A Term Paper

On

“ROLE OF CAPITAL MARKET IN BANGLSDESH”

(This term paper is submitted for the partial fulfillment of the degree of bachelor of
business of administration with major in finance)

Submitted to:

Ms. Fatema Afreen

Lecturer
Department of Finance
Faculty of Business Studies
Premier University, Chittagong.

Submitted by:

Md Abdulla Al Naym

ID: 12-026-1-01-05960

Major: Finance

Program: BBA Batch: 26th

Premier University, Chittagong

Date of Submission: 16th August 2017

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 Letter of Transmittal

Date: 16th August, 2017

Ms. Fatema Afreen

Lecturer, Department of Finance
Premier University, Chittagong

Subject: Submission of term paper on “ROLE OF CAPITAL MARKET IN BANGLSDESH”

Dear Madam,

With due respect and honor submission that my term paper report on “ROLE OF CAPITAL
MARKET IN BANGLSDESH”. I tried my best to gather relevant information for preparing a
complete report on this topic. Without the sincere co-operation and proper guidance of you, it
would not be possible for me to prepare the report. For this act of kindness I am grateful to you.
This report is not totally free from the mistakes due to some unavoidable limitations.

So, I hope you accept it with gracious consideration.

Yours Sincerely,

____________________
(Md. Abdulla Al Naym)
Department of Finance
8th semester,
Section: B
ID No: 12-026-1-01-05960
26th Batch, BBA
Premier University Chittagong.

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 ACKNOWLEDGEMENT

At first, I would like to articulate my heartiest application to my honorable madam

Ms. Fatema Afreen, supportive supervisor, lecturer, faculty of Business studies, Premier
University, Chittagong.
Then I would like to extend my thanks to the contributors for their munificent help that, I
have received at different facility and who helped me by giving different information.
The achievement of this report depends on the contribution of my honorable madam.
Specially these, who spend time to share her mindful art of judging of merits and
suggestions.

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 Table of Contents

Page no.
Chapter 01 Introductory Aspects 7
1.1 Background of the Study 8
1.2 Objectives of the Study 9
1.3 Scopes of the Study 9
1.3 Methodology of the Study 10
1.4 Limitations of the Study 10
Chapter 02 Theoretical Aspects 11
2.1 Definition of Capital Market 12
2.2 Types of Capital Market 12
2.2.1 Primary Market 13
2.2.2 Secondary Market 14
2.3 Functions of Capital Market 15
2.4 Participants in Capital Market 16
2.5 The Role of Capital Markets in an Economy 17
2.6 Capital Market Instruments 17
2.6.1 Stocks 18
2.6.2 Bonds 18
2.6.3 Debenture 19
Chapter 03 Practical Aspects 20
Part-A
3.1 Financial Markets in Bangladesh 21
3.1.1 Money Market 21
Money Market Instruments 21
3.1.2 Capital Market 22
3.1.3 Taka Treasury Bond Market 22
3.1.4 Foreign Exchange Market 22
3.2 Brief History Of Capital Market 23
3.3 Capital Market Segment of Bangladesh 23
3.4 Management of Stock Exchanges 24
3.4.1 Criteria of the Share Category 24
3.4.2 Categorization of Listed Company 24
3.5 Regulatory Bodies of Bangladesh Capital Market 25
3.5.1 Bangladesh Securities and Exchange Commission (BSEC) 25
3.5.1.1 Mission of the BSEC 25
3.5.1.2 Functions of BSEC 26
3.5.2 National Board of Revenue 26
3.5.3 Bangladesh Bank 26
3.5.4 Central Depository Bangladesh Limited (CDBL) 27
3.5.4.1 Vision of CDBL 27
3.5.4.2 Mission of CDBL 27
3.5.4.3 CBL Milestones 428| P a g e
3.5.5 Dhaka Stock Exchange(DSE) 29
3.5.5.1 Brief History of DSE 29
3.5.5.2 Mission of DSE 29
3.5.5.3 Vision of DSE 29
3.5.5.4 Objectives of DSE 30
3.5.5.5 Legal Control of DSE 30
3.5.5.6 Functions of DSE 31
3.5.5.7 DSE at a Glance 31
3.5.5.8 Recent Development in DSE 32
3.5.6 Chittagong Stock Exchange (CSE) 33
3.5.6.1 Brief History of CSE 33
3.5.6.2 Vision of CSE 33
3.5.6.3 Mission of CSE 33
3.5.6.4 Objectives of CSE 33
3.5.6.5 Functions of CSE 34
3.5.6.6 Legal Basis of CSE 34
3.5.6.7 Internet Trading Services of CSE 34
3.6 Regulatory Framework of Bangladesh Capital Market 35
3.7 Bangladesh Capital Market Regulatory Structure 36
3.8 Listing Process (IPO) at DSE & CSE 37
3.9 General Stages and Relevant Process of Listing in DSE & CSE 37
3.10 Bonds Market of Bangladesh 39
3.10.1 Corporate Bonds Market of Bandladesh 40
3.11 Bangladesh Shilpa Bank 41
3.11.1 Historical Background of BSB 41
3.11.2 Mission of BSB 41
3.11.3 Function of BSB 41
3.12 Bangladesh Shilpa Rin Sangstha 42
3.12.1 Company Overview of Bangladesh Shilpa Rin Sangstha 42
3.12.2 Role Played by BSRS 42
3.13 Investment Corporation of Bangladesh 43
3.13.1 Objectives of ICB 43
3.13.2 Basic Functions of ICB 43
Part- B
3.14 Capital Market Development in Bangladesh 44
3.15 Market Capitalization 44
3.16 Debacles in Bangladesh Capital Market 45
3.16.1 Debacle During 1996 45
3.16.2 Debacle During 2010 45
3.17 Reasons Behind the Two Major Debacles 46
3.17.1 Political Economy Inducing Demand Since 2007 46
3.17.2 Macro-Economic Factors Inducing Excess Savings 46
3.17.3 Gas and Power Sector Shortage and Idle Business Funds 46
3.17.4 Excess Liquidity in Financial Sector in 2009 47
3.18 Reform of the Capital Market After the Disorder 47

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 3.19 Findings and Analysis 48
3.20 SWOT Analysis 54
Chapter 04 Conclusion Aspects 59
4.1 Recommendations 60
4.2 Conclusion 62

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1.1 Background of the Study
Capital markets are markets for buying and selling equity and debt instruments. Capital markets
channel savings and investment between suppliers of capital such as retail investors and
institutional investors, and users of capital like businesses, government and individuals. Capital
markets are vital to the functioning of an economy, since capital is a critical component for
generating economic output. Capital markets include primary markets, where new stock and
bond issues are sold to investors, and secondary markets, which trade existing securities. The
capital market is the market for securities, where companies and governments can raise long
term funds. The capital market includes the stock market and the bond market. Capital markets
promote and keep capitalism alive. The markets are a critical piece to may country’s economies
and the bigger the markets the more potential for economic growth. It allows for consumers and
businesses to have a share in the nation’s wealth. The availability of several ways to raise money
needed is attractive because they can continue to strike into new sources of money over time.

