Army Institute of Business Administration (AIBA) Savar Cantonment, Dhaka-1344

Term Paper on

“Impact on microeconomic and macroeconomic variables on the stock price of

Social Islami Bank Limited (SIBL)”

Prepared for

Kaniz Fatema

Faculty Member

Army Institute of Business Administration (Army IBA), Savar Cantonment. (Affiliated Institute
of Bangladesh University of Professionals)

Prepared by

Shubho Dip Saha ID: B5180B007

Tonmoy Das ID: B5180B011

Farhan Tanvir ID: B5180B016

Maharaj Islam Alif ID: B5180B044

Army Institute of Business Administration (AIBA) Savar Cantonment

Subject Name: Investment Management

Course Title: FIN 4805

Date: September 21, 2021.

 LETTER OF TRANSMITTAL

September 21, 2021

Kaniz Fatema

Faculty Member,

Army Institute of Business Administration (Army IBA), Savar Cantonment.

Subject: Submission of Term Paper

Dear Madam,

This is our privilege to submit the Term Paper entitled “Impact on microeconomic and
macroeconomic variables on the stock price of Social Islami bank Limited (SIBL)". to you. This
is prepared as per the requirement of the course “Course Name: Investment Management” (Course
Code: FIN 4805) of the BBA program.

In this paper, it is briefly discussed that how the research for the Term Paper has been conducted.

We are given all of our sincere effort in the preparation of this Term Paper and will appreciate it
if you suggest any kind of rectification.

Sincerely yours,

Shubho Dip Saha ID: B5180B007

Tonmoy Das ID: B5180B011

Farhan Tanvir ID: B5180B016

Maharaj Islam Alif ID: B5180B044

Batch: BBA-5.

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 ACKNOWLEDGMENT

Firstly, we are especially indebted to Kaniz Fatema, Lecturer, Army Institute of Business
Administration for his valuable counseling towards the improvement of the report. Without his
encouragement, this would have never been possible. We are overwhelmed with gratitude to our
course advisor as he helped us in terms of propulsion and completing this term paper impeccably.

At the time of preparing this term paper, we have gone through different websites which help to
get acquainted with new topic. We are actually focusing on those topics which are important for
me to understand about this subject easily.

We have tried hard to gather all relevant documents regarding this subject. We don’t know how
far we have been able to do that. Furthermore, we don’t claim all the information in this term paper
is included perfectly. There may be shortcoming, mistaken opinion which are all mine and we are
responsible for those but we will try to give a better volume in future.

The report is prepared only to meet academic purpose not for any other reason.

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 Supervisor’s Certificate

This is to certify that the work embodied in the accompanying report entitled “Impact on
microeconomic and macroeconomic variables on the stock price of Social Islami Bank Limited
(SIBL)" has been carried out entirely by the students as a research scholar under my direct
supervision and guideline and the students have fulfilled the requirements of the regulations laid
down for the 8th Semester Final examination of Army Institute of Business Administration.

Kaniz Fatema

Lecturer, Army Institute of Business Administration,

Savar Cantonment, Dhaka.

September 21, 2020

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 Abstract

The aim of the study is to explore the role of the macroeconomic and microeconomics variables
and determine the impact of interest rate, exchange rate, and GDP, and inflation rate on stock
prices in Square. The macroeconomic and microeconomics variables are crucial for any change in
the economy of a country. Any abrupt change among these variables has an impact on the economy
in various ways. In case of any change the regulatory authority takes steps and make amendment
in their policies that would put the economy on the development track. Investment decisions are
highly influenced by macroeconomic variables as changes in macroeconomic and microeconomics
variables affect stock markets differently according to the country's economic conditions and
government policies. The study contributes by determining the effect of various macroeconomic
variables on the stock prices of Square by analyzing the monthly data from 2018 - 2020. The
determination of this study is to investigate the association between the stock market with
macroeconomic and microeconomics factors M2 (Money supply) and BT (Balance of Trade).
Utilize annual time series data from 2018 to 2020. We employ various panel econometric
techniques. The findings confirm that the long-run relationship between variables and
unidirectional causality. The results also reveal that GDP, inflation, exchange rate, interest rate,
and stock prices play an important role in economic development. It is proposed that a study
estimating the long-run impact of the explanatory variables should be taken up to know the full
effect. In short term, all the variables are insignificant except the exchange rate which is negatively
cointegrated with stock prices. The central bank shall be vigilant while changing the money supply
in the market because too much increase in money supply could affect investment as well as the
stock market. The regulator should keep interest rates relatively low to encourage economic
activities, improve the external economic environment through rule-based exchange rate policy
and avoid discretionary measures.

