Introduction

The necessity of establishing a stock exchange in the then East Pakistan was first decided by the
government when, early in 1952, it was learnt that the Calcutta Stock Exchange had prohibited
the transactions in Pakistani shares and securities. The Provincial Industrial Advisory Council of
Pakistan soon thereafter set up an organizing committee for the formation of a stock exchange in
East Pakistan. A decisive step was taken in the second meeting of the organizing committee held
on the 13th march, 1953. In the cabinet room, Eden building, under the chairmanship of Mr. A.
Khaleeli, secretary of the government of East Bengal, commerce, labor and industries
department at which various aspects of the issue were discussed in detail. Then the central
governments proposal regarding the opening a branch of Karachi Stock Exchange at Dhaka did
not find favor with the meeting who felt that East Pakistan should have an independent stock
exchange. It was suggested that Dhaka Narayanganj Chamber of Commerce & Industry should
approach its members for purchasing the membership cards at RS.2000 each for the proposed
stock exchange. It was thought that the location of the exchange should be either at Dhaka,
Narayanganj or at Chittagong. An organizing committee was appointed consisting of leading
commercial and industrial personalities of the province with Mr. Mehdi Ispahani as the convener
in order to organize the exchange.
The chamber informed its members and members of its affiliated associations of the proceedings
of the above meeting, requesting them to intimate whether they were interested in joining the
proposed stock exchange. This was followed by a meeting, at the chamber of which about 100
persons were interested in the formation of the exchange on July 7, 1953 (07.07.1953). The
meeting invited 8 gentlemen to become promoters of the exchange with Mr. M Mehdi Ispahani
as the convener and authorized them to draw up the memorandum and article of association of
the exchange and proceed to obtain register under the companys act 1913. The other 7
promoters of the exchange were Mr. J M Addision-Scott, Mr. Mhodammed Hanif, Mr. A C Jain,
Mr. A K Khan, Mr. M Shabbir Ahmed and Mr. Sakhawat Hossin.
It was also decided that membership fee was to be RS.2000 and subscription rate at RS.15 per
month. The exchange was to consist of not more than 150 members. A meeting of the promoters
was held at the chamber on September 03, 1953 (03.09.1953) when it was decided to appoint Orr
Dignam & Co. as the solicitors to draw up the memorandum and articles of association of the
stock exchange based on the rules prevailing in the stock exchanges in other countries and by
taking into account the local conditions.
The 8 promoters incorporated the formation as the East Pakistan Stock Exchange Association
Ltd. on April 28, 1954 (28.04.1954). As public limited company the name was revised to East
Pakistan Stock Exchange Ltd on June 23, 1962 (23.06.1962). Again on 14.05.1964 the name of
East Pakistan Stock Exchange Limited was changed to "Dhaka Stock Exchange Ltd."
At the time of incorporation the authorized capital of the exchange was RS. 300000 divided into
150 shares. Of RS. 2000 each and by an extra ordinary general meeting held on 22.02.1964 the

authorized capital of the exchange was increased to TK. 500000 divided into 250 shares of TK.
2000 each. The paid up capital of the exchange now stood at TK.460000 divided into 230 shares
of TK. 2000 each. However 35 shares out of 230 shares were issued at TK. 80,00,000 only per
share of TK. 2000 with a premium of TK. 79,98,000.
Although incorporated in 1954, the formal trading was started in 1956 at Narayanganj after
obtaining the certificates of commencement of business. But in 1958 it was shifted to Dhaka and
started functioning at the Narayangonj Chamber Building in Motijheel C/A.
On 1.10.1957 the stock exchange purchase a land measuring 8.75 kattah at 9F Motijheel C/A
from the government and shifted the stock exchange to its own location in 1959.

Legal Control:
The Dhaka Stock Exchange (DSE) is registered as a Public Limited
Company and its activities are regulated by its Articles of
Association rules & regulations and by-laws along with the Securities
and Exchange Ordinance - 1969, Companies Act - 1994 & Securities
& Exchange Commission Act - 1993.

The major functions are:

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).

Investors grievance Cell (Disposal of complaint bye laws 1997).

Investors Protection Fund (As per investor protection fund Regulations 1999).

Announcement of Price sensitive or other information about listed companies

through online

Vision
To be the leading exchange in the region and a key driver of economic growth with
state-of-art technology and world class service to ensure highest level of confidence
among stakeholders.

