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Capital Market in Bangladesh

ECO-101: Principle of Microeconomics

Section No: 14

Prepared For:
Kazi Abul Bashar
Adjunct Faculty
East West University
Department of Economics

Prepared By:
A.F.M.Ahsan Ullah
Id No: 2007-1-10-015
Department of Business Administration

Date of Submission: April 20, 2011


1.0 Introduction:

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 bye-laws
along with the Securities and Exchange Ordinance, 1969, Companies Act 1994 &
Securities & Exchange Commission Act, 1993.

1.1 Background of Dhaka Stock Exchange:

• East Pakistan Stock Exchange Ltd was finally named as Dhaka Stock Exchange
(DSE) on 14 May 1964.
• Although incorporated in 1954, formal trading started in 1956.
• Prior to independence in 1971, the number of listed companies in DSE was 196
with a total paid up capital of Tk. 4 billion.
• The total number of listed securities is now 378.

1.2 Role of Capital Market:

The primary role of the capital market is to raise long-term funds for governments, banks,
and corporations while providing a platform for the trading of securities. This fund rising
is regulated by the performance of the stock and bond markets within the capital market.

1.3 Policies of Dhaka Stock Exchange (DSE):

• DSE can introduce automate monitoring systems that may control price
manipulation, malpractices and inside trading.
• It can make sure all the listed companies publish their annual reports with actual
and proper information that can ensure the interest of the investors.
• To force the listed companies to declare and pay regular dividends through
conducting Annual General Meeting.
• To make arrangement to set up merchant banks, investment banks and floatation
of more mutual funds particularly in the private sectors.

• More banks, insurance companies and other financial institutions should be

encouraged to deal in share business directly

• The management of DSE should be vested with professionals and should not in
any way be linked with the ownership of stock exchange and other firms.

• To train the investors about fundamentals to deal in share transactions.

• To punish the member brokers for breaching of contract.

2.0 Capital Market of Bangladesh:

Bangladesh capital market is one of the smallest in Asia but the third largest in the south
Asia region. It has two full-fledged automated stock exchanges namely - Dhaka Stock
Exchange (DSE) and Chittagong Stock Exchange(CSE). It also consists of a dedicated
regulator, the Securities and Exchange Commission (SEC), since, it implements rules and
regulations, monitors their implications to operate and develop the capita market.
2.1 Function of Dhaka Stock Exchange (DSE):

• Listing of Companies
• Providing the screen based automated trading of listed Securities
• Settlement of trading
• Granting approval to the transaction
• Market Administration & Control
• Market Surveillance
• More banks, insurance companies and other financial institutions should be
encouraged to deal in share business directly
• The management of DSE should be vested with professionals and should not in
any way be linked with the ownership of stock exchange and other firms.
• To train the investors about fundamentals to deal in share transactions.
• To punish the member brokers for breaching of contract.

The capital market is market for securities, where companies and Governments can raise
long-term funds. It is a market in which money is lent 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 borrowed for medium
and long term and, in cases such as equities, for unspecified periods.
The Primary Market:
• The primary market deals with newly issued securities and is responsible for
generating new long-term capital.
The Secondary Market:
• The secondary market handles the trading of previously-issued securities, and
must remain highly liquid in nature because most of the securities are sold by

2.2 Nature of Dhaka Stock Exchange:

Public Market:
• Only trading of market lot share is done here through automatic matching.
Spot Market:
• Spot transactions are done here through automatic matching which must be settled
within 24 hours.
Block Market:
• A place where bulk quantities of shares are traded through pick and fill basis.
Odd Lot Market:
• Odd lot scripts are traded here based on pick and fill basis.

2.3 DSE Clearing & Settlement Process:

The Clearing and Settlement module provides the management of trade from the point of
entry into the Settlement Pool trade database until it has been delivered, settled and
removed from the Settlement Pool. It consists of three major business processes.

Clearing: Participant trade reporting, affirmation, billing and assigning settlement


Settlement: The process of overseeing that delivery of all instruments to the buyer and
payment of all moneys to the seller has occurred before removing the trade from the
settlement pool.

For “A” Category

For “Z” Category

Here is a complete picture of the settlement system for all of our 427 Instruments in Five
(5) groups in the Four (4) markets.