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 Table of Content

Details Sub Topics Page No.

Letter of Transmittal i

Declaration of Student ii
Intro
Acknowledgment iii
Supervisor’s Certificate iv
Executive Summary v

Chapter 1 1.1 Objective of the study 1

1.2 Description of the Company 1-2

Introduction
1.3 History of the Company 2-3
1.4 Limitations of the study 3
1.5 Competitive Environment 3

Chapter 2 6

Methodology of the Study

Chapter 3 4.1 7

4.2 8

4.3 9-10

4.4 Departments of 10
4.5 11
4.6 11-13
4.7 Payment System 14
4.8 Product Availability 14
4.9 Recipes 14
4.10 Refund Policy 15
4.11 SWOT Analysis of 15
4.12 Improvement Plan and Feasibility 15-16
Chapter 4 Conclusion 17

Reference 18

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 CHAPTER 1 INTRODUCTION

1.1 Preface

The present world is the ultimate and definite result of successful trade, finance, and business. To
conduct a successful trading system world is going ahead from time to time. To learn the successful
trade, commerce, and business policy the educational institutions are also not behind. Day by day
they are offering more and more courses to teach the successful business policy deeply.

Generally, by the word ''Bank'' we can easily understand that the financial institution deals with
money. But there are different types of banks like; Central Banks, Commercial Banks, Savings
Banks, Industrial Banks, Investment Banks, Co-operative Banks, etc. However, when we use the
term ''Bank'' without any prefix or qualification, it refers to the ''Commercial Banks''. Commercial
Banks are the primary contributor to the economy of a country. So, we can say Commercial Banks
are the profit-making institutions that hold the deposits of individuals & businesses in checking
and savings accounts and then use these funds to make loans. For this people and the government
is very much dependent on these banks as the financial intermediary. Banks are a profit-earning
concern; they collect a deposit at the lowest possible cost and provide loans and advanced at a
higher cost. The differences between the two are the profit for the bank. The banking sector is
expanding its hand in the different financial events every day. at the same time banking, the process
is becoming faster, easier and the banking arena is becoming wider. As the demand for better
services increases day by day, they are coming with different innovative ideas & products. To
survive in the competitive field of the banking sector, all banking organizations are looking for
better service opportunities to provide their fellow clients. as a result, it has become essential for
every person to have some idea of the bank and banking procedure.

Social Islami Bank Limited (SIBL) is a privately owned bank. SIBL is a second-generation Islami
bank operating since 22 November 1995 based on Shariah Principles. Now SIBL has 101 branches
all over the country with two subsidiaries companies-SIBL Securities Ltd.

And SIBL investment Ltd. The bank opened 10 branches in 2013 to bring more people under the
coverage of banking services.

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1.2 Origin of the Term-Paper

As a part of the Bachelor of Business Administration (BBA) course requirement, it is a program

to introduce the students to real-life business administration. I took the working with Social Islami
Bank Limited which stands as a prominent name in the banking industry. I have chosen to do my
Term paper report titled “Impact on microeconomic and macroeconomic variables on the
stock price of Social Islami Bank Limited (SIBL)" It will increase the knowledge to know the
corporate world and will tend to apply theoretical knowledge in the practical life. I am proud to
work with SIBL and this experience will surely help me in my future career. This advanced
working Paper has been prepared as a part of the BBA Program.

The internship program and the study have the following purposes:

 To get and organize detailed knowledge on the Future responsibility.