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1.2 Objectives of the Study
The prime purpose of the study is to fulfill the academic requirements of BBA program. The
objective of this study is to look into every aspect of Bangladesh capital market & evaluate the
prospects, possibility & future of Bangladesh capital market. The specific objectives of this study
are:

1. To have an overall idea about the capital market-its structures, functions, importance, etc.
2. To study the functional procedure of capital market.
3. To study the organizational structure of capital market.
4. To identify various rules & regulation of capital market.
5. To identify the roles played by capital market in Bangladesh economy.

1.3 Scopes of the Study

This study is a part of academic curriculum of the BBA student. The collected data and
information have been tabulated, processed and analyzed carefully and report has been prepared
in the present form of non-financial market and the study more informative and useful.
This study is conducted at Chittagong Stock Exchange & Dhaka Stock Exchange. To be
acquainted with the real life situations especially with capital market.
Chittagong Stock Exchange & Dhaka Stock Exchange are very rich that’s why I able to collect
the required journals, brochures, articles and the internet facilities.

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1.3 Methodology of the Study
The secondary data were collected to clarify different conceptual matters from internet and
annual report used. Sources of secondary data are:

Secondary data collection:

 Annual Report

 Different papers

 Various files, balance sheet and various documents

 Websites

An intensive literature survey was required to acquire relevant knowledge. Relevant literature
like published and unpublished thesis, books, reports etc. have been reviewed with a view to
increase the knowledge and regarding the issue. Above all the storehouse of knowledge, “the
internet” will also be a big part of the literature review.

1.4 Limitations of the Study

This study is a part of my academic course. The collected data & information have been
processed, tabulated & analyzed carefully and sincerely to make this report more useful &
informative. In spite of that this paper has or may have some limitations likely:

 Due to the time limitation, I could not collect enough necessary data\information about the
study.
 Primary and Secondary data were not available in organized form.
 It was my first time, doing a report on a practical corporate life. So my limited experience
was the main obstacle of this study.

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2.1 Definition of Capital Market
Capital market is a mechanism to flow fund from the hands of small savers (individuals and
institutions) at low costs to those entrepreneurs who do need fund to start business or to business.
In the other words, capital market mechanism gives a part ownership of big
companies/corporations to small savers like you and me. In simple term, it is a globally accepted
scheme to share ownership of economic development with general public.
Capital markets are a broad category of markets facilitating the buying and selling of financial
instruments. In particular, there are two categories of financial instruments that capital in which
markets are involved. These are equity securities, which are often known as stocks, and debt
securities, which are often known as bonds. Capital markets involve the issuing of stocks and
bonds for medium-term and long-term durations, generally terms of one year or more.
The capital market is the market for securities, where companies and governments can raise
long-term funds. It is a market in which money is lend for periods longer than a year. The capital
market includes the stock market and the bond market. Capital market is the group of interrelated
markets, in which capital in financial form is lend or borrow for medium and long term and, in
cases such as equities, for unspecified periods. Capital market is a market in which individuals
and institutions trade financial securities, organization/institutions in the public and privet sector
also often sell securities on the capital markets in order to raise funds. Thus, this type of market
is composed of both the primary and secondary markets.

2.2 Types of Capital Market

Capital market is divided into Primary Market & Secondary Market. The primary market is designed for
the new issues and the secondary market is meant for the trade of existing issues. Stocks and bonds are
the two basic capital market instruments used in both the primary and secondary markets.

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2.2.1 Primary Market

The primary capital market is concerned with the new securities which are traded in this market.
This market is used by the companies, corporations and the national governments to generate
funds for different purpose. The primary capital markets are also called the New Issue market.
The securities which are introduced in the market are sold for first time to the general public in
this market. This market is also known as the long term debt market as the money rose from this
market provides long term capital. The process of offering new issues of existing stocks to the
purchasers is known as underwriting. At the same time if new stocks are introduced in the
market, it is called the Initial Public Offering.

The act of selling new issues in the primary capital market follows a particular process. The
primary issues which are offered in the primary capital market provide the essential funds to the
companies. These primary issues are used by the companies for the purpose of setting new
businesses or to expanding the existing business.

At the same time, the funds collected through the primary capital market, are also used for the
modernization of the business & also involved in the process of creating capital for the
respective economy.

There are five ways of offering new issues in the primary capital market. These are:

1. Public Issue: Securities are issued to the all the members of the public who are eligible to
participate in the issue.

2. Private Placement: The sale of securities to a relatively small number of select investors as a
way of raising capital. This is a wholesale issue of securities to institutional investors by an
unlisted company.

3. Preferential Issue: A private placement of securities by a listed company. Securities are

issued to an identified set of investors which may include promoters, strategic investors,
employees and such groups.

4. Qualified Institutional Placement (QIP): A private placement of securities by a listed

company to a set of institutional investors termed as qualified institutional buyers is a QIP.

5. Rights and Bonus Issues: Securities are issued to existing investors by offering them to buy
more securities at a pre-determined price (rights) or get an allotment of additional free shares
(bonus).

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2.2.2 Secondary Market

The secondary markets play a market place that is already issued in the primary market. The
secondary debt market deals with the debts and hence is also known as the debt or credit market.
The secondary bonds market handles the reselling of bonds by investors.
The money that is paid for bonds in the secondary market goes to other investors but not to the
issuers. On the other hand in case of the primary market the money paid by the investors goes
directly to the issuer companies. When the investors purchase bonds, they can either hold it until
its maturity date. The investor can thus receive regular interest payments and the principal as
well at its maturity.

On the other hand, the investor can also sell it before the maturity date in the secondary bond
market. The new owner of the bond now will be eligible to receive the regular interest payments
and also the principal at the end of bond’s maturity period.
The resale value of a bond in the secondary markets differs from that of the face value. The The
resale value of the bond is based on the interest rate of the day when the transaction is carried
out. With the rise or fall of the interest rate, the value of bond also rises or falls accordingly.

