanganj, Comilla, Hobiganj, Chittagong,
Sylhet, Khulna, Barisal, Rajshahi and Bogra at the same time. Three DSE branch
offices located at Chittagong, Sylhet and Khulna are connected via BTTB's DDN
link. We also used connectivity for redundancy for the DDN link. We have a plan
to reach the DSE branches in same way.
DSE LAN/WAN
DSE LAN/WAN
Expansion Expansion
within Dhaka City:
Outside
of Dhaka City:
In case of trade interruption due
to serious hardware, software, network failure or telecommunication disruption
at the Brokerage houses, there is a provision to allow traders to trade at DSE
Contingency Trading floor.
SYSTEM
SOFTWARE
The system software is HP
Proprietary Nonstop KERNEL and includes the database as part of the operating
system thereby eliminating the layer typically found in most Database
Management Systems (DBMS). The Database functionalities are handled by NONSTOP
SQL, which is simply a different operational session for the operating system.
The proprietary nature of the system software arguably enhances system
security. Operating system is HP's proprietary Nonstop Kernel DBMS handled by Nonstop
SQL. The system software treats all its hardware resources as objects and is
thus entirely message driven. This then allows application software to be
deployed using client / server architecture providing shared data processing between
the central server and the user workstation. The central trading system resides
in the Stock Exchange premises, which is running 24 hrs in a day & 365 days
in a year.
APPLICATION
SOFTWARE
The application, which runs in DSE
for trading, is called TESA (The Electronic Securities Architecture). TESA has
two parts: MSA (Member's Server Application) & TWS (Trader workstation).
MSA is the "Gateway" between the traders and the Stock Exchange,
which manages all the transactions and database operations between the traders
and the Trading Engine. TWS is the Front-end Application closer to investors,
where they can submit Buy/Sell orders for their desired securities TESA (The
Electronics Securities Architecture) is the Trading software (Based on HP
proprietary O/S & DBMS) It has developed in view of Distributed Database
system In the client site it is being using SQL as local Database Trading
Software is MSA & TWS In STSD (Signal trader Single Database) system both
MSA & TWS are running on a Windows 2k Professional /XP Professional
workstation and for MTSD (Multiple trader Single Database) MSA install in a
Windows
MANAGEMENT
The
management and operation of Dhaka Stock Exchange is entrusted on a 25 members
Board of Director. Among them 12 are elected from DSE members, another 12 are
selected from different trade bodies and relevant organizations. The CEO is the
25th ex-officio member of the board. The following organizations are currently
holding positions in DSE Board:
·
ICB
·
President of Institute of Chartered
Accountants of Bangladesh
·
President of Federation of Bangladesh
Chambers of Commerce and Industries
·
President of Metropolitan Chambers of Commerce and
Industries
·
Professor of Finance
Department of Dhaka University
·
President of DCCI
(Dhaka Chamber of Commerce and
DSE Management
|
|
Professor Dr. Swapan Kumar Bala, FCMA
Managing Director Phone: 9564601,9576210-18, Ext-108 Email : skbala@dsebd.org |
|
A.K.M. Ziaul Hasan Khan, FCA
Chief Regulatory Officer Phone: 9564601,9576210-18, Ext-291 Email : zia@dsebd.org |
|
Abdul Matin Patwary, FCMA
Chief Financial Officer Phone: 9564601, 9576210-18, Ext-330 Email : matin@dsebd.org |
|
Shaikh Mohammadullah, MBA (IBA), FCS
General Manager & Company Secretary Phone: 9564601,9576210-18, Ext-102 Email : smullah@dsebd.org, dse@bol-online.com |
|
Jiban Chandra Das, FCA
General Manager (Finance & Accounts)Phone: 9564601,9576210-18, Ext-152 Email : jiban@dsebd.org |
|
Md. Samiul Islam
General Manager (Market Development)Phone: 9564601,9576210-18, Ext-235 Email : sislam@dsebd.org |
|
Divisions and
Departments of DSE
Under the
Office of the Managing Director
Contact:88-02-9564601,9576210-18
Contact :
88-02-9564601, 9576210-18
Contact:88-02-9564601,9576210-18
Monitoring & Compliance Department
Monitoring & Compliance Department
Regional
Office
Contact:88-031-2514100
Email : ctg@dsebd.org
Email : ctg@dsebd.org
Contact:88-0821-727880
Email : sylhet@dsebd.org
Email : sylhet@dsebd.org
SURVEILLANCE OF
DSE
The main objective of the Surveillance function of the
Exchange is to promote market integrity in two ways -
·
By monitoring price and volume movements (volatility) as
well as by detecting potential market abuses at a nascent stage, with a view to
minimizing the ability of the market participants to influence the price of the
scrip/scrip's in the absence of any meaningful information.