 To experience the real business world.
 To fulfill the requirement of the BBA Program.

1.3 Origin of Banking Industry

The English word “Bank” is derived from the Italian word “Banco” which means Bench. The Latin
“bancus” and French word “Banque” means a bench. There is the opinion that the medieval
European bankers (i.e. money changers and money lenders) transacted their banking activities on
the benches in the marketplace. This money-changing and money lending business is known as
the “Banking Business”. The history of Banking is very old; actually, the need of keeping the
surplus of earnings safely created the need for banking activities. So, the concept of Banking was
first established around 2000 BC in Assyria and Babylonia. This concept spread to the Dutch
Republic in the 16th century and the 17th century in London. Various monarchs have established
the necessity of banking in different ways. The banking concept was well-established in the whole
of Europe by the time of Adam Smith. He came along with the “Invisible Hand” theory.
Empowered by his views of a self-regulated company, money lenders and bankers managed to
limit the state’s involvement in the banking sector and the economy as a whole. This free-market
capitalism and competitive banking found fertile ground in the new world, where the United States
of America was getting ready to emerge. At first, the US Banking system was not benefited from
smith’s theory. They only issued banknotes against gold and silver coins. Alexander Hamilton, the

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secretary of treasury established the national bank to direct the issuance of banknotes and maintain
the reserve of the banknotes. Gradually, many banking activities like loans, corporate finance were
transferred at the hand of merchant banks. After World War I U.S. replaced the Europe as the
center of the financial world. World War II created the opportunity to spread banking activities
throughout the whole world. Banks have come a long way from the ancient world, but the basic
business practices have not changed. Now, in the present world, banking activities have come into
our own hands through the blessings of the internet and online activities.

1.4 Islamic Banking in Bangladesh

The interest-based banking system was introduced in Bangladesh when it was the part of British
Colony. During the seventies, the initiative was taken by different bodies to establish the Islamic
Banking system in Bangladesh. Finally, Islamic Banking has been introduced in Bangladesh in
one and half decades alongside traditional banks. At present, the Islamic Banking system has
attracted half of the population throughout the whole country. The First Islamic Banking system
was established by the establishment of “Islami Bank Bangladesh Limited” on 14th Marche, 1983.
The two conventional banks also operate Islamic Banking systems which are Prime Bank Limited
and Dhaka Bank Limited. My Intern organization “Social Islami Bank Limited” is the 4th Islamic
Bank in Bangladesh which was established on 5th July 1995 and went on operation on 22nd
November 1995.

1.5 Objectives of the Report

The objective of this report includes two types of objectives. They are broad objectives and specific
objectives. A broad objective and some specific objectives are included in this report. They are:

Broad Objective

To evaluate the financial performance of Social Islami Bank Limited.

Specific Objectives

The specific objectives of this report are given below:

 To present an overview of SIBL Bank Limited.

 To gather knowledge about the functions and transactions of different departments of the
bank.

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  To be acquainted with how the bank performs its operation.
 To present the principal activities of SIBL Bank Limited.
 To identify the problems of SIBL Bank Limited.
 To suggest remedial measures of development of SIBL Bank Limited.

Scope of the study:

I was assigned to work in every department of the bank in Social Islami Bank Ltd, I have tried to
observe and understand all banking activities especially general banking activities and other day-
to-day functions perform in this SIBL. This report has been prepared through discussion with bank
employees and the clients. Our annual report provided the bank mainly helps to prepare the report.
And also tried to understand the different topics from the bank personnel.

1.6 Methodology

This study is mainly based on secondary data related to E-commerce. Secondary data and
information have been gathered from Internet browsing, Books, Journals, Research papers, etc.
Primary data and information also have been collected through using observation and interview
methods.