Trading in the secondary bond market is important for both the capital market and economy.
Hence it is necessary that the secondary market be highly transparent and liquid in nature.

Types of Secondary Market:

1. Organized Exchange: It has a physical existence for trading of securities. Example: DSE,
CSE.

2. Over the Counter Market: It has no physical trading facility but a far-flung collection of
securities brokers-dealer who participates in arranging transactions of unlisted securities.

3. Third Market: Trading of listed securities in the OTC market is called third market.

4. Fourth Market: The direct trading of stocks between two transactors without the use of
brokers is called the fourth market.

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 Capital Market

Primary Market Secondary Markets

1. Public Issue 1. Organized Exchange

2. Private Placement 2. Over the Counter Market

3. Preferential Issue 3. Third Market

4. Qualified Institutional 4. Fourth Market

Placement (QIP

5. Rights and Bonus Issues

2.3 Functions of Capital Market

The functioning of an efficient capital market may ensure smooth floatation of funds from the
savers to the investors. When banking system cannot meet up the total need for funds in the
market, capital market stands up to supplement. To put it in a single sentence, we can therefore
say that the increased need for funds in the business sector has created an immense need for an
effective and efficient capital market. It facilitates an efficient transfer of resources from savers
to investors and becomes conduits for channeling investment funds from investors to borrowers.
The capital market is required to meet at least two basic requirements:

I. It should support industrialization through savings mobilization, investment fund

allocation and maturity transformation and
II. It must be safe and efficient in discharging the aforesaid function. It has two segments,
namely, securities segments and non-securities segments.

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 2.4 Participants in Capital Market
Participants in Capital market may be discussed in groups because of their similar activities,
Groups or cluster of the participants are discussed below

i. Lone Providers:
These types of organization provide loans to the capital market other can take loan from the loan
providers such as saving organizations etc.
ii. Loan Takers:
A huge number of organizations want to take loan from the capital market. Among them
following are prominent as Govt. organizations, corporate bodies, Non-profit organizations,
Small business and Local authorities.
iii. Financial Intermediaries:
Financial intermediaries are media between loan provider and takers. The financial
intermediaries are Insurance organizations, Pension funds, Commercial banks, financing
companies, saving organizations, Dealers, Brokers, Jobbers, Nom-profit organizations.
iv. Service Organizations:
Service organization help to run capital market perfectly. These firms, in one hand, help issuer or
underwriters to sell their instruments with high value and in other hand help sellers and buyers to
transact easily. These are mainly service Organization-Investment banks, Brokers, Dealers,
Jobbers, Security Exchange Commission, Rating service, Under Writers.
v. Regulatory Organizations:

Regulatory organizations are mainly Govt. authority that monitors and controls the capital
market. It secures both the investor and corporations. It strongly protects forgery in stock market.
Regulatory organization controls the margin also. Central bank on behalf of Govt. generally
controls the financial activities in a country.

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 2.5 The Role of Capital Market in an Economy

 Provides an important alternative source of long-term finance for long-term productive

investments. This helps in diffusing stresses on the banking system by matching long-term
investments with long-term capital.
 Provides equity capital and infrastructure development capital that has strong socio-economic
benefits - roads, water and sewer systems, housing, energy, telecommunications, public
transport, etc. - ideal for financing through capital markets via long dated bonds and asset
backed securities.
 Provides avenues for investment opportunities that encourage a thrift culture critical in
increasing domestic savings and investment ratios that are essential for rapid
industrialization. The Savings and investment ratios are too low, below 10% of GDP.
 Encourages broader ownership of productive assets by small savers to enable them benefit
from Bangladesh’s economic growth and wealth distribution. Equitable distribution of
wealth is a key indicator of poverty reduction.
 Promotes public-private sector partnerships to encourage participation of private sector in
productive investments. Pursuit of economic efficiency shifting driving force of economic
development from public to private sector to enhance economic productivity has become
inevitable as resources continue to diminish.
 Assists the Government to close resource gap, and complement its effort in financing
essential socio-economic development, through raising long-term project based capital.
 Improves the efficiency of capital allocation through competitive pricing mechanism for
better utilization of scarce resources for increased economic growth.

2.6 Capital Market Instruments

Capital market instruments are responsible for generating funds for companies, corporations and
sometimes national governments. These are used by the investors to make a profit out of their
respective markets. There are a number of capital market instruments used for market trade,
including –

 Stocks
 Bonds
 Debentures etc

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2.6.1 Stocks

Stock is a type of security that signifies ownership in a corporation and represents a claim on part
of the corporation's assets and earnings. There are two main types of stock: common and
preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to
receive dividends. Preferred stock generally does not have voting rights, but has a higher claim
on assets and earnings than the common shares. For example, owners of preferred stock
receive dividends before common shareholders and have priority in the event that a company
goes bankrupt and is liquidated. There are four main types of shares:

Common: Common shares are standard shares with no special rights or restrictions. They have
the potential to give the highest financial gains, but also have the highest risk. Ordinary
shareholders are the last to be paid if the company is wound up.

Preference: Preference shares typically carry a right that gives the holder preferential treatment
when annual dividends are distributed to shareholders. Shares in this category receive a fixed
dividend, which means that a shareholder would not benefit from an increase in the business'
profits. However, usually they have rights to their dividend ahead of ordinary shareholders if the
business is in trouble. Also, where a business is wound up, they are likely to be repaid the par or
nominal value of shares ahead of ordinary shareholders.

Cumulative Preference: Cumulative Preference shares give holders the right that, if a dividend
cannot be paid one year, it will be carried forward to successive years. Dividends on cumulative
preference shares must be paid, despite the earning levels of the business, provided the company
has distributable profits.

Redeemable: Redeemable shares come with an agreement that the company can buy them back
at a future date - this can be at a fixed date or at the choice of the business. A company cannot
issue only redeemable shares

2.6.2 Bonds

A bond is a debt investment in which an investor loans money to an entity (typically corporate or
governmental) which borrows the funds for a defined period of time at a variable or fixed interest
rate. Bonds are used by companies, municipalities, states and sovereign governments to raise
money and finance a variety of projects and activities. Owners of bonds are debt holders,
or creditors, of the issuer.

