Ssa BANGLADESH STOCK MARKET PRESENTATION BY: IMPACT GROUPUnregistered version WY¥EFAP IS Av SPO EC KAvert.com The word stock simply refers to a supply .In the financial world, “stock” simply means a supply of money a company has raised from individuals or other organizations. [f any one buys a stock, then he/she owns a part of a company. This part is called a “share.” People who own stock are referred to as "shareholders or "stockholders. “Unregistered GaRiqnipiPces register ye Ror pot tenga gem « Actually stock market is one of the most important financial institutions of any economy as well as Bangladesh .Stock market is nothing but , an equity market in which shares are issued and traded either through exchanges or over the counter marketsPnrects tater i NT PERI E EPI NMEe A HeH SPE Ree The joumey of Bangladesh stock market started on April 28,1954 as East Pakistan stock exchange association Lid. Buttrading on this market started in 1956. The exchange was renamed on June 23, 1964 as Dhaka stock exchange (DSE)Unrecisto,er Jere ep SEE RC RE ENCE] HEMT CRIES! U1 Itis the first and main stock exchange of Bangladesh U1 Itis located at Motijheel in Dhaka LU Tt was incorporated in 1954 U1 Its operation started on May 14, 1964 U1 It is registered as a public Limited company & its activities are regulated by ltsrules & regulations U1 Inthe beginning itused cry-out system to trade U1 Then it installed automated trading system on August 10, 1998Ung RA SPO CCERCTANGE (CONTINUED U0 Its working daysis 5 ina week without Saturday & Sunday U1 Itstrading timeis started from 11.00 am to 15.00 pm(local time) U1 Ithas different investment options foran investors such as - A) Ordinary share B) Debenture C) Bond & mutual funds etc.Unregistered Version, PEGE EOSer) Me Oya Ph ee pyert.com Listing of companies Providing the screen based automated trading of listed securities Market. administration & control Market surveillance Publication ofmonthly review Monitoring the activities of listed companies vwvwYv¥Y¥Y¥ ¥ Announcement of price sensitive or other information about listed companies through onlineUnrecigterer persion Plagss "ear ecm nomenon wet rans It is the second stock exchange of Bangladesh It was incorporated on November 4, 1995 It started its trading through cry-out system Thenit started first automated trading on 2™ June, 1998 It provides intemettrading service on 30‘ May, 2004 Its working days & holidaysare same as like as DSE Ithas four different markets like- See ee ee A) Public market B) Block market C) Spot market & D) Odd lot market Li Trading is done by all these four marketsUnregistergevprginn: PSR ERM EEE. swyersversy There are two types of structure of Bangladesh stock market like- ‘A) Primary market B) Secondary market @ PRIMARY MARKET: Initial public offering(IPO) , new share issuance of a company comes through primary market. SECONDARY MARKET: Sccondary market deals with oxisting securities or previously issued securities. Securities can be sold or bought from this market. This market is also divided according to its different trading characteristics. These characteristics are given below-STRUCTURE OF BANGLADESH STOCK MARKET Unregistered version. PERS ESET NTT MEY i Oy eclinesoam 1. PUBLIC MARKET: Instruments are traded on this market in normal volume which is called lot share. 2 SPOT MARKET: Trading is done in normal volume under corporate actions & must besettled in 24 hours. 3, BLOCK MARKET: In this market bulk volume of instruments arc trades throuph pick &fill basis. 4 ODD LOT MARKET: Odd lots of all instruments are traded through pick écfills in this market. Basically odd lots generated from bonus & rights issues.nregasteress Vera” SSeS TANT CSI OR AM IT SPCAN (SEC) ¥ Ithas been empowered to control stock market ¥ The government of Bangladesh finmnded security & exchange commission on 8° June, 1993 under the security & exchange sion act, 1993. ¥ Its aim isto protect a) Investors interest +b) Improvement of securities market ©) Appropriate issuance of securities 4) Proper guiding of securities laws ¥ It consists ofa chairman & four membersMAIN FUNCTIONS OF SEC: @ Registering & regulating the business operation of DSE,CSE, stock brokers, merchant banks, underwriters and other intermediaries. @ Developing investors education, providing training, for intermediaries, cxccuting market rescarch and publishing those. Controlling every authorized self regulatory organizations Inspecting and controlling fraudulent and unfair trading in security markets Adjusting and investigating of any intermediaries or stock exchanges ¢ ¢ @ @ Collective investment scheme registering & controlling.HOM MARKEY ® Astock market crashis a sudden dramatic decline of siock prices across the