·
By managing default risk by taking necessary actions
timely.
Market Abuse is a broad term
which includes abnormal price/volume movement, artificial transactions, false
or misleading impressions, insider trading, etc. In order to detect aberrant
behavior/ movement, it is necessary to know the normal market behavior -
The department carries out
investigation, if necessary, based on the preliminary examination/analysis and
suitable actions are taken against members involved based on the investigation.
All the instruments traded in the market come under the Surveillance umbrella
of DSE. Surveillance activities at the Exchange are divided broadly into two
major segments -
·
Price Monitoring
·
Position Monitoring
Price
Monitoring
The functioning of the Price
Monitoring is broadly divided into following activities -
On line
Surveillance
One of
the most important tools of the Surveillance is the On-line Real Time
Surveillance system with main objectives of detecting potential market abuses
at a nascent stage to reduce the ability of the market participants to unduly
influence the price and volumes of the scrip's traded at the Exchange, improve
the risk management system and strengthen the self regulatory mechanism at the
Exchange. The system provides facility to access trades and orders of members.
Off-Line Surveillance
The
Off-Line Surveillance system comprises of the various reports based on
different parameters and scrutiny thereof -
·
High/ Low Difference in prices
·
% change in prices over a week/ fortnight/ month
·
Top N scrip's by Turnover over a week/ fortnight/ month
·
Top N scrip's by Volume over a week/ fortnight/ month
·
Trading in infrequently traded scrip's
·
Scrip's hitting New High / Low etc.
The
Surveillance actions or investigations are initiated in the scrip's identified
from the above-stated reports.
Investigations
Conducting
in-depth investigations based on preliminary enquiries/analysis made into
trading of the scrip. In case of irregularities observed, necessary actions are
initiated or investigation case forwarded to SEC, if necessary through the CEO
Position Monitoring
The
Surveillance Department closely monitors outstanding exposure of members on a
daily basis. For this purpose, it observes various off-line and on-line market
monitoring reports. The reports are scrutinized to ascertain whether there is
excessive purchase or sale position build up compared to the normal business of
the member, whether there are concentrated purchases or sales, whether the
purchases have been made by inactive or financially weak members and even the
quality of scrip's is considered to assess the quality of exposure. The
following key areas are examined to assess the market risk involved -Online monitoring of Brokers Position
Surveillance closely monitors Brokers gross turnover exposure for ensuring margin calls in time.
Surveillance closely monitors Brokers gross turnover exposure for ensuring margin calls in time.
LISTED COMPANY
Short list
AAMRATECH (aamra
technologies limited )
|
BANGAS(Bangas )
|
CMCKAMAL (CMC Kamal )
|
|
ABB1STMF (AB Bank 1st
Mutual fund )
|
BANKASIA (Bank Asia Ltd.
)
|
CONFIDCEM (Confidence
Cement )
|
|
ABBANK (AB Bank Limited )
|
BATASHOE (Bata Shoe )
|
CONTININS (Continental Insurance Ltd.
)
|
|
ACI (ACI Limited. )
|
BATBC (BATBC )
|
CVOPRL (CVO Petrochemical Refinery
Limited )
|
|
ACIFORMULA (ACI
Formulations Limited )
|
BAYLEASING (Bay Leasing
& Investment Limited )
|
DACCADYE (The Dacca
Dyeing & Manufacturing Co.Ltd. )
|
|
ACIZCBOND (ACI 20%
Convertible Zero Coupon Bonds )
|
BDAUTOCA (BD.Autocars )
|
DAFODILCOM (Daffodil Computers Ltd. )
|
|
ACTIVEFINE (Active Fine
Chemicals Limited )
|
BDCOM (BDCOM Online Ltd.
