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Executive Summery

The stock market is the engine of growth for an economy, and performs a critical role in acting
as an intermediary between savers and companies seeking additional financing for business
expansion. Vibrant capital is likely to support a robust economy. While lending by commercial
banks provides valuable initial support for corporate growth, a developed stock-market is an
important pre-requisite for moving into a more mature growth phase with more sophisticated
conglomerates. Today, with a $67 billion economy and per capita income of roughly $500,
Bangladesh should really focus on improving governance and developing advanced market
products.
Despite a challenging political environment and widespread poverty, Bangladesh has achieved
significant milestones on the social development side. With growth reaching 6.30 percent in
2012, the economy has accelerated to an impressive level. It is noteworthy that the leading global
investment banks, Citi, Goldman Sachs, JP Morgan and Merrill Lynch have all identified
Bangladesh as a key investment opportunity. The Dhaka Stock Exchange Index is at a 10-year
high, however, the capital market in Bangladesh is still underdeveloped, and its development is
imperative for full realization of the country's development potential.
It is encouraging to see that the capital market of Bangladesh is growing, albeit at a slower pace
than many would like, with market development still at a nascent stage. The market has seen a
lot of developments since the inception of the Securities and Exchange Commission (SEC) in
1993. After the bubble burst of 1996, the capital market has attracted a lot more attention,
importance and awareness that have led to the infrastructure we have in the market today.
To enlighten the theoretical aspect of trading policy in the stock market I have gathered
information from the official websites and several books related to the issues regarding the stock
markets in Bangladesh. I have come out with some major findings from the information I got.
Finally, I have focused on making changes in the current trading aspect of the stock market,
which I think will help the stock market to contribute more in the economy of Bangladesh.

Objective of the study

To provide an idea about primary & secondary market in the stock market.

To enlighten the concept of stock exchanges in Bangladesh.

To discuss about the products available in the stock market.

To focus on the trading activities of the stock exchanges.

To give one idea about the steps to be taken by the investors.

To find out some problems in the trading of stock exchanges.

To come out with some suggestions to improve the trading.

Chapter: 02. Historical background


The history of the Dhaka Stock Exchange (DSE) dates back to 1952 when the local government
deemed it necessary to establish a stock exchange because Pakistani shares and securities were
prohibited from being bought or sold on the Calcutta Stock Exchange (CSE). Up until this point,
Pakistan had been trading quite profitably on the CSE and had no need to establish their own
stock exchange department. In response to the prohibition the Provincial Industrial Advisory
Council made the decision to establish a stock exchange in Eastern Pakistan.
Initially it was suggested that instead of creating an independent stock exchange, a branch of the
Karachi Stock Exchange be opened at Dhaka. However this proposal was very unpopular with
representatives from East Pakistan who felt that it was necessary to create a completely new
stock exchange in Dhaka. This is what eventually happened with different members of the stock
exchange purchasing membership cards at the price of RS.2000. There were two proposed
locations for the stock exchange Dhaka and Chittagong but in the end it was decided that
Dhaka was the most suitable location. An organizing committee was established to further set up
the DSE and invitations were sent out to determine what sort of interest there would be in the
proposed stock exchange. The response was overwhelming and on the 7th of July 1953 a
meeting was held with roughly 100 interested persons attending. Of these, eight men were
selected to promote the stock exchange the DSE was officially formed shortly afterwards. The
DSE was moved to its current location in 1959.
Currently the main functions of the Dhaka Stock Exchange are the listing of companies, the
settlement of trading, the providing of a screen based automated trading of listed securities,
market administration, market surveillance, market control, the production of a monthly review
publication, the granting of approval to transactions, the monitoring of activities of listed
companies to ensure that they stay in line with listing regulations, the investigation of grievances,
the announcement of information about listed companies and the maintenance and use of the
investors protection fund.

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