• A Group: Number of Instruments are 338 (150 + 8D + 22M + 158TB), Here D for
Debentures, M for Mutual funds & TB for Treasury Bonds (Trading in Public,
Block & Odd-lot Market with trade for trade settlement facility for scrip only
through DSE Clearing House on T+1, T+3 basis). "A" and "DA" are marked in
BASES columns for Non-Demat & Demat instrument respectively in our TESA
Trading Software.
• B Group: Number of Instruments are 44(Trading in Public, Block & Odd-lot
Market with trade for trade settlement facility through DSE Clearing House on
T+1, T+3 basis). "B" and "DB" are marked in BASES columns for Non-Demat &
Demat instrument respectively in our TESA Trading software.
• G Group: Number of Instrument is 0 (Trading in Public, Block & Odd-lot Market
with trade for trade settlement facility through DSE Clearing House on T+1, T+3
basis). "G" and "DG" are marked in BASES columns for Non-Demat & Demat
instrument respectively in our TESA Trading software.
• N Group: Number of Instrument is 11(Trading in Public, Block & Odd-lot Market
with trade for trade settlement facility through DSE Clearing House on T+1, T+3
basis). "N" and "DN" are marked in BASES columns for Non-Demat & Demat
instrument respectively in our TESA Trading software.
• Z Group: Number of Instruments are 34(Trading in Public, Block & Odd-lot
Market with trade for trade settlement facility through DSE Clearing House on
T+1, T+9 basis). "Z" and "DZ" are marked in BASES columns for Non-Demat &
Demat instrument respectively in our TESA Trading software.

Here is the summary of Dhaka Stock Exchange Limited in a table format. We can easily
have an idea about the current market scenario.
Main Board as on February 2011
Total Number of Listed Securities 476
Total Number of Companies 229
Total Number of Mutual Funds 33
Total Number of Debentures 8
Total Number of Treasury Bonds 203
Total Number of Corporate Bonds 3

Total number of Shares/Certificates: (No. in mn)

Total Number of Shares & Mutual Fund Certificates of All
Listed Securities*
Total Number of Shares of All Listed Companies 13,268
Total Number of Certificates of All Listed Mutual Funds 2,393
(No. in ' 000)
Total Number of All Listed Debentures 409
Total Number of All Listed Gov. T-Bonds 4,672
Total Numberof All Listed Corporate Bonds 7,336

Total Issued Capital of : (Figure mn) (FigureUS$ in mn)

All Listed Securities 719,316 10,105.59
All Companies Shares 220,543 3,098
All Mutual Funds 23,183 326
All Debentures 140 2
All Listed Govt. T-Bonds 468,113 6,576
All Listed Corporate Bonds 7,336 103

Total Market Capitalization of: (Figure mn) (FigureUS$ in mn)

All Listed Securities 2,349,353 33,006
All Listed Companies Shares 1,843,471 25,899
All Listed Mutual Funds 30,477 428
All Debentures 576 8
All Listed Govt. T-Bonds 468,113 6,576
All Listed Corporate Bonds 6,716 94
Conversion Rate: BDT against USD 71.18

* Total No. of Shares/Share Capital / Market Capital includes Bonus /Right of shares.

2.4 Listing Companies in DSE:

There are several companies which are listed in Dhaka stock exchange ltd. If we divide
those companies into sector wise, we can find the information from the below graph.

The graph is based on the market capitalization of DSE. It reflects that banks hold
maximum capitalization percentage of 29.72%. Financial Institutions come after that
which reflects 13.77% of total market capitalization. Then comes Fuel and Power,
Telecom, Pharmaceuticals, Insurances and Engineering sector.

Investors take different decisions on the base of a sector’s Earning Per Share (EPS), Price
Earning ratio (PE Ratio), Dividend policy, Earnings and some other criteria. The
following table gives us a clear idea about the overall performance of sector wise share in
Dhaka Stock Exchange.

Sectoral Performance - February 2011:

DSE Sectoral Performance - February 2011

Market Capitalisation % of Turnover Tk. in mn % of
Sector in mn total total
February January Market Cap February January Turnover
Financial Sector
Banks 561,617.62 863,038.59 29.72 38,847.87 66,308.47 33.81
Financial Institutions 260,221.58 358,110.22 13.77 19,244.78 25,902.01 16.75
Insurance 102,568.39 159,153.82 5.43 6,064.29 11,614.28 5.28
Mutual Funds 30,476.60 39,774.31 1.61 4,069.48 10,281.43 3.54
Total 954,884.19 1,420,076.95 50.54 68,226.42 114,106.19 59.39
Foods 44,488.99 60,815.97 2.35 1,831.64 3,191.74 1.59
Pharmaceuticals 150,418.71 197,966.28 7.96 4,711.34 8,308.06 4.10
Textile 72,982.86 113,573.28 3.86 8,465.27 15,211.57 7.37
Engineering 89,177.70 142,247.97 4.72 6,833.76 8,150.19 5.95
Ceramics 29,921.39 55,384.39 1.58 2,009.12 3,343.06 1.75
Tannery 11,498.95 15,685.41 0.61 629.03 1,121.21 0.55
Paper & Printing 668.80 1,084.90 0.04 6.35 6.88 0.01
Jute 563.36 880.90 0.03 34.94 45.39 0.03
Cement 43,816.28 66,265.68 2.32 2,012.51 2,973.30 1.75
Total 443,537.05 653,904.79 23.47 26,533.96 42,351.40 23.10
Service & Miscellaneous
Fuel & Power 207,119.69 292,616.55 10.96 8,518.04 12,584.36 7.41
Service & Real Estate 16,242.27 27,113.91 0.86 724.62 1,238.21 0.63
IT 3,140.86 4,643.77 0.17 331.12 527.99 0.29
Telecommunication 188,906.97 320,426.20 10.00 3,547.66 5,053.28 3.09
Travel and Leisure 8,837.65 13,793.65 0.47 2,156.57 4,065.75 1.88
Miscellaneous 60,116.82 81,396.06 3.18 4,721.61 6,959.01 4.11
Total 484,364.26 739,990.14 25.63 19,999.61 30,428.60 17.41
Corporate Bond 6,716.23 3,990.11 0.36 127.11 83.05 0.11
Total 6,716.23 3,990.11 0.36 127.11 83.05 0.11

Grand Total 1,889,501.73 2,817,961.98 100 114,887.10 186,969.24 100

3.0 Last One Year Performance DSE:

The capital market is yet to emerge as an effective investment avenue to most of the
small savers on one hand and attractive avenue for the corporate bodies in raising fund on
the other, especially since the boom and burst of 1996. The negative spillover effect of
the grim capital market performance dampened potential public issue of debt securities.
However, with recent resurgence of the market the appetite for investment grade
securities has again been pronounced that could unleash fresh demand for listed debt

In 2010 capital market experienced huge momentum on the basis of some aspect. In 2010
we have observed the highest trade volume in a single day. We have observed the highest
percentage gain in index in a single day and also we have observed the highest decline
(%) in a single day in the history of capital market. In December’2010 the index reached
to its highest point at 8918.51. From then index started to decline and decline and it
stopped at 5203 index in March’2011.

DSE Performance: March 2010 to February 2011

DSE Turnover Ratio of Index
Value Volume Turnover to
Tk. in mn Nos. mn Market Cap.
Mar-10 175,115.99 747.99 0.08 4,573.81 5,582.33 2,952.01
Apr-10 191,303.18 700.63 0.08 4,641.54 5,654.88 3,039.17
May-10 386,238.36 1,013.99 0.08 5,030.05 6,107.81 3,432.23
Jun-10 387,733.65 1,203.94 0.14 5,111.63 6,153.68 3,650.04
Jul-10 322,769.28 1,163.22 0.11 5,278.89 6,342.76 3,721.78
Aug-10 394,438.07 1,793.43 0.13 5,555.49 6,657.97 3,874.50
Sep-10 312,562.35 1,602.83 0.10 5,930.90 7,097.38 4,137.93
Oct-10 468,008.97 2,265.35 0.14 6,612.14 7,957.12 4,533.18
Nov-10 471,717.20 2,233.33 0.13 7,135.16 8,602.44 5,119.13
Dec-10 387,174.09 2,275.47 0.11 6,877.66 8,290.41 5,204.98
Jan-11 186,969.24 1,442.65 0.06 6,198.82 7,484.23 4,701.74
Feb-11 114,887.12 1,020.38 0.05 4,317.89 5,203.08 3,514.51
Monthly Performance for one year (DSE Performance - February 2011
So we have observed huge fluctuations take place last four or five months due to market
crash at the month of December and so on. On March 10, 2010 DSE General Indez was
on point of 5582.33, on November 10, 2010 it stood at 8602.41 point. Then market
started falling and the index stand now at point of 5203.08 on February 10, 2011.
Graph: Index of last one year for DSI, DGEN and DSE20 Index

4.0 Present Condition of Market:

Market is in bottom line at present. All the share prices stand at reasonable and they are
attractable. If we see the price earning ratio of the companies of different sector, we can
find overall PE is low enough to invest into those shares. The PE ratio is the lowest if we
analysis last five years data of DSE. Today PE of bank sector is 14.13 which was 21.75
last year. So there occurred a huge price correction in the [rice of banking sector shares
and the prices are in bottom line now. The lowest PE ratio is 9.15 for Mutual Fund sector.
Some companies of mutual fund are traded below their face value. So we can easily
determine the correction level of share’s price last five months. Average PE of total
market stands at 17.79 which was 26.66 last year.