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Types of Bonds:
On the Basis of Variability of Coupon;

1. Zero Coupon Bonds

Zero Coupon Bonds are issued at a discount to their face value and at the time of maturity,the
principal/face value is repaid to the holders. No interest (coupon) is paid to the holdersand hence,
there are no cash inflows in zero coupon bonds. The difference between issueprice (discounted
price) and redeemable price (face value) itself acts as interest to holders.
2. Floating Rate Bonds
In some bonds, fixed coupon rate to be provided to the holders is not specified. Instead, the
coupon rate keeps fluctuating from time to time, with reference to a benchmark rate. Such types
of bonds are referred to as Floating Rate Bonds.

On the Basis of Variability of Maturity:

1. Callable Bonds
These securities have provisions allowing the issuer to redeem the issue prior to the scheduled
maturity date
2. Puttable Bonds
The holder of a puttable bond has the right (but not an obligation) to seek redemption(sell) from
the issuer at any time before the maturity date. The holder may exercise put option in part or in
full.
3. Convertible Bonds
The holder of a convertible bond has the option to convert the bond into equity (in the same
value as of the bond) of the issuing firm (borrowing firm) on pre-specified terms.

On the Basis of Principal Repayment:

1. Amortizing Bonds
Amortizing Bonds are those types of bonds in which the borrower (issuer) repays the principal
along with the coupon over the life of the bond. For example - auto loans, home loans, consumer
loans, etc.

2. Bonds with Sinking Fund Provisions

Bonds with Sinking Fund Provisions have a provision as per which the issuer is required to retire
some amount of outstanding bonds every year. The issuer has following options for doing so by
buying from the market. By creating a separate fund which calls the bonds on behalf of the issuer

2.6.3 Debenture
A debenture is a type of debt instrument that is not secured by physical assets or collateral.
Debentures are backed only by the general creditworthiness and reputation of the issuer. Both
corporations and governments frequently issue this type of bond to secure capital. Like other
types of bonds, debentures are documented in an indenture.

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 Part-A

3.1.2 Capital Market

The primary issues and secondary trading of equity securities of capital market take place
through two (02) stock exchanges-Dhaka stock exchange and Chittagong stock exchange. The
instruments in these exchanges are equity securities (shares), debentures and corporate bonds.
The capital market is regulated by Bangladesh Securities and Exchange Commission (BSEC).

3.2 Brief History of Bangladesh Capital Market

Bangladesh capital market has achieved some major milestone events in the recent past. The
capital market operations in this part of the country started in mid fifties with the establishment
of East Pakistan Stock Exchange Association in 1954, which started trading in 1956. Initially it
was a mutual organization (cooperative body) which was corporatized in recent activity of the
Dhaka Stock Exchange (DSE) in term of turnover in the name of Dacca Stock Exchange Ltd.
During those early periods until 1971, all trades in the exchange were conducted using trading
data collected over telephone from Karachi Stock Exchange. After independence of Bangladesh,
the operations of the stock exchange remained suspended until August 1976. At that time market
trading started with only 14 listed companies having market value of only taka 90 million. The
trade volume was very thin and could not attract investors. Over time some reform initiatives
were taken to strengthen the market. First time Tk. 1 crore daily trades were recorded in April
1992. Government adopted the Securities and Exchange Commission Act 1993 and established
the SEC as the regulatory authority for the market and the Securities and Exchange Commission
(SEC), established in 1993 under this Act, as the central regulatory agency oversees the activities
of the entire capital market including issue of capital, monitoring the issue of stocks and
operation of the stock markets including regulating of portfolio market.

3.3 Capital Market Segment of Bangladesh

 Non Security Segment

1. Department of Financial Institution(DFIs):

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- Bangladesh Shilpa Bank (BSB) - Bangladesh Shilpa Rin Sangstha (BSRS)

-Investment Corporation of Bangladesh (ICB)

2. Commercial Bank:

a) National Bank b) Private Bank

 Security Segment

1. Stock Exchanges:

-Dhaka Stock Exchange (DSE) -Chittagong Stock Exchange (CSE)

3.5 Regulatory Bodies of Bangladesh Capital Market

Capita market in Bangladesh is regulated by following regulatory bodies_

1. Security & Exchange Commission (SEC )

2. National Board of Revenue (NBR )
3. Bangladesh Bank
4. Register on Join Stock Companies & Firm’s
5. Central Depository Bangladesh Limited (CDBL)
6. Dhaka Stock Exchange ( DSE )
7. Chittagong Stock Exchange ( CSE )

3.5.1 Bangladesh Securities and Exchange Commission (BSEC)

The Bangladesh Securities and Exchange Commission (BSEC) was established on 8th June,
1993 as the regulator of the country’s capital market through enactment of the Securities and
Exchange Commission Act 1993. Through an amendment of the Securities and Exchange
Commission Act, 1993, on December 10, 2012, its name has been changed as Bangladesh
Securities and Exchange Commission from previous Securities and Exchange Commission. The
Commission consists of a Chairman and four Commissioners who are appointed for fulltime by
the government for a period of four years and their appointment can be renewed only for further
one term, but the condition is that age cannot exceed 65 in position during the tenure. The
Chairman acts as the Chief Executive Officer (CEO) of the Commission. The Commission has

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overall responsibility to formulate securities legislation and to administer as well. The
Commission is a statutory body and attached to the Ministry of Finance.

3.5.1.2 Functions of Bangladesh Securities and Exchange Commission (BSEC)

 Regulating the business of the Stock Exchanges or any other securities market.
 Registering and regulating the business of stock-brokers, sub-brokers, share transfer agents,
merchant bankers and managers of issues, trustee of trust deeds, registrar of an issue,
underwriters, portfolio managers, investment advisers and other intermediaries in the
securities market
 Registering, monitoring and regulating of collective investment scheme including all forms
of mutual funds.
 Monitoring and regulating all authorized self regulatory organizations in the securities
market.
 Prohibiting fraudulent and unfair trade practices relating to securities trading in any securities
market.
 Promoting investors’ education and providing training for intermediaries of the securities
market.
 Prohibiting insider trading in securities.
 Regulating the substantial acquisition of shares and take-over of companies.
 Undertaking investigation and inspection, inquiries and audit of any issuer or dealer of
securities, the Stock Exchanges and intermediaries and any self regulatory organization in
the securities market.