Planning

Requirement

Data Collection
Data Analysis

Result

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  Planning: To do the study, we have to make a plan first that how we will collect the data,
what kinds of questioner we should make and what kinds of methods we should choose to
collect those data during this pandemic, etc.
 Requirement: After planning we have to work basis of our planning.
 Data collecting: After planning and requirement, we start working on this term paper and
start collecting data. There is no primary data. We only collect data from secondary
sources. Here we used the internet for gathering information on the topic. All the
information provided on this term paper is from secondary sources, such as various links,
web pages, and some books.
 Data analyzing: After collecting data we start analyzing those data. We eliminate and
process those data for analysis.
 Result: After proper data collecting and analyzing we will get the result and will be able
to make our term paper.

1.7 Data Analysis Technique

For analysis of data, MS Word and MS Excel are used. Parametric and non-parametric statistical
tools such as a table, Line chart, bar chart, and graph have been used to derive a meaningful
conclusion from the empirical data. Mainly data is analyzed based on the time series analysis
technique in this report.

Limitations of the study:

Every study has some limitations. The study I have made is of great importance and required huge
work. Those limiting factors that hampered my smooth workings in the bank and finally in
preparing this report are as follows:

 Lack of practical knowledge: For the lack of practical knowledge some shortcomings
may be available in the report.
 Lack of experiences: There was a lack of experience in collecting information, doing
analysis, and taking assessments of the related topics.
 Lack of proper time: The period of internship study was too short. I have only 55 working
days (almost 8 weeks) to spend in the bank to complete this report. Rush hours and business
was another reason that's act is an obstacle while gathering information.

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  Confidential data: The bank has naturally shown some indifference connecting its most
confidential information. Some desire information could not be collected due to the privacy
of the business.
 Busy professionals: There also had some lack of co-operations. many practical matters
have been written from my observation. the bank's employees are very busy during banking
hours. So, it was difficult to get them in time or acquired information from them.

In many cases, up-to-date information may not be available.

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 CHAPTER 2 LITERATURE REVIEW

Macroeconomic variables affect the performance of the stock market. Investors consider
macroeconomic variables when they value stocks. Interest rates, exchange rate, inflation, GDP are
very important among these macroeconomic variables which affect the performance of the stock
market. A number of studies have been conducted to determine the relationship between the
macroeconomic variable and stock prices in the past. The findings of these studies show that there
is a strong relationship between macroeconomic variable and stock prices. Similarly,
Microeconomic variables affect the performance of the stock market. Investors consider those
variables when they value stocks. EPS, are very important among these macroeconomic variables
which affect the performance of the stock market. Several studies have been undertaken to examine
the collision of macroeconomic and microeconomic variables on stock prices of urbanized and
developing countries. In the past decades, many researchers, financial analysts, and practitioners
have attempted to predict the association between stock markets and macro and micro economic
parameters such as inflation, GDP, ROA, ROE, interest rate etc. They have conducted studies to
establish the outcome of economic variables on stock prices or vice-versa and the results of all
those studies are in different direction.

This module consists of review of literature related with the impact of macro and micro economics
on Social Islami Bank Ltd. Then it analyses the prevailing arguments with stock price and
economic variables affecting acceptance of SIBL stock. Further it provides a critique overview of
variegated studies related with stock price and economic variables. Statistical overview shows that,
there is no significant influence between the stock price of SIBL and the microeconomic variable
while macroeconomic variable showed the same result.

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 CHAPTER-3

3.1 An Overview of Social Islami Bank Limited (SIBL)

Social Islami Bank Limited (SIBL) was incorporated on the 5th July 1995, as a result of dedicated
efforts of a group of established Bangladeshi entrepreneurs and internationally reputed
personalities. The Bank started commercial operation on the 22nd November 1995 and it has since
stepped into 19thyear of its journey. A lot of high-rank able people of the society participated and
were involved with the novel endeavor as sponsored shareholders. Targeting poverty, Social
Islamic Bank Ltd Is needed a concept of 21st century participatory three sector banking model in
one: in the formal sector, it works as an Islamic participatory Commercial Bank with human face
approves to credit package that empowers and humanizes real poor families and create local
income opportunities and discourages internal migration: it is a Development Bank intended to
monetize the voluntary sector and management of WAQF, Masque properties and introducing cash
WAQF system in the history. In the formal corporate sector, this Bank would, among others offer
the most up to date banking service through an opening of various types of deposit and investment
accounts, financing trade, providing letters of guarantee, opening letter of credit, collection of bills,
leasing of equipment, consumers’ durable, hire purchase and installment sale for capital goods,
investment for low-cost housing and management of real estates, participatory investment in
various industry, agriculture, transport, educational and health project.