sick market, resulting in a significant loss of paper wealth. Simply we ean say stock crash as a rapid and often unanticipated drop of stock prices. » Stockmarket crashes wipe out equity-investment values and are most harmful to those who rely on investment returns for retirement. Well- known U.S. stock market crashes include the market crash of 1929 and Black Monday (1987).Pnresi SSRI RMEATEREE [PRIEA SHES TY BANETADESH CRASHES IN BANGLADESH.Unregistered vars QnA MBER a(Pegig ey FR RRPOTG pdhgarkamgam ® During the crash of 1996 paper shares used to be sold in front of DSE and it ‘was not easy for investorsto indentify fake and original shares. ® There was no automated trading sys-tem, surveillance was not enough strong, and no circuit breakers as well as international protections. ® In 1996 the market experienced dramatic change and pushed the price index up by 337%. DGEN Index recorded high growth from July and stood at 3648.7 points orby 280.5% at DSE as well as CSE also. ® Finally abnormal rise of share prices started to fall and Bangladesh stock market experienced its first crash of the history in 1996. © The cause of stock market crash in 1996 was the failure of market regulators.Unregistered yerRot, IPR Cette OTR scenario of stock market crash in 1996 and crash in 2010-11 are totally different Timeline of historical fall of the crash has been divided into two sections which are December 2010 and January 2011. Due to political unrest of Bangladesh state of emergency was declared and military took power of the country in 2007. According to CPD (2011), the total number of BO Account holders on 20th December, 2010 reached to 3.21 million though the number was 1.25 million in December 2009. Most of these new investors don’t have enough knowledge about the stock market but invest their most or all savings in the market.Unregistered version, please register. www.word-pdft-convertcom ® To minimize the cost of bearing excess liquidity , many financial institutions & its officials as well as other people took loan and invest in the share market. This madea huge influx of liquidity in the share market. ® 5th December, 2010 as the last glorious day of the year for the investors of Bangladesh stock market. On this day DSE General Index (DGEN) gained its all-time highest 8, 918.51 point & broke all old records of DSE tumover by Taka 32.50 billion. ® 19th December was a historical day of the financial year 2010-11 in Bangladesh stock market. On this day DSE witnessed its biggest one day fall in 55 years history. ® On 9th January DSE General (DGEN) Index declined by 600 points & . On 10th January Dhaka Stock Exchange General (DGEN) Index lost by 660 points or 9 percent & Chittagong Stock Exchange Selective (CSE) Index declined by 914 points or 6.8 percent within 50 minutes of trading. ® Ithad broken all previous records of decreasing index.Unregistered vergite plsSbs reycten year pat conmyerpcom « Mainly the crash of 2012 in bangladesh share market occurred due to the highly participation of common uneducated & unexperienced people those who have ever failed to realize “what is ashare & even a share market’? s Banks and other financial institutions including MFs have increased their participation directly n the markets and also through loaning money to BO a/c holders for trading on margins. « The upsurge began when Grameen Phone offered a large IPO (over 4000 crore) « When the index reached 6000 or so from under 3000 journalists asked the finance minister about it and he quickly dismissed that the market was not overheated.nregistered version, please register. www.word-pdtconvert.com C) e The following reasons played the vital role for the crash: Imbalance of demand and supply of shares in DSE & CSE. % Investors didn’t have idea about financial report of listed securities / unfair audit report buy shares based on rumor & without study . Majority of general investors don’t have knowledge about capital market . % Intervention of Bangladesh Bank (central bank). ) Over expectation of general investor . % Liquidity crisis .RIT PRR OASIS TA EMTS PPR PORTARKET ® Therecent condition of Bangladesh Stock Market is gradully developing. Many companies share prices are increasing day by day. Our most respectful Prime Minister Sheikh Hasina declared that during her Awami Govt. they will strongly establish a powerful strategic stock market. ¢ DSE, CSE, SEC & Bangladesh Bank hardly trying to recover the situation. ¢ Theyare taking effective action against the culprits who were responsible for the Market Crash. Investors are becoming more conscious than before. Therenowned economists of Bangladesh hope that within the beginning of 2013, our Stock Market will regain it's previous strategic position.