Sectoral P/E - February 2011

Sectoral Price Earnings Ratio
Feb-11 Dec-10 Dec-09 Dec-08 Dec-07 Dec-06 Dec-05
Bank 14.13 21.75 16.46 16.33 25.99 16.24 18.24
Financial Institutions 31.50 43.35 32.45 25.26 15.13 7.88 33.83
Mutual Funds 9.15 12.54 29.06 20.37 20.29 6.13 6.55
Engineering 32.08 51.13 36.50 30.24 28.57 17.34 14.14
Food & Allied 18.65 25.46 17.29 16.93 23.28 18.69 9.13
Fuel & Power 14.91 21.16 17.71 15.83 35.95 18.87 22.32
Jute 26.30 42.72 27.23 12.15 7.98 6.74 12.55
Textile 30.08 46.66 32.93 13.85 12.14 12.01 10.08
Pharmaceuticals 25.07 32.83 27.64 30.96 21.05 11.76 10.84
Paper & Printing 67.29 109.15 27.59 9.36 6.23 6.62 4.69
Service & Real estate 23.17 38.68 45.65 22.66 8.82 12.62 8.16
Cement 20.08 30.36 56.90 10.26 12.61 18.53 16.13
IT 38.76 57.31 60.71 46.52 15.25 11.12 10.46
Tannery 14.06 19.08 15.39 16.43 15.38 8.00 10.28
Ceramic 57.89 107.15 39.97 47.80 29.85 14.88 17.06
Insurance 33.87 55.04 31.39 21.81 15.59 10.24 20.87
Telecommunication 11.58 19.64 84.85
Travel and Leisure 47.82 74.64
Miscellaneous 14.47 19.68 28.85 34.43 14.43 11.05 7.83
Market P/E 17.79 26.66 25.65 18.42 23.58 14.51 13.85
Table: Price earning ratio for last five years

5.0 The Market Collapse:

So we have observed a market crash in our capital market which we many didn’t expect
after 1996 turmoil. The 1996 crash of share market not only depleted the market value
and volume of the Dhaka Stock Exchange, it ruined many families, mainly from the
middle class, who were enticed by a few manipulators. When thousands had put in their
last stake, insiders made profit by selling at the pick of value before leaving the market
and siphoned the cash outside the country. This happened while the government was in
full function and regulatory bodies were active. When millions lost their cash and left
with scripts of negligible value, the courts, lawyers, government bodies, human right
groups and the civil society did not seem to care. Despite everything that was said,
nothing happened on the ground, except those who lost remained losers. The subsequent
government also dropped a few crocodile tears and shrugged off the matter.

In 2010 we also experienced the same as 1996. Aggrieved investors set fire to wood and
paper in front of the DSE building and blocked the road from Shapla Chattar to Ittefaq
Moor. They chanted slogans against the top bosses of the premier bourse and market
regulators, and demanded resignation of the central bank governor. Market insiders
blamed the recent fall on the central bank's measures to control the liquidity flow in the
banking system. The central bank also issued another directive asking financial
institutions to adjust their stock investment exposure by December. From January, no
institution will be allowed to invest more than 10 percent of its total liabilities in the stock
market, and the exposure will be calculated based on market price, not cost price.

The International Monetary Fund's prescription to Bangladesh Bank for addressing the
overexposure of commercial banks to the stock market also propelled the unprecedented
fall. The SEC's excessive initiatives to cool the market in a short time are also blamed for
the crash. The measures and unexpected and unnecessary intervention of a donor agency
took a big toll on the market

We can summarize some pin points for this collapse of capital market in 2010-11 in the
following manner:

• Liquidity crisis:
The main reason of downfall of the market I guess is the liquidity crisis. All the banks
and other financial institutions felt that crisis in large scale. For this crisis the money
market situation also performed badly. We have seen the money market interest rate went
upto 150% in a single day. Moreover Bangladesh Bank pressurized the banks to reduce
CRR and SLR rate. So that influenced also to that crisis. As a result huge amount of
funds got out of the market in a short time. It influenced the market strongly to decline in
a large scale.