)
|
DBH (Delta Brac Housing Finance Corp.
Ltd. )
|
|
AFTABAUTO (Aftab
Automobiles )
|
BDFINANCE (Bangladesh
Finance and Investment Co.Ltd )
|
DBH1STMF (DBH First
Mutual Fund )
|
|
AGNISYSL (Agni Systems
Ltd. )
|
BDLAMPS (Bangladesh Lamps
)
|
DEBARACEM (Aramit Cement
Ltd.(Deb-14%) )
|
|
AGRANINS (Agrani
Insurance Co. Ltd. )
|
BDSERVICE (Bangladesh
Services Ltd. )
|
DEBBDLUGG (Bangladesh
Luggage Ind. Ltd.(Deb-14%) )
|
|
AIBL1STIMF (AIBL 1st
Islamic Mutual Fund )
|
BDTHAI (Bd.Thai Aluminium
)
|
DEBBDWELD (BD Welding
Electrodes Ltd.(Deb-15%) )
|
|
AIMS1STMF (Aims 1st M.F.
)
|
BDWELDING (Bd. Welding
Electrodes )
|
DEBBDZIPP (Bangladesh Zipper Ind.
Ltd.(Deb-14%) )
|
|
AL-HAJTEX (Al-Haj Textile
)
|
BEACHHATCH (Beach
Hatchery Ltd. )
|
DEBBXDENIM (Beximco Denims
Ltd.(Deb-14%) )
|
|
ALARABANK (Al-Arafah
Islami Bank )
|
BEACONPHAR (Beacon Pharmaceuticals
Limited )
|
DEBBXFISH (Beximco Fisheries Ltd.(Deb-14%)
)
|
|
ALLTEX (Alltex Industries
Ltd. )
|
BEDL (Barakatullah Electro Dynamics
Ltd. )
|
DEBBXKNI (Beximco Knitting Ltd.(Deb-14%)
)
|
|
AMBEEPHA (Ambee Pharma )
|
BERGERPBL (Berger Paints Bangladesh
Ltd. )
|
DEBBXTEX (Beximco Textiles Ltd.(Deb-14%)
)
|
|
AMCL(PRAN) (AMCL (Pran) )
|
BEXIMCO (BEXIMCO )
|
DELTALIFE (Delta Life Insurance )
|
|
ANLIMAYARN (Anlimayarn Deying
Ltd. )
|
BGIC (BGIC )
|
DELTASPINN (Delta Spinners Ltd. )
|
|
ANWARGALV (Anwar
Galvanizing )
|
BIFC (Bangladesh Industrial Fin. Co.
Ltd. )
|
DESCO (Dhaka Electric Supply Company
Ltd. )
|
|
APEXADELFT (Apex Adelchi
Footwear Ltd. )
|
BRACBANK (BRAC Bank Ltd. )
|
DESHBANDHU (Deshbandhu
Polymer Limited )
|
|
APEXFOODS (Apex Foods )
|
BRACSCBOND (Sub 25%
Convertible Bonds of BRAC Bank L )
|
DHAKABANK (Dhaka Bank )
|
|
APEXSPINN (Apex Spinning
& Knitting Mills Limited )
|
BSC (BSC )
|
DHAKAINS (Dhaka Insurance Limited )
|
|
APEXTANRY (Apex Tannery )
|
BSCCL (Bangladesh Submarine Cable
Company Limited )
|
DSHGARME (Desh Garmants )
|
|
ARAMIT (Aramit )
|
BSRMSTEEL (BSRM Steels Limited )
|
DULAMIACOT (Dulamia Cotton )
|
|
ARAMITCEM (Aramit Cement
)
|
BXPHARMA (Beximco Pharma )
|
DUTCHBANGL (Dutch-Bangla Bank )
|
|
ASIAINS (Asia Insurance
Limited )
|
BXSYNTH (Beximco Synthetics )
|
EASTERNINS (Eastern
Insurance )
|
|
ASIAPACINS (Asia Pacific
General Insurance Co. Ltd. )
|
CENTRALINS (Central
Insurance )
|
EASTLAND (Eastland Insurance )
|
|
ATLASBANG (Atlas Bangladesh
)
|
CITYBANK (City Bank )
|
EASTRNLUB (Eastern Lubricants )
|
|
AZIZPIPES (Aziz Pipes )
|
CITYGENINS (City General Insurance Co.