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3.5.5.8 Recent Developments in DSE and Regulatory Reforms for Capital
Market
On September 14, 2015 Dhaka Stock Exchange Limited arranged a symposium on “Recent
Developments in DSE and Regulatory Reforms for Capital Market” convened by its Chairman
Justice Siddiqur Rahman Miah. In that occasion Professor Dr. M. Khairul Hossain, honorable
Chairman, Bangladesh Securities & Exchange Commission was the chief guest while Mr. Helal
Uddin Nizami, Commissioner, BSEC was the special guest. In the program DSE Managing
Director Professor Dr. Swapan Kumar Bala, FCMA gave a presentation on “Recent
Developments in DSE and Incentives for Capital Market Participants”. Executive Director of
BSEC Mr. Md. Saifur Rahman delivered a presentation on “Regulatory Reforms of the Capital
Market”. At that time BSEC Commissioners, DSE TREC Holders’ representatives and high
officials of DSE were present.

3.6 Regulatory Framework of Bangladesh Capital Market

Acts:
1. The Securities Act, 1920 (Act No. X of 1920)
2. The Securities and Exchange Commission Act, 1993
3. The Companies Act, 1994

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4. Depository Act, 1999

Rules:
1. The Securities and Exchange Rules, 1987
2. Securities and Exchange Commission (Meeting Related) Rules, 1994
3. Securities and Exchange Commission (Appeal) Regulations, 1995
4. Securities and Exchange Commission (Prohibition of Insider Trading) Rules, 1995
5. Securities and Exchange Commission (Merchant Banker and Portfolio Manager) Rules, 1996
6. Credit Rating Companies Rules, 1996
7. Margin Rules, 1999
8. Securities and Exchange Commission (Stock Dealer, Stock Broker and Authorized
Representative) Rules, 2000
9. Securities and Exchange Commission (Market Maker) Rules, 2000
10. Securities and Exchange Commission (Mutual Fund) Rules, 2001
11. Securities and Exchange Commission (Issue of Capital) Rules, 2001
12. Securities and Exchange Commission (Over-The-Counter) Rules, 2001
13. Securities and Exchange Commission (Substantial Share Acquisition and Takeover) Rules,
2002
14. Securities and Exchange Commission (Security Custodial Service) Rules, 2003
15. Securities and Exchange Commission (Asset Backed Securities) Rules, 2004
16. Securities and Exchange Commission (Public Issue) Rules, 2006
17. Securities and Exchange Commission (Rights Issue) Rules, 200

Regulations:
1. Listing Regulations of Stock Exchanges
2. Trading Regulations of Stock Exchanges
3. Settlement of Stock Exchange Transactions Regulations, 1998
4. Investors’ Protection Fund Regulations, 1999
5. Stock Exchange (Board and Administration) Regulations, 2000
6. Stock Exchange (Member’s Margin) Regulations, 2000
7. CSE (Internet Based Trading Services) Regulations, 2002
8. Depository Regulations, 2000
9. Depository (User) Regulations, 2003

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3.7 Bangladesh Capital Market Regulatory Structure

Peoples Republic of Bangladesh Ministry of Finance

 The security Act- 1920

 The Security & Exchange Ordinance-
Company Act-
1969
 Security & Exchange Rules- 1987 1994
 Security & Exchange Commission Act-
1993

The Registered of
Joint Stock Company
Security & Exchange Commission

Central Depository CSE DSE

Bangladesh Ltd

The Security Act-1920

The Depository Act- The Security & Exchange Commission Act- 199
1920

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3.14 Capital Market Development in Bangladesh
Bangladesh stock markets have grown significantly during the last decade. Still, the size of the
market is relatively small compared to other Asian Markets. Size and liquidity of the companies
provide some distinguishing features of developing markets. The market capitalization ratio,
defined as the value of listed stocks divided by GDP, is used as a measure of stock market size. It
has got economic significance because market size is positively correlated with the ability to
mobilize capital and diversify risk. Total market capitalization of DSE was US $ 1.049 billion in
1994 compared to US $ 127.515 billion in India, US $ 12.263 billion in Pakistan, US $ 191.778
billion in South Korea and US $199.276 in Malaysia. This market is also small relative to the
size of the economy. Market capitalization in Bangladesh was only 4.07 per cent of GDP in 1994
against 25.77per cent in Pakistan, 24.03 per cent in Sri Lanka, 104.14 per cent in Thailand
and294.56 per cent in Malaysia. This ratio for Bangladesh is 0.075 in June 1997 and 0.05 in June
2000.
Almost 33 lakh investors are now involved in the capital market at the moment; more than 70%
of which are general investors. The total market capitalization of all shares and debentures of the
listed securities stood at USD 49.4 billion by the end of 2010, indicating an 84% growth from the
year before. The total turnover has increased from USD 0.13 billion to USD 0.25 billion at the
end of 2010 which indicates a 91% growth. However, the capital market has been exposed to
greater risk since PE ratio rose from19.9% to 29.71% from January, 2010 to November,
2010.Dematerialization may be successful in stimulating the further growth of Bangladesh
capital market, but to ensure the success of such an initiative, it will be necessary to ensure that
the regulatory framework and authority are sufficiently strong, in order to strike a balance
between the interests of both the members of stock exchanges and the public. On a long-term
basis, it may be important for a successful bond market to be built in Bangladesh. This can assist
in creating more instruments for investors and, at the same time, creating some depth in the
capital market. Bond markets can also be utilized by the government in raising necessary funds,
and can serve as an efficient method of financing in large projects.

3.15 Market Capitalization

Market statistics shows that the total market capitalization at the country’s prime Bourse-Dhaka
Stock Exchange Limited stood at Tk. 2700.74 billion on 30 June,2010 against Tk.1,241.34
billion on 30 June,2009. In comparison with the market capitalization of 2009-10 with
the corresponding period (2008-09) we see that total market capitalization rose by 117.57 percent
and by the amount of Tk. 1459.40 billion. Again the market capitalization to GDP rose to
39.12 percent on 30 June, 2010 against 20.19 percent on 30 June, 2009. But after a huge
transaction volume market capitalization has risen to a record high in recent time to tk 3,680.71
billion on 05 December, 2010 and subsequently market capitalization to GDP also rose 53.30
percent marking significant record.

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3.16 Debacles in Bangladesh Capital Market
The capital market of Bangladesh had two major debacles which occurred in 1996 and2010,
creating some bad impacts upon the country’s total capital market.