• Private Bank’s Investment:

Banks play an important role in the whole economy. They are the largest capitalization
companies which are listed in DSE. Many banks were engaged to general banking earlier.
But last few years we have seen many banks are investing the money of their valued
depositors in the stock market to earn earnings besides their operating income. Whereas
banks are supposed to invest 25% of their deposit the banks invested up to 70% of their
investment. This type of investment from banks is for short term but the amount is huge
in size. So when those banks booked their profit, they sold their share in the peak market.
As a result huge amount of fund got out of the market; market lost its capital and it went
in downtrend again.

• Bangladesh Bank Monitoring:

Bangladesh Bank played an important role in the capital market. They are supposed to
monitor the money market whereas they mostly concentrate on the capital market. They
can do that for the betterment of good banking for sure. But they acted like in an
ineffective and inefficient way. When market reached to its peak then they started to
monitor tightly whereas in the early stage they remained silent.

• CRR and SLR Rate:

According to Bangladesh Bank circular, all the private banks were supposed to reduce the
Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) for better liquidity
purpose. Since all the banks invested their big portion in the capital market and they had
to reduce the SLR and CRR rate, so they went for selling their holdings. So market went
in downward.

• SEC Monitoring:
Security Exchange Commission is the regulator of the Bangladesh Capital Market. But
they were failed to do so properly and effectively. In this case we have observed SEC has
lack of efficient manpower to run and monitor two capital markets in the country. SEC
has failed to initiate their authoritarian power effectively and efficiently. When market
went upward and upward, they took various decision to cool the market. But all the
decisions influenced the market to go upward.

• Surveillance of DSE:
The main objective of the Surveillance function of the Exchange is to promote market
integrity in two ways -
• By monitoring price and volume movements (volatility) as well as by detecting
potential market abuses at a nascent stage, with a view to minimizing the ability
of the market participants to influence the price of the scrip/scrips in the absence
of any meaningful information.

• By managing default risk by taking necessary actions timely.

But the surveillance of didn’t work properly for the betterment of the market. When
the price of a company doubled then the surveillance committee asked that company
why price is increasing. But before doubling the price they remained silent. It is found
that many of the members of that committee are involved directly or indirectly with
the market.

• Demutualization:
Dhaka stock exchange has its members, directors, brokers, dealers etc. All the elements
of DSE don’t work separately. So we have seen an individual is a member of DSE; again
he is the stock broker and stock dealer too. So this individual is likely to get benefit from
the market in favor of him/her.

• Ideology of Capital Market:

We know the savers are prone to invest their idle money in the capital market. But in
Bangladesh we have seen in the last year all the people of all stages were running to
invest their valued earned money in the market. They are short term investors of this
market and they wished to get an extra profit or income within a short time. So market
capital went high and high. When market started to fall, these investors got panicked and
sold off their shares. As a result market fall again.

• Merchant Banks are in action:

All the private banks and financial institutions have opened their merchant banking
division in these days. Merchant banks offer margin load to the clients. Some offer 1:1
loan of the equity of a client. If an individual has 1 lac taka he will get another 1 lac and
in total he will be able to invest 2 lac. For margin loan he is supposed to pay interest to
that bank. Merchant banks have to monitor the margin ratio of their clients time to time.
Every bank has its own margin ration benchmark and its own policy to call margin from
the clients. When market was falling and falling, clients’ margin ratio reduced and
reduced. So at one time banks forced their clients to sell their shares to avoid loss of
banks capital. So there was more selling pressure and that influenced the market to go
downtrend more.

• Lack of knowledge of small investor:

Most of the investor of our capital market are small investor. And we have seen many of
them have lack of proper knowledge about the market. They just buy a share to get profit
after 3 days when the shares got matured. But how and why they are supposed to get a
profit they dint know well. So when market goes decline the investors are supposed to
wait and not to sell in loss. But the got panicked and sold off their share in loss even. So
this attitude prolonged the market to go in bearish situation.