Ltd. )
|
EBL (Eastern Bank )
|
|
EBL1STMF (EBL First
Mutual Fund )
|
IBBLPBOND (IBBL Mudaraba
Perpetual Bond )
|
LAFSURCEML (LAFARGE SURMA
CEMENT LTD. )
|
|
EBLNRBMF (EBL NRB Mutual
Fund )
|
IBNSINA (The Ibn Sina )
|
LANKABAFIN (LankaBangla
Finance ltd. )
|
|
ECABLES (Eastern Cables )
|
ICB (ICB )
|
LEGACYFOOT (Legacy
Footwear )
|
|
EHL (Eastern
Housing )
|
ICB1STNRB
(ICB AMCL 1st NRB Mutual Fund )
|
LIBRAINFU (Libra
Infusions Limited )
|
|
ENVOYTEX (Envoy Textiles
Limited )
|
ICB2NDNRB (ICB AMCL 2nd
NRB Mutual Fund )
|
LINDEBD (Linde Bangladesh
Limited )
|
|
EXIMBANK (Export Import
(Exim) Bank of Bangladesh )
|
ICB3RDNRB (ICB AMCL Third
NRB Mutual Fund )
|
LRGLOBMF1 (LR Global
Bangladesh Mutual Fund One )
|
|
FAREASTLIF (Fareast
Islami Life Insurance Co. Ltd. )
|
ICBAMCL1ST (ICB AMCL 1st
M.F. )
|
MAKSONSPIN (Maksons
Spinning Mills Limited )
|
|
FASFIN (FAS Finance &
Investment Limited )
|
ICBAMCL2ND (ICB AMCL Second Mutual
Fund )
|
MALEKSPIN (Malek Spinning Mills Ltd. )
|
|
FBFIF (First Bangladesh
Fixed Income Fund )
|
ICBEPMF1S1 (ICB Employees Provident MF
1: Scheme 1 )
|
MARICO (Marico Bangladesh Limited )
|
|
FEDERALINS (Federal
Insurance )
|
ICBIBANK (ICB Islamic
Bank Limited )
|
MBL1STMF (MBL 1st Mutual Fund )
|
Circuit
Breaker
Circuit Breaker is the maximum permissible
deviation of the price (specified as percentage) of the incoming order from the
Circuit Breaker Base Price for that instrument. Orders violating circuit
breaker will result rejection of the order.
(Applicable for Trade Code % Tick Size Base Price Lower Limit Upper
20.12.2012) Breaker Limit
1JANATAMF
1STBSRS
1STICB
1STPRIMFMF
2NDICB
3RDICB
4THICB
5THICB
6THICB
7THICB
8THICB
AAMRATECH
ABB1STMF
ABBANK
ACI
ACIFORMULA
ACIZCBOND
ACTIVEFINE
AFTABAUTO
AGNISYSL
AGRANINS
AIBL1STIMF
AIMS1STMF
AL-HAJTEX
ALARABANK
ALLTEX
AMBEEPHA
AMCL(PRAN)
ANLIMAYARN
ANWARGALV
APEXADELFT
APEXFOODS
APEXSPINN
APEXTANRY
ARAMIT
ARAMITCEM
ASIAINS
ASIAPACINS
ATLASBANG
AZIZPIPES
BANGAS
BANKASIA
BATASHOE
BATBC
BAYLEASING
BDAUTOCA
BDCOM
|
10.00
10.00
7.50
10.00
8.75
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
7.50
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
10.00
8.75
10.00
10.00
10.00
8.75
10.00
10.00
10.00
8.75
10.00
10.00
10.00
10.00
10.00
8.75
10.00
7.50
7.31
10.00
10.00
10.00
|
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.50
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
0.10
|
90.30
791.10
28.70
299.40
144.40
129.70
110.10
49.40
76.90
50.10
37.80
9.30
32.80
136.20
70.70
813.50
67.80
84.00
23.40
30.60
7.00
48.00
33.70
25.20
8.10
227.20
120.60
21.10
17.70
235.30
74.50
71.30
75.30
220.50
63.40
35.60
35.70
162.70
17.40
202.60
21.90
527.80
854.70
35.50
31.00
19.30
|
81.30
731.80
25.90
273.30
130.00
116.80
99.10
44.50
69.30
45.10
34.10
8.40
29.60
122.60
63.70
752.50
61.10
75.60
21.10
27.60
6.30
43.20
30.40
22.70
7.30
207.40
108.60
19.00
16.00
214.80
67.10
64.20
67.80
201.30
57.10
32.10
32.20
146.50
15.70
184.90
19.80
488.30
792.30
32.00
27.90
17.40
|
99.30
850.40
31.50
325.50
158.80
142.60
121.10
54.30
84.50
55.10
41.50
10.20
36.00
149.80
77.70
874.50
74.50
92.40
25.70
33.60
7.70
52.80
37.00
27.70