3.2 Age of Social Islami Bank Ltd:

The Company was incorporated as a Public Limited Company on 22nd November 1995, under the
Companies Act 1994. Now, the bank is running the business for 23 years successfully.

3.3 Mission of SIBL

 High-quality financial services with the latest technology.

 Fast, accurate, and satisfactory customer service.
 Balanced & sustainable growth strategy.
 Optimum return on shareholders’ equity.
 Introducing innovative Islamic banking products.
 Attract and retain high-quality human resources.
 Empowering real poor families and create local income opportunities.

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 Providing support for social benefit organizations-by way of mobilizing funds and
 Social Services.

3.4 Vision of SIBL

In SIBL journey towards continuous excellence, it is striving to become the Country’s leading
Islamic Bank offering one-step service of a wide range of value-added products and services
meeting the needs of its customers; conducting its business ethically under the laws of Shariah
while optimizing best utilization of the most modern state-of-the-art technological solutions
through the creation of a pro-active organizational culture based on sound team spirit, fairness,
mutual understanding, and pragmatic leadership always remain open to new ideas and
adaptable to the best practices in the market ensuring recognition and quality banking
experience to its customers and deliver the best value to all its stakeholders as well.

3.5 Organ gram of SIBL

3.6 Social Islami Bank Ltd Profile:

The SOCIAL ISLAMI BANK LTD (SIBL), a second-generation commercial bank, operating
since 22nd November 1995 based on Shariah' Principles, has now 155 branches all over the

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country with two subsidiary companies - SIBL Securities Ltd. & SIBL Investment Ltd.
Targeting poverty, SOCIAL ISLAMI BANK LTD, is indeed a concept of 21st century
participatory three sector banking model in one. In the formal sector, it works as an Islamic
participatory commercial bank with a human face approach to credit and banking on the profit
and loss sharing. It has a Non- formal banking sector too with informal finance and investment
package that empowers and humanizes real poor family and create local income opportunities
and discourages internal migration. The bank has another sector to monetize the voluntary
sector and management of Waqf, Mosque properties, and has introduced a cash Waqf system
in the history of banking. In the formal corporate sector, this Bank, among others, offers the
most up-to-date banking services through the opening of various types of deposit and
investment accounts, financing trade, providing letters of guarantee, opening letters of credit,
collection of bills, leasing of equipment, and consumers' durable, hire purchase and installment
sale for capital goods, investment in low-cost housing and management of real estates,
participatory investment in various industrial, agricultural, transport, educational and health
projects and so on.

The Bank has taken a renewed drive aiming at consolidating its business in more focused areas
covering SME and Agro-finance with emphasis on searching for the alternative delivery
channel under which SMS banking and mobile-based remittance payment systems and by
gradually introducing the same to disseminate the SIBL services to the doorsteps of the
customers. The Bank has already introduced Internet Banking and launched some new
products to strengthen its business. The products are Sonali Din, Sommridhir Sopan, Sonchoy
Protidin, Swopner Shiri, Shuker Thikana, Sabuj Chhaya, Sabuj Shayanho, Subarnolata,
Subornarekha, Sanchita, etc. and Zameel ATM Debit card.

SIBL is a pioneer in introducing online banking among all the Islami Banks of the country
with state-of-the-art banking software. The state-of-the-art banking software enables the Bank
to provide any branch real-time banking service to the clients. SIBL is supported by core
banking solutions and our products & services are strongly backed by IT infrastructure, which
is upgraded & expanded continuously.

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 SIBL has set its strategy to convert all its banking activities from a traditional branch-based
banking system to an ideal blending of both centralized processing unit (CPU) and effective
operation of the branch that is based on the modern essence of banking.