Mission
Proactive approach to keep pace with continuous technological advancement, and
providing highest standard of service through efficiency improvement and
introduction of new products.
Contributing to countrys economic growth through creation of wealth, facilitating
access to capital and penetrating untapped market.
Superior corporate governance to enhance confidence of investors, regulators,
issuers and intermediaries.

Objectives
Dhaka Stock Exchange shall endeavor to achieve the following objectives within
2020:
Commercial
Achieve a sustainable average daily turnover of BDT 25 billion.
Ensure steady domestic and offshore institutional investments of at least three
fourth of the total investments in the market.
Attract more foreign investments to attain a steady level of at least 30% of the
total market capitalization.
Double the total number of listed securities (other than Government Bills and
Bonds)
Increase depth and liquidity of bond market, including bringing in the Government
Securities under trading net.

 Increase breadth by listing new products, i.e. Index futures, ETF, Sukkuk and
derivatives. Knowledge Development
Enhance knowledge of general investors to ensure an aware and educated
investor base.
Governance
Ensure effective separation of regulatory function from commercial operation.
Enhance corporate governance and ensure investors protection. Technology
Deploy State-of-Art technology through continuous but prudent and effective
investment.
Human Resources Development
Ensure continuous learning for employees through effective training.
Ensure optimum organizational structure
Dse At a Glance
DSE at a Glance

Incorporated as East Pakistan Stock Exchange Association

28th April

Ltd.:
Start of Formal Trading:
Renamed as East Pakistan Stock Exchange Ltd.:
Renamed as Dacca Stock Exchange Ltd.:
Trading Suspended under new State Policy:
Trading Resumed in Bangladesh:
Starting Of All Share price Index calculation:
Share price Indices calculation on basis of IFC Designed
formula:
Starting of Automated trading:
Starting Of DSE-20 Index calculation:
Starting Of DSE General Index calculation:
Start of CDS through CDBL:
DSE All share price Index (DSI) Re introduced:
Regulations 2006 Introduced:
DSE Chittagong Office Inaugurated:
DSE Sylhet Office Inaugurated:
Book-Building Method Introduced:
Web Based Trading Software-MSA Plus Introduced:
DSE became Correspondent member of World Federation of
Exchanges:
Starting DSE Broad Index (DSEX) & DSE 30 Index DS30 (by
S&P):
Bangla Website Introduced:
The Exchanges Demutualization Act 2013 passed by the
Parliament:
Effective date of the Exchanges Demutualization Act 2013:
Signed an agreement with S&P Dow Jones Indices to launch
Shariah Index:
Transformed into a Demutualized Exchange:
Starting DSEX Shariah Index (DSES):
Go-live Ceremony for InstantWatch Market Surveillance

1954
1956
23rd June 1962
13th May 1964
16th
December
1971
16 August
1976
16th
September
1986
1st November
1993
10th August
1998
January 2001
27th
November
2001
24th January
2004
28th March
2005
12th April
2006
22nd
November
2007
30th March
2008
2010
10th June 2012
14th October
2012
28th January
2013
18th February
2013
29th April
2013
02nd May
2013
25th
September
2013
21st November
2013
20th January
2014
11th February

Software :
Signed an agreement with NASDAQ OMX and FlexTrade
Systems to provide the world leading trading system :
Next Generation Automated Trading System Inaugurated :
World Federation of Exchanges Correspondent membership
upgraded to affiliated :

2014
21st March
2014
11th
December
2014
3rd March
2015

DSE Clearing & Settlement System

The Automated Clearing and Settlement System (CNS) is developed to automate all
post trade activities regarding clearing and settlement. Its main stakeholders are
Brokerage houses, CDBL, Clearing Banks and DSE Finance Division. Major activities
of the system are as below;
Clearing: In clearing process DSE make payment by credit instruction and deliver
share through CDBL clearing schedule to buying broker.
Settlement: In settlement process DSE receives all charges, receivable amount from
selling brokers and earmark selling shares in selling broker clearing account through
CDBL settlement schedule.
Regulation 4 of the Settlement of Stock Exchange Transactions Regulation 1998 has
been given effect time to time.