3.16.1 Debacle During 1996

During 1996 some local and foreign initiatives succeeded in drawing some international attention
which was followed by an international conference in 1994. The conference followed by some
regional as well international market destabilizing events, some hedge fund managers started
investing in the local capital market. The market was neither operational nor in terms of legal
structure ready to absorb such sudden surge in demand both at home and abroad. Consequently
within a very short tenure (from July to October of 1996) the market price level soared to a
record level (of that time) height with the index rising from 894 levels lo 3627 level. The market
P/E ratio of all the listed securities reached to the level of 66.5 within a short period of 4 months.
The 'cry out' auction based trading system of DSE could not handle the huge demand coming
from several thousand investors who crowded the Motijheel thoroughfare. Consequently street
based curb market took over the legal trade executed through stock market sys-tem.
Unsuspecting inexperienced new entrant investors allured by very quick profit potentials were
buying anything without understanding substance, legality and validity of their investment.
Unscrupulous market players (which even include some issuers) were minting fortunes by selling
fake securities to the crowd who were eager to make quick profit from the market. Thereafter, for
obvious reason the market experienced first major crash in l996 affecting about fifty thousand
investors

3.16.2 Debacle During 2010

The market crash of 2010 drew greater degree of attention because much larger segments of
population spreading all around the country are affected this time as the market in this period has
gained significant growth. The securities market debacle in 2010need to be viewed from
different perspectives. The following section attempts to ex-amine those issues mostly from
demand side factors. This is a plain logical analysis supported by some facts and figure. The
analysis covered the period from 2004 till2010 because, the impacts of 1996 continued until
2003 period. It can be considered that, the market started consolidation and development from
2004.

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3.17 Reasons Behind the Two Major Debacles

Analysis shows that, the capital market of the country experiences some abnormal upheaval
during the last few years, which had full bubble effects in 2010 concluding with the burst. The
causes and factors to such behavior are as following.

3.18 Reform of the Capital Market After the Disorder

The stock market crash reveals structural weaknesses of the market. This leads to all concerned
feeling the agenda for market reforms. Rules, laws and guidelines are framed and implemented
to improve infrastructure and foundation on which the stock ex-changes can operate effectively.
Major notable features of capital market reforms implemented so far include:

a) Reorganizing SEC to strengthen infrastructure capabilities and build capacity.

b) Updating rules, laws and guidelines to improve regulation framework:

 Amendment of the SEC Act 1993 to empower SEC a vetting power, financial penalty power
with a view to monitoring and enforcing compliance of rules. SEC is also allowed to conduct
special audit to detect window dressing in the accounts of the listed firms, if it suspects.
 Information disclosure rule specifying the requirements to comply with the International
Accounting Standard (IAS) and International Standards of Auditing (ISA) for timely and
quality information disclosure in the market.
 In the new issue rule, the pricing of IPOs has been delegated to the issue manager.
 In the merchant bank regulation, three activities, viz., issue management, underwriting and
non-discretionary portfolio management, are restricted to merchant banks operating in
Bangladesh.

c) Separation of the management from the ownership at both DSE and CSE
d) Inclusion of the representatives of the listed companies and the investors on the governing
bodies of both DSE and CSE
e) Automation of trading at both DSE and CSE introducing order-driven system re-placing out-
cry system.
f) Amendment of the Trust Act, 1882 enabling pension fund and insurance fund investing in
securities market and thereby create demand for securities.
g) Enactment of the Central Depository Act enabling national securities ltd. company to establish
CDS. The implementation of the on-line CDS will in fact avoid problems of "fake shares" and
"short sale" to a great extent.

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However, a few important reform measures are still pending. These include, among others:
a) Restructuring Investment Corporation of Bangladesh (ICB) by creating three subsidiary
companies carrying out the function of merchant banking, fund management and
securities brokerage house.
b) Divesting government holdings in SOEs and MNCs through securities market.
c) Issuing government securities with medium term and long-term maturities on a regular
basis through the securities market. Thus the period of 2003 to ‘06 can be viewed as a
period of consolidation & restoration.

3.19 Findings and Analysis

3.19.1 Bangladesh Economic Outlook:

GDP Growth Rate

2016
2014
2012
2010
2008
2006
7.05 6.55 6.06 6.01 6.52 6.46 5.57
2016 2015 2014 2013 2012 2011 2010

The Gross Domestic Product (GDP) in Bangladesh expanded 7.05 percent in 2016 from the
previous year. GDP Growth Rate in Bangladesh averaged 5.72 percent from 1994 until 2016,
reaching an all time high of 7.05 percent in 2016 and a record low of 4.08 percent in 1994. GDP
growth rate in Bangladesh is reported by the World Bank.

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Inflation Rate

7
6 6.07
5.38 5.57 5.53 5.37 5.4 5.53 5.45 5.61 5.65 5.62
5 5.03
4
3
2
1
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Consumer prices in Bangladesh increased 5.03 percent year-on-year in December of 2016,

following 5.38percent growth in the previous month. It was the lowest inflation rate since
September 2012, as cost rose at a slower pace for food (+5.38 percent vs +5.41 percent in
November) and nonfood (+4.49 percent vs +5.33 percent in November). The inflation stayed
below the government's target of 5.8 percent for 2017 fiscal year.

Inflation Rate in Bangladesh averaged 6.63 percent from 1994 until 2016, reaching an all time
high of 16.00 percent in September of 2011 and a record low of -0.03 percent in December of
1996. Inflation Rate in Bangladesh is reported by the Bangladesh Bureau of Statistics.

3.20 SWOT Analysis:

The equity capital market of Bangladesh is overshadowed by recent market failure and investor
mistrust. The industry has often been considered highly volatile by industry experts and
specialists. The market has sometimes been marred as highly unpredictable because of high
uncertainty involved with market returns and overall risk perspective. Interviews with the
executives from different equity firms currently operating in the capital market of Bangladesh
has revealed some key characteristics of the market. Following is an industry analysis covering
the strengths, weaknesses, opportunities and threats of the industry.

3.20.1 Strengths:
1. Protection of Foreign Investors:

Over a dozen of foreign hedge/frontier funds are operating in the capital market in Bangladesh.
One of the reasons behind their investing in here is that Bangladesh Government is strictly
concerned about the capital safety of these foreign investors. This protection gives a competitive

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leverage to these foreign investors when market failure is apparent because investors are able to
generate high positive excess returns over a significant time frame.