8.90
247.00
132.60
23.20
19.40
255.80
81.90
78.40
82.80
239.70
69.70
39.10
39.20
178.90
19.10
220.30
24.00
567.30
917.10
39.00
34.10
21.20
|
(Short
list)
TYPE OF
INVESTOR IN THE MARKET
According to our survey the market
investor of “Dhaka Stock Exchange” is like this _____ (based on assumption)
______
Among 100%, 40% are Bank, Insurance Company
_____ 20% Small and illiterate Investor
______25%
Professional Investor
______15%
Specula’s
STRENGTHS
ü Reasonable facilities .
ü Demandable stock supplies
ü Updated every
time.
ü Lot of broker
house across the country.
ü Nice decoration
ü Highly trained
employee
|
INTERNAL
FACTORS
|
WEAKNESSES
Ø Management
policy.
Ø Cost of high
business.
Ø Broker House commission is very high.
Ø Tax rate.
Ø Utility
expenses.
Ø Don’t keep
their loyal customer.
|
SWOT
|
POSITIVE
|
OPPORTUNITIES
ü Distribution
channels
ü Can cover occasional programs.
ü Open
their branch in any other district.
ü The
employee are also highly experienced
|
EXTERNAL
FACTORS
|
THREATS
ü Government
Policy and regulation.
ü Limitations
of the capitals.
ü Bank
interest.
ü Illiterate
investors
ü Gambler
problem
ü Insufficient
stock
ü Govt.
Corruption
|
NEGATIVE
|
EXISTING PROBLEM WITH DSE
Dhaka stock exchange is the largest stock exchange in Bangladesh. Some
time every large institute faces problem. Large number of people invest here
and exchange there securities every day. The problems of the capital markets in Bangladesh are structural,
and, actually quite far-reaching than what meets the eye. As we all know, the
capital markets here, notably the Dhaka Stock Exchange (DSE), is way overvalued
due to, firstly, the DSE index calculations being incorrect. Secondly, there
are big syndicates acting together to artificially influence the prices
resulting in huge profits for them at the expense of the average investors who
put in their hard earned lifetime savings. And last, but definitely not least,
is the Securities and Exchange Commission (SEC) whose total policy and
regulations favors' the syndicates which primarily consists of high net worth
people and the stock exchange members resulting in an "artificial demand
driven market". Until and unless these fundamental issues are addressed
the capital markets here will fail to see the light of the day.
So, if we look at the issues
individually like the DSE Index, the syndicates, comprising of stock exchange
members and the SEC we can find the common link, which is the stock exchanges
and the SEC.
The problem of Dhaka stock exchange is--------
§
At present market fall is the biggest
problem in DSE. In1996 was the first time market fall and recently DSE fall
again.
§
Lot of illiterate investor invests here
without any knowledge about stock market.
§
Some of dishonest investor control market
for there dishonesty activates.
§
Some of officer, some time disguise their
investor.
§
Some rules of govt. are not appropriate
for Dhaka stock exchange.
§
Govt. corruption is present here.
§
Small investor invests here with their won
capital. Sometime they can’t take loan for high interest rate.
RECOMMENDATIONS
The solution is actually twofold.