DSE Indices

Dhaka Stock Exchange Indices The Dhaka Stock Exchange presently computes two
indices, DSE Broad Index (DSEX) and DSE 30 Index (DS30). None of the DSE Indices
include mutual funds, debentures and bonds.
Introduction of DSE Indices
The Dhaka Stock Exchange Limited introduced DSE Broad Index (DSEX) and DSE
30 Index (DS30) as per DSE Bangladesh Index Methodology designed and
developed by S&P Dow Jones Indices with effect from January 28, 2013. DSEXis
the Broad Index of the Exchange (Benchmark Index) which reflects around 97% of
the total equity market capitalization. DS30 constructed with 30 leading companies
which can be said as investable Index of the Exchange.DS30reflects around 51%
of the total equity market capitalization. The criteria taken into consideration in
construction of these Indices are:
Market Capitalization
DS30 - Eligible stocks must have a "oat-adjusted market capitalization above 500
million BDT as of the rebalancing reference date.
DSEX - Eligible stocks must have a "oat-adjusted market capitalization above 100
million BDT. Additionally, if a current index constituent falls below the 100 million
BDT threshold, but is no less than 70 million BDT, then the stock remains in the
index provided it also meets the other inclusion criteria.
Float-Adjustment: A stocks weight in an index is determined by its "oat-adjusted
market capitalization.

Liquidity
DS30- Stocks must have a minimum three-month average daily value traded (ADVT)
of 5 million BDT as of the rebalancing reference date. Liquidity criteria can be
reduced to 3 million BDT in certain circumstance to ensure there are enough
constituents in the index. At each semi-annual rebalancing, if a current index
constituent falls below 5 million BDT but is no less than 3 million BDT then the stock
remains in the index provided it also meets the other eligibility criteria.
DSEX - Stocks must have a minimum six-month ADVT of 1 million BDT as of the
rebalancing reference date. At each annual rebalancing, if a current index
constituent falls below 1 million BDT, but is no less than 0.7 million BDT, then the
stock remains in the index provided it also meets the other eligibility criteria.
In addition, all eligible stocks for the DSE indices are required to trade at least half
of normal trading days each month for the three months prior to the rebalancing
reference date.
Financial Viability

DS30 - Stocks must be profitable as measured by positive net income over the
latest 12-month period, as of the rebalancing reference date. The figure is
calculated by adding the latest four quarters of net income reported for the
company.
DSEX - Financial viability is not required for index membership.
Sector Classification
All listed DSE stocks are classified according to the DSE Industry Classification
system. The number of constituents in Banks, Financial Institutions, Insurance
sector, Real Estate Sub-sector of Service & Real Estate sector, Pharmaceuticals and
Fuel & Power is capped at 5 each and 20 combined for the DSE Bangladesh 30
Index.
Sector diversification rule is not applied to the DSE Bangladesh Broad Index. Sector
diversification rule is not applied to the DSEX.
Base Date
The base dates of the DSE 30 Index (DS30) and The DSE Broad Index (DSEX) are
January 17, 2008.
Base Value DSE 30 Index (DS30): The base value is 1000 for DS30 Index. The DSE
Broad Index (DSEX): The DSE Broad index has a base value of 2951.91 on Jan 17th
2008 which was the index value of the DSE General Index on this date. The new
index is a broad market index and is designed to reflect the broad market
performance. Starting the base value at 2951.91 the performance of the two indices
has been linked and we maintain the continuity of the performance of the
benchmark. The two indices are very close in design and we can build on the history
of the older index which goes back to 2001.

List of companies in DSEX index

DSE30 index

Algorithm of DSE Indices

Index Calculation Algorithm (according to IOSCO Index Methodology):

Yesterday's Closing Index X Current M.Cap

Current Index = -------------------------------------------------------------Opening M.Cap

Yesterday's Closing Index X Closing M.Cap

Closing Index = -------------------------------------------------------------Opening M.Cap

Current M.Cap = ( LTP X Total no. of indexed shares )

Closing M.Cap = ( CP X Total no. of indexed shares )

There are three indices in the DSE as follows :

Sl.No

Index Name

Base Index

DSI (all shares)

350 (as on 01-11-1993)

DGEN
(A, B, G & N)

817.63704 (as on 24-11-2001)

DS20

1000 (as on 01-01-2001)

Remarks
SEC directive regarding index was on
17-11-2001

Abbreviations and Acronyms

M.Cap
DSE
IOSCO
International
LTP
CP
- Closing Price

Organization
-

of

Market
Capitalization
Dhaka
Stock
Exchange
Securities
Exchange
Commissions
(IOSCO)
Last
Traded
Price