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On
Global financial crisis & its impact on DSE
Course code:
Submitted to:
Md. Shariful Islam
Lecturer
Department of business administration
Northern University Bangladesh
Submitted by:
Dipock Mondal
Section: A
Submission date:
March30, 2010
Bangladesh is a developing country and globalization integrates us with the global market
in diverse areas. The recent table talks of different formal bodies presumed that
Bangladesh will likely to be equally affected by the global turmoil in the short run as well
as in the long run. It is very difficult to predict the scenario in the long term; however,
short term impacts should duly be taken into consideration.
The year 2009 was a challenging period for the government and the entrepreneurs to
shield the country’s economy from the impact of global economic recession.
From January 1 to December 27 of 2009, the benchmark index of Dhaka Stock Exchange
(DSE) went up by 1,668 points, or 59 percent. Grameenphone, which alone added some
700 points in the indices, backed the jump.
The two bourses of our capital market continue to register their sharp decline for the last
couple of months of 2009. The prime bourse of the country Dhaka Stock Exchange
(DSE) ended with 2228.21 points in 'DSE Index' and 2684.68 points in 'General Index' as
of November 2, 2008.
The trade volume also dwindled and stood at TK. 2490.51 million as on the same day. On
the other hand, the 'CSE Selective Categories Index' went down to stand at 5334.05
points while 'CSE All Share Price Index' to 8233.62 points. However, there is no direct
relationship between the global financial crisis and our capital market as we all know the
foreign investment contribute less than 2.0 per cent of the total equity investment. The
situation is driven by the panic behavior of the market participants which is partially
alleged to be transmitted by some top merchant banks in the form of heavy selling.
Consequently, individual investors are withdrawing their money from the capital market
and bear losses to protect the expected more losses in future. Many of the institutional
investors are capitalizing on the same by taking possession of the lower priced securities.
Instead of being frightened, investors should keep patience in the context of present
market scenario.
Considering all pros and cons, Bangladesh is expected to retain its competitive position in
the global market in days to come. However, it will be dependent on sensible and timely
policy decision which will mostly lie on the government. If we can avail ourselves of the
opportunities and prudently confront the challenges, the global financial crisis will not be
a bane for us rather may turn into a boon.