AN OVERVIEW OF Bangladesh

STOCK MARKET

Project Report
On

AN OVERVIEW OF BANGLADESH
STOCK MARKET
Course Code: BUS498
Submitted To
Dr. Monirul Alam Hossain
Professor & Chairman
Department of Business Administration
East West University

Submitted By
Onickul Haque
ID NO # 2008-1-10-109
Department of Business Administration
East West University
Date of Submission: August 08, 2012

Letter of Transmittal

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August 08, 2012

Dr. Monirul Alam Hossain
Professor & Chairman
Department of Business Administration
East West University.

Subject: Submission of Project Report of BBA program.

Dear Sir,
It is my great pleasure to submit the project report on An Overview of Bangladesh Stock
Market" which is a part of BBA program to you for your consideration.
I made sincere efforts to study related materials, documents, observe the operation and
performance of Stock market and examine relevant records for preparation of the report.
Within the time limit, I have tried my best to compile the relevant information as
comprehensively as possible and if you need any further information, I will be glad to assist
you.
Thanking you,

Onickul Haque
ID# 2008-1-10-109
Department of Business Administration
East West University

Acknowledgement

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At first I would like to thank my Project supervisor Dr. Monirul Alam Hossain from
Department of Business Administration, East West University for providing me such an
opportunity to construct project on An Overview of Bangladesh Stock Market ". Without
his helpful guidance, the completion of this report was unthinkable.
For preparing this report, I have to browse Dhaka Stock Exchange and Securities and
Exchange websites. On the other hand, I have to read some national daily newspapers like
The Financial Express and The Daily Star that help me a lot for collecting information for
preparing the report properly.
During my preparation of the report work I have come to very supportive touch of different
individuals and friends especially Mohammad Moniruzzaman who lend his ideas, time and
caring guidance to amplify the reports contents. I want to convey my heartiest gratitude to
him and others for their valuable responses.

Executive Summary
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The stock market plays various roles in an economy. It acts as an intermediary between
surplus units and deficit units of the economy and facilitates savings into investments. Also
by providing liquidity of these investments, the stock market ensures optimum allocation of
resources. All these activities make it the engine for the growth of the economy. Stock market
in Bangladesh is not yet to play its potential role as a vehicle for financing long term
investment. However, the hangover of an unpalatable historical past which saw a dramatic
plunge in the second half of 1996 and starting of 2011 only to be followed by a drastic
downswing has been successfully trying to overcome.
A number of actions from the regulatory bodies were the main reason of losing public
confidence from the stock market. Frequently changing the policy and poor response of
institutional investors, merchant banks and commercial banks in the crisis period make the
market unstable. It is surprising that "excess liquidity" has suddenly disappeared. It was
available there in the market before demand for shares had exceeded supply thereof. It
resulted into over-heating of the market several weeks back. Overheating of the market did
not happen in one day or one week or one month; it happened during the last several months.
"Shortage of liquidity" has caused the present market crash, with supply of securities far
outstripping demand for the same. But such a shortage of liquidity is the effect of
"overregulation" by Securities and Exchange Commission (SEC), the stock market regulator,
and Bangladesh Bank (BB), the monetary watchdog, due to their not regulating in a right way
it the right time.
This report is emphasizes the present and prospect of stock market in Bangladesh. The report
also focuses stock market in 2010, stock market crash 2011, factors influencing stock market
during the crisis and suggestions to overcome from the recent crisis.

Table of contents
Letter of transmittal

iii

Acknowledgement
Executive summary
1.0 Introduction
1.1
Introduction
1.2
Origin of the Report
1.3
Objectives of the Report
1.4
Scope
1.5
Methodology
1.6
Limitations of the study
2.0 Stock Market Overview
2.1
Stock Market Overview

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01
02
03
03
04
04
05
06
07

2.2

Overview of DSE, CSE and SEC

2.2.1
Overview of DSE
2.2.2
Overview of CSE
2.2.3
Overview of SEC
2.3
Stock Market Index
2.3.1
DSE General Index
2.3.2
DSE All Share Price Index
2.3.3
DSE-20 Index
2.3.4
Total Market Capitalization
2.3.5
Total Traded Value in Taka
2.3.6
Total Number of Trade
2.3.7
Total Trade Volume
2.4
Circuit Breaker and Circuit Filter
2.5
Initial Public Offering
2.6
Stock Market in 2010
2.7
Current Crisis in Stock Market
2.8
Stock Market Crash-2011
2.9
Reasons behind the Stock market Crash 2011
2.10 Stock market is not a place for all
3.0 Factors affecting Bangladesh Stock Market
3.1
Market crash and the role of Bangladesh Bank
3.2
Market crash and the role of Institutional Investors
3.3
Market crash and the role of Merchant Banks
3.4
Market crash and the role of Brokerage Houses
3.5
Stock market crash and Small Investors factor
3.6
Bangladesh Fund to Overcome the Current Crisis
4.0 Problem and prospect of Bangladesh stock market
4.1
The problems of the stock market
4.2
The Prospect of Bangladesh Stock Market
5.0 Suggestion for Bangladesh Stock Market
5.1
Suggestion for Regulatory Bodies of Stock Market
5.2
Some long-term proposals for Individual Investors
6.0 Conclusion
7.0 References

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