2. Protection for Institutional Investors:

Bangladesh government is more concerned about protecting the institutional investors (e.g.,
commercial banks, insurance companies) than about individual small-scale investors. Because
institutional investors are actually managing their investment generated by deposits/premiums of
thousands of small-scale individual investors, the government gives the top priority while
protecting investors from massive market failure. In the most recent market crash in 2008,
Bangladesh Government protected the commercial banks by offering them opportunities for safe
liquidation of assets from the capital market.
3. Government Facilitation:

Foreign hedge/frontier funds want to have a long-term exposure to the capital market of
Bangladesh. From that perspective, foreign hedge/frontier funds are more important than
individual small-scale investors who invest from a short-term perspective. The government
facilitates the long-term foreign investors by giving them protection and safe capital
preservation.

4. Frontier market status:

JP Morgan has given a Frontier Five status to Bangladesh considering its above-average growth
opportunities and potential for higher positive excess return from a long-term perspective.
Bangladesh has also been given an Emerging Eleven status in another research report published
by Goldman Sachs.

5. High Return and Growth:

The fact is globally investors now have very limited opportunities to earn high positive excess
returns by investing in assets belonging to the developed countries around the world. This is why
investors have a tendency to move their capital into a less structured environment where there
are still opportunities of massive development and returns resulting from that. Bangladesh is
offering that kind of opportunity to the foreign investors.

6. Hedging against Global Risk:

Even when the entire world’s economy faced a recessionary hit in 2008, the capital market of
Bangladesh was still in a robust growth state. In fact, the market was at that time becoming a bull
market. This fact proves that the Bangladeshi capital market can be a better hedging investment
location for the global investors because even when the world is in recession, Bangladesh offers
sizable opportunities of growth.

3.19.2 Weakness:
1. High Volatility:

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The major weakness of the capital market of Bangladesh is its sensitivity to high unpredictability
of returns. High volatility also means that investors will be entitled to high returns also. But it
has been evident from the recent market failure that the risk profile of Bangladesh is quite high.
This high risk often makes the investor base vulnerable to massive losses. The fact is also
concerning when the loss has to be borne by investors who invest in the market for the first time
or who is not responsible for any market bubble.

2. Lack of Expert Manpower:

There is a lack of qualified and resourceful human capital base. In most of the companies
operating in the capital market, there are no efficient bases of human capital for which operation
of the entire market is often inefficient and depends on rumor news. Besides, lack of expert
manpower also means that investors will not be able to get quality and relevant information
about the capital market in time. There also arises another problem when investors want some
advisory or consultancy services from the manpower concerned.

3. Lack of Equity Research:

The market is not driven by research knowledge. So, equity firm employees are not encouraged
to do relevant research on the listed securities. This is the primary reason for which the
employees working in equity firms cannot deliver the investors with investment ideas from a
long-term perspective. Fear exists among those investment employees that if they give some
long-term advice about investing in a security to the clients and after that the price of that
security falls, the clients might think that they are not capable of handling advisory role
successfully.

4. Insider Information and Insider Trading:

The entire market is said to be driven by insider information and insider trading. Employees
working in the equity firms are said to be involved with insider trading as they have adequate
prior knowledge and ideas of different press releases. These sorts of prior information have made
them able to able to front-run general investors by buying or selling securities much ahead of the
investors.

5. Manipulation by Institutional Investors:

Recently, the merchant banks have been blamed by experts from all corners as they have
involved in massive-scale market manipulation. These merchant banks have artificially
manipulated the market in favor of their institutional investors by Omnibus accounts which
cannot be tracked by SEC on an account-by-account basis. Other sorts of market manipulation
(e.g., block trading) are also responsible for sudden rise or fall in particular securities. Asset
management firms sometimes artificially inflate the share price by issuing bonus/right shares
which have no economic reason to justify.

6. Syndication:

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It has recently been reported in some dailies that institutional investors form syndication with
equity firms so that the former can get the competitive advantage over retail investors. This
unequal status of investors all through the market has prompted further market inefficiencies in
the market.

7. Herding and Following Practice:

There is no fixed pattern of investment by retail investors as they do not invest from a long-term
perspective. Their short-run investment is triggered by following few large-scale investors who
can control the entire market by controlling the demand and supply situation of securities. Retail
investors primarily follow the existing market pattern. When a particular stock goes down, they
immediately try to liquidate their investment and are thus faced with losses.

8. Day Trading:

Most of the investors are said to be day traders, meaning that they do not invest from a long-term
perspective rather they try to gain profits from day-to-day price movement. This day trading is
primarily responsible for unpredictable movement of the market that happens in DSE.

9. Market Rumor:

Apart from insider information, market rumor has been significantly responsible for the overall
market inefficiency. Retail investors often get trapped into market rumor and try to liquidate
their investment, resulting in a significant amount of loss.

10. Lack of Investor Knowledge:

Most of the investors are not much educated. Lack of investor knowledge about particular
securities and the overall mechanism of the market is responsible for unpredictable market
movements. Because investors do not have sufficient knowledge and expertise, they are not
capable of investing from a long-term perspective and thus they have to depend on their brokers
when an investment decision has to be taken.

11. Lack of Investor Trust:

Excessive market volatility has made many retail investors reluctant to invest in the market for
long. Lack of investor trust is one of the reasons for which the market is now stagnant and less
liquidity has become a persistent problem.

12. Lack of Major Companies’ Reputation:

Investors do not know which equity firms are better capable to serve them and guide them
throughout their investment horizon. In fact, there is not a single equity firm in Bangladesh
which has prohibited their employees from trading on specific securities. For this reason,

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investors are disadvantaged to a high extreme because the employees at equity firms can execute
their own propriety trading far ahead of the investors themselves.
13. Weak Infrastructure:

Bangladesh stock market has not been able to provide an adequate infrastructure base for an
efficient operation of the market. Limited technology use coupled with lack of efficient
manpower has made the overall infrastructure very poor compared to that of other countries. It
has also been reported that the algorithm that is followed to determine DSE index is flawed and
this is why investors sometimes get concerned over price movements which are actually not
significant. It has also been reported that DSE index is not adjusted for splits, bonus shares,
rights shares, repurchases and other market activities effectively.

14. Low Regulatory Oversight:

The SEC is the controlling body of the entire equity capital market of Bangladesh. Till date, the
regulatory oversight that the entity has tried to implement into the system of the market has not
been successful because of massive loopholes and scopes of non-compliance. Besides, frequent
changes in stock market rules and regulations are responsible for further complication of trading
in the market.

15. Unwillingness of Good Companies to be Listed:

The supply of good and quality securities in the market is not high. Till date, most of the
multinational corporations have been away from the stock market. This sort of unwillingness to
be listed in the stock market is a hindrance for the long-term growth of the entire market.