Firstly, there needs to be structural changes in the capital markets and
secondly, there needs to be more supply of good companies getting listed. Let's
look at the structural changes first. What I mean by structural changes is, in
essence, changes required at the DSE, CSE and the SEC. Let's look at the
structural changes at the stock exchanges first which can be brought about
through demutualization. Demutualization is the process of transformation from
members associations into for-profit corporations. Stock exchanges across the
globe have rethought their business strategy and model due to the simultaneous
convergence of a number of powerful developments in order to find ways of how
best to survive. And, in the process the exchanges have evolved towards new
corporate, legal and business models to strengthen governance and face
competition through the process of demutualization. Currently, the DSE and the
CSE operate under a modularized structure. Under demutualization the mutual
ownership structure will change to a share ownership structure. The process
entails first converting memberships into shares, which may or may not be
followed by a public issue. Ownership and trading privileges are effectively
separated. Stockbrokers are no longer owners but customers of the exchange.
Directors are elected by shareholders and answerable to them. The reasons for
demutualization are many but here are a few.
First and most importantly, in the
case of Bangladesh, it is of rationalized governance. The corporate model of
the exchange under demutualised structure will enable management to take
actions that are in the best interests of customers and the exchange itself.
With the separation of ownership and trading privileges, an exchange will
achieve greater independence from its members with respect to its regulatory
functions. There will be the requisite degree of transparency. Demutualised
exchanges will be forced to account to their shareholders regarding the bottom
line as well as corporate governance.
Secondly, there will be more investor
participation. The new corporation will be more profit orientated due to
shareholder accountability. Unlike a mutual structure where often only
broker-dealers a maybe member, a demutualised exchange affords both
institutional and retail investors the opportunity to become shareholders. A
demutualised exchange will have greater flexibility to accommodate the needs of
institutional investors as customers, and potentially, as owners.
Thirdly, it is the resources for
capital investment. A competitive stock exchange must be able to respond
quickly to global competitive forces and technological advances. With the
capital raised from initial public offerings or private investment and a
heightened awareness of accountability to stakeholders, a stock exchange should
have both the incentive and the resources to invest in the competitiveness of
its information systems. So to be competitive, products and services must not
only be timely and cost effective, but also reliable.
CONCLUSION
Stock exchange “Dhaka stock exchange” is becoming popular day by day by
providing there activates. The recent performance of the capital markets in
Bangladesh, notably from December 2010 till February of 2011, has been varying
poor compared with its performance over the last five years. the index fell
from a high of around 8,900 points to 5200 points, a drop of amount 42 percent
in just 3 months, Bangladesh capital markets have been tope 3 best performing
market in the world over the last three year. However, its recent performance
has cast a big doubt about its future performance. It is a case of “too much
money chasing too few stocks.” Finally, the government of
Bangladesh, who oversees the SEC, needs to ensure that the SEC as an
organization is run by more professional and credible people who has sound
knowledge of the capital markets and its mechanisms. If that means hiring professionals
from local or abroad and paying them attractive salaries then be it.
The second part of the solution
is to have more companies being listed. This also applies to the government
taking a dynamic approach in their privatization manifesto and deregulating the
economy so more of the state owned enterprises can be brought to the market
which in turn would benefit the exchequer from more revenues. Investors would
then have a wider selection of stocks to choose from thus making the former
state-owned enterprises accountable to shareholder pressure and making them
perform better.
This correction in the
market has been long overdue because there was too much money in the stock
market in too few stocks. This inflationary pressure was finally controlled by
the central bank by raising its cash reserve ratio and statutory liquidity
ratio thus resulting in limiting the liquidity flow into the capital market.
REFERENCES
1.
Dhaka stock exchange web site www.dsebd.org.
2.
www.bdstock.com,
3.
“Probe panel finds
massive manipulation at Bangla stock market”. India Times, 7 April 2011.
Retrieved 18 October 2011.
4.
Principle
of Marketing(A south Asian perspective){Philip Kotler| Gary Armstrong|Parfulla
Y. Agnihotri | Ehsan uI Hague
5.
“Capital
market: Structural Problems and solution” THE DAILY STAR, Thursday, April 14,
2011.