The Bank is running its payment system successfully through BACPS, BEFTN under BACH
to boost its businesses in multiple dimensions. By adopting BACH System as per guidelines
of Bangladesh Bank, SIBL ensures security, safety, and hassle-free faster transactions from
end to end. Moreover, the Bank is effectively adopting regulatory guidelines on IT risk
management.

SIBL is quite conscious of its social business responsibilities and is always trying to participate
in various social programmed in the country under its CSR portfolio giving special emphasis
on health, habitat & education. The Bank ensures to provide a better-integrated idea of formal,
informal & voluntary banking in the same platform. SIBL has its unique feature to mobilize
capital through CASH WAQF programmed.

SIBL emphasizes employment-generating, environment friendly, and green banking-based

investment keeping an eye on equitable distribution of resources over geographical territory
for sustainable growth of the macroeconomic of the country.

The Corporate Governance system in SIBL ensures transparency and accountability at all
levels in conducting business. The Bank's continuous effort has been to increase the
shareholders' value and to be valued as a compliant organization.

3.7 Financial Highlights:

Entity Growth data information:

(Amount in BDT. Million)

Paid-up Total No of
Year Total Assets No. of Employee
Capital Capital Branch

2000 126.00 126.00 969.82 5 167

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2001 126.00 155.74 2,239.12 10 207

2002 200.00 216.75 4,217.16 12 258

2003 260.00 291.91 5,672.00 14 273

2004 260.00 487.05 11,300.22 15 356

2005 260.00 696.42 16,223.56 19 472

2006 260.00 891.01 21,193.68 24 597

2007 585.00 915.50 21,546.96 24 651

2008 585.00 923.07 20,358.81 24 686

2009 585.00 980.70 19,691.53 24 674

2010 1,119.55 1,665.29 24,546.55 24 674

2011 1,309.88 1,867.36 29,808.88 28 750

2012 2,691.72 3,555.75 39,980.82 52 950

2013 2,987.81 4,198.77 55,168.54 64 1,252

2014 6,393.92 9,590.19 84,365.74 76 1,375

2015 6,393.92 10,181.97 115,165.95 86 1,625

2016 7,031.42 11,083.43 126,616.56 94 1,802

2017 7,031.42 12,143.38 153,737.00 100 1,922

2018 7,031.42 12,950.32 180,112.10 111 2,130

2019 7,382.99 14,187.80 227,704.20 125 2,363

2020 7,382.99 14,166.45 276,348.95 138 2,599

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3.7 Capital Structure:

Equity Capital of Social Islami Bank Ltd. (2016-2020):

Amount Analysis: We can see that the equities have

Year (BDT. Growth (%) increased continuously from 2013 to 2016 and
Million) decrease in the year 2017. This is a good sign of
2016 11,083.43 8.85% Social Islami Bank Ltd. Because equity capital
2017 12,143.38 9.56% has no obligation to pay. As a result, the bank will
2018 12,950.32 6.65% be free from the risk of bankruptcy. On the other
2019 14,187.80 9.56% hand, the dilution of the company has increased
2020 14,166.45 -0.15% because equity investors typically have the right
to vote on important company decisions.

Debt Capital of Social Islami Bank Ltd. (2016-2020):

Amount (BDT. Analysis: Social Islami bank had decreased its

Year Growth (%)
Million) debts capital in 2015. On the chart, we can see the
2016 4,700.00 0.00% difference between taking a loan in 2013 to 2017.
2017 6,150.00 30.85% This indicates that the investment is increasing
2018 1,000.00 -83.74% day by day and the bank is trying to strengthen its
2019 3,000.00 200.00% capital structure. But, in this process, the
2020 5,000.00 66.67% company’s risk has been increased.

Debt-Equity Ratio (2016-2020):

Debt-Equity Analysis: Debt –equity ratio shows from 2016 to

Year Growth (%)
Ratio 2020 it is increasing in Equity Capital in
2016 10.42 1.10% comparison with SIBL total liabilities and is less
2017 11.66 11.86% risker than using debt capital. At present, the
2018 12.91 10.70% Authorized Share Capital of the company is BDT
2019 15.05 16.59% 10,000,000,000 divided into 1,000,000,000
2020 18.51 22.98% ordinary shares of BDT 10 each.