3.19.3 Opportunity
1. Considerable Economic Growth:

Though stated as a third-world economy, Bangladesh has seen a considerable GDP growth (i.e.,
around 5%-6%) in the last couple of years. It will be possible to earn high returns if the overall
capital market can be correlated with the broad economy. This will only be possible if the
investors will make considerable effort to conduct due research for each listed entity before
investment in its shares.

2. Regulatory Effort by the Government:

The government surveillance system is still unable to develop the entire market system.
However, the government is now trying to change the current scenario incorporating the need of
an efficient market structure and adequate market oversight.

3. Positive Future Outlook:

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Goldman Sachs has reported in a seminar that it will come to invest in Bangladesh in 2-3 years
as the future prospect of the country’s stock market and the overall economy looks promising.

4. Growing Base of Investors and Experts:

Because of inability of Bangladeshi citizens to invest in safe investment instruments of other

countries, stock market will be a promising investment haven for investors within the next
decade. Because banking industry is already saturated, investors might look for other investment
opportunities and therefore, there remains a higher possibility that a growing base of investors
will be investing in the capital market in future.

3.19.4 Threats

1. Competition with Other Frontier Markets:

Frontier markets like SriLanka and Pakistan are far ahead of Bangladesh in implementing an
efficient market because of technical as well as human resource base. Bangladesh may not be
able to attract of adequate foreign funds if these other markets look much more profitable in the
long run.

2. Possibility of Further Price Bubble:

The geographic limitation of Bangladesh is one of the major problems that make ways to price
bubbles. Because investors do not have much wide scope for investment, they end up investing
in a concentrated base. This leads the way to price bubble and subsequent market failures. So,
investors might avoid the stock market for a long period of time. Possibility of a price bubble.

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4.1 Recommendations:
Capital market in Bangladesh is now going through a hard time currently as there are some
upheavals in the market and there exists an upsetting condition in the stock markets. But as per
the past occasion, it is evident that our current capital market as a good ground now for future
developments. We should take this opportunity to boost up the market as well as contribute to
our economy. In, addition, our mindset needs to be changed regarding earning profit from the
capital overnight. Foreign investments also need to be increased o ensure a sound capital and
along with this, the government should make an authentic list of the companies that has
credibility and accountability. If we can develop our capital market, it will definitely enhance our
national economy.

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Need to Ensure Quality Research and Analysis:
 Development of quality equity research in the country is yet to match the growth of local
capital markets.
 Quality research increases investor awareness, reducing speculative trading and market
volatility.

Essential to Built Central Co-ordination of Regulators:

Top down co-ordination between Bangladesh Bank, SEC and related bodies would;
-Streamline regulatory processes.
-Reduce time required for quality issuers and new capital markets products to reach market.

Necessary to Institutionalizing of the Capital Market:

We expect to see more institutional investors bringing long term commitment and liquidity to the
market;
- Longer investment horizons reduce market volatility.
- Intuitional investment strategies are fundamental focused rather than speculative.

Ensuring more Companies Listing are Fundamentally Sound, Well-reputed:

With the improvement of corporate governance, we can attract sound corporate to come to
capital market;
- Quality scrip’s provide liquidity and motivation for educated investors to participate in
capital markets.
- Listing of large, reputable corporate attracts foreign investments, increases liquidity.
- Introduction of new scrip’s in different sectors provides investors with broader options.
- Inclusion of well reputed, large cap companies will reduce ability of select “investor
syndicates” to manipulate prices.

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Established Training Center for Investor:
- Conducting training workshop for the investor’s to build public awareness about Capital
Market in the Country.

Flotation of Mutual Funds:

Needed built strong pipeline for listing of mutual funds.
- Provide retail investors with safer, indirect market access, preventing wealth & capital losses.
- Reduces dependency on retail investors, allowing institutions to bring commitment and
stability to the market.
- Bring much needed market stability that only institutional investors can provide.

Need to Encourage of Professional Portfolio Management:

- Institutional investors bring stability through non speculative long term investments.
- Listing of more mutual funds can be a starting point to increasing institutional activity

Reduce Valuation Disparity:

- Education of investors, overall development of capital markets through time can address this
issue.

Needed to Establish of a Formal Debt Market:

- Listing of debt instrument from quality issuers and institutional trading can increase activity.

4.2 CONCLUSION
Thorough various forms of reforms and automation the capital market of Bangladesh won the
confidence of investors from all walks of life. It is a fact that capital market outperformed money
market by far in the last couple of years but that was only possible due to the uniform and state
of the are technology that has been used as the platform of our capital market. In addition to that,
the government facilitated our capital market by structuring its monetary and fiscal policies in a
pro-capital market manner.
Our emerging economy mostly invited the funds form all over the world. Market capital has
shown amazing growth. Although Current market price earnings ratio is higher than that of the

39 | P a g e
neighboring country but it is my belief that considering the demand for lack of avenue to invest,
the capital market of our country has a bright and attractive future and untapped sector.

Developing countries which accounts for 75% of the world's population, have an enduring need
to attract capital and technology to improve their infrastructure and standard of living.
Developing economies, thus, look forward to their capital markets as the engine for future
growth as its existence ensures mobilization of surplus funds to the ones suffering from deficit.
In Bangladesh we have a capital market that is yet to be further nurtured to get the fruit out of it.
Without doing this we cannot undergo heavy industrialization and other capital based
development. We have various problems like the market has been suffering from inadequacy of
good scripts. Out of around three thousands public companies, only two hundred and twenty
have issued securities keeping a large number away from the securities market.
It is further observed that Government is still holding lion portion of many blue chip company
shares. We must overcome this sort of problem to strengthen our capital market. Various
methods and policies may be adapted regarding this, but the investors’ mindset is one of the
most important things that must be changed to ensure the development of the market. If we can
strengthen the market properly, it is only then we can have a sound economy in terms of capital
and related developments in our country.

Bibliography:

1. Financial Markets and Institutions_ by_ Marcia Millon Cornett.

2. Nazimuddin, AZM, an Overview of Bangladesh Capital Market, 2007

3. Annual Report of DSE 2016.

4. Annual Report of CSE 2015.

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3. Annual Report of BSEC 2016

5. Portfolio- A review of Capital Market and National Economy- October 2007

6. Websites-

www.bangladeshstockmarket.com
www.bangladeshbank.org
www.secbd.org
www.dsebd.org
www.csebd.org

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