• Speculation and Manipulation:

There are lots of rumors in the market always. And our illiterate investors are more prone
to value those rumors. Many of the rumors went wrong. There was wrongly made
speculation and manipulation too. Suppose Eastern Housing Co. (EHL) had a price of tk.
600 in the last month. After one month it is now tk.1000 and there was strong speculation
that it would go to tk.2000 easily. So the investors who bought at 600-700 taka level
didn’t sell EHL. They believed that speculation. But ultimately that didn’t happen. There
was example of manipulation too. A share had a price of tk. 40 only. In a year this price
rose upto tk. 2000 which means that individual share gave maximum 4900% gain in a
single year.

• December closing:
The market crash happened at the end of November and December. It was the time
closing for many of the financial institution. So institutions, who had investments in the
market, started to peg their profit into their bag. So lots of profit taking took place in that
time. It influenced the market to go in the bearish too.
6.0 Problems and Solutions:

6.1 Problem and Limitations of Dhaka Stock Exchange (DSE):

Price Manipulation

• It has been observed that the share values of some profitable companies have been
increased fictitiously some times that hampers the smooth operation of DSE.

Delays of settlement

• Financing procedures and delivery of securities sometimes take an unusual long

time for which the money is blocked for nothing.

Irregular payment dividends

• Some companies do not hold Annual General Meeting and eventually declare
dividends that do not reflect the real or actual financial positions of the company
and ultimately shareholders become confused.

Selection of membership

• Some members being the directors of listed companies of DSE look for their own
interest using the internal information of share market.

Improper Financial Statement

• Many companies of DSE do not focus real position of the company as some audit
firms involve in corruption while preparing financial statements. As a result the
shareholders as well as investors do not have any idea about position of the

Technical problems and political infighting

• The concept of centralization of securities market has not been implemented that
arises technical problems and political infighting.

Lack of skilled manpower

• In DSE as well as financial and non financial institutions involved in the

securities market.

The lack of proper policy

• Absence on framework that provides incentives and protection to investors.

6.2 Suggestions to Improve the Activities of DSE:

• Re-establishment of Security Exchange Commission is highly necessary at this

moment. SEC is supposed to have honest, skilled, knowledgeable, clean imaged

• DSE is composed of 25 member’s board. There are 12 members of stock broker

and 12 of dealers and the rest is chief executive officer. So board members are the
market player and controller as well. So it is easy for them to manipulate market.
So Demutualization is needed now.

• There should be a supportive atmosphere between Dhaka Stock Exchange Ltd

(DSE) and Security Exchange Commission (SEC). Their goal should be the same
to work for the betterment of the market.

• Bangladesh bank should impose bar or circular on the investment criteria for the
private banks and other financial institutions.

• Conducting in-depth investigations based on preliminary enquiries/analysis made

into trading of the scrip. In case of irregularities observed , necessary actions are
initiated or investigation case forwarded to SEC, if necessary through the CEO.

• To force the listed companies to publish their annual reports with actual and
proper information that can ensure the interests of investors.

• To introduce automated monitoring system that may control price manipulation,

malpractices and inside trading.

• There should be a new regulation for the placement business on the eve of pre-
IPO state.

• To introduce full computerized system for settlement of transactions.

• To force the listed companies to declare and pay regular dividends through
conducting Annual General Meeting.

• The department may issue verbal/ written warning to member/s when market
irregularities in the scrip are suspected. The department, through the CEO,
imposes penalty or suspend the member/s who are involved in market
irregularities, based on the input/ evidence available from investigation report.

• To take remedial action against the issues of fake certificates.

• To punish the member brokers for breaching of contract.

• Strengthening market regulation and supervision

• Developing the capital market infrastructure

• Modernizing capital market support facilities

• Increasing the limited supply of securities in the market

• Developing institutional sources of demand for securities in the market and

• Improving policy coordination.

• Liaising with Compliance Officers of companies to obtain comments of the

company on various price sensitive corporate news items appearing in selected
News Papers.

• Comments received from the companies are disseminated to the market by way of
online news bulletin.

• Investigations based on rumor verifications are carried out, if required, to detect

cases of suspected insider trading

7.0 Conclusion:

The market is still struggling to be stable. Market is trying to recover from its bearish
mood but we have observed still much confusion, lack of cooperation among the
government, DSE members, and regulators. All are waiting for a stable market so that
investors get confidence to put their valued money in this market. I think it is the high
time government should sit with all the elements of capital market and take proper steps
to stabilize the market for the greatest interest of the small investors as we know they are
heart of this market.
8.0 Reference:

2 Annual report of Dhaka Stock Exchange Ltd