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Corporate Financial Information

Net profit of Social Islami Bank Ltd:

Analysis: A company’s net profit represents how

Net Profit
Year Growth (%) much the company earns money from the
(Million)
investment. Every company’s common goal is to
2016 1,220.20 -15.33% maximize profit. Social Islami Bank is very much
2017 1,903.72 56.02% successful in this way. The profit of the bank is

2018 2,072.59 8.87% increasing day by day. It represents the profitable

position of the bank. From the year 2016 to 2018
2019 2,292.19 10.60%
Net Profit growth but in 2020 Net profit growth
2020 1,455.25 -36.51%
goes down and show regrowth.

Return on Assets of Social Islami Bank Ltd:

Return on Growth Analysis: Return on assets represents after investing the

Year
Assets (%) (%) money a company how much capable of returning the
2016 0.96% -22.99%
2017 1.24% 28.49% investment. The graph chart represents that in 2018 Social
2018 1.15% -7.07% Islami Bank Ltd. had returned their assets more
2019 1.01% -12.52% comparatively from the previous and next three years.
2020 0.53% -47.69%
Return on Equity of Social Islami Bank Ltd:

Return on Growth Analysis: Social Islami Bank Ltd. gave most importance
Year
Assets (%) (%) on return on asset and equity in 2017 to 2018. We can
2016 11.01% -22.22%
2017 15.68% 42.40% easily notice on the graph that in 2019 the company’s
2018 16.00% 2.09% return was most than previous and next years. The bank
2019 16.16% 0.95% should focus much to return their equity.
2020 10.27% -36.42%
If the bank can return their equity more the bank will invest the money in the profitable sector.

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Earnings per Share of Social Islami Bank Ltd:

Analysis: In the modern concept of finance every

Earnings per Growth
Year company’s common goal is to maximize the value of
Share (%)
the share rather than maximizes the profit. Social
2016 1.74 -15.12%
Islami Bank Ltd. is very much successful to increase
2017 2.71 55.75%
the EPS value. The EPS improvement represents that
2018 2.95 8.86% the bank is very much dedicated to its objectives. It
2019 3.10 5.08%
is a good sign for any organization. SIBL's highest
2020 1.97 -36.45%
EPS achieved in 2019 later year it goes down.

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 DATA ANALYSIS

Year Stock price Eps ROA ROE

2020 12.31 1.67 0.43 9.28
2019 13.50 1.71 0.47 15.27
2018 14.28 1.97 1.15 16.16
2017 15 2.71 1.24 15.68
2016 14.56 1.74 0.96 11.01

Impact of Micro Variables

The study is allocated to find out the relationship and effect of EPS, ROA, ROE on the Stock price of
SIBL which have been done for 5-year data from 2016 to 2020. However, linear regression model is run
to find out the relationship of these micro variables for stock prices. There are three independent variables
EPS, ROA, ROE to analyze the effect and relation with the stock price.
Independent Variables- EPS, ROA, ROE.
Dependable Variable- Stock Price
Interpretation of output summary:

Model Summary
Change Statistics
R Adjusted R Std. Error of R Square F Sig. F
Model R Square Square the Estimate Change Change df1 df2 Change
1 .906a .821 .286 .89377 .821 1.533 3 1 .522
a. Predictors: (Constant), Roe, Roa, Eps

Relationship among the variables in relative terms:

Multiple R: 0.906 = This is the correlation coefficient. It represents the degree of relationship.
Here, 0.906 means almost 1 that indicates there exist a high degree of positive relationship among
the variables.

Explanatory power of independent variables:

𝑹𝟐 : 0.821 = It shows how much of the variance of "Y" is explained in the regression. Here, 0.821
indicates 82.1% of variations of earning growth are explained by the variation of number of ROA,
ROE and EPS.

Adjusted R^2: 0.286 = It should be always less than R Square. And here it is.

16 | P a g e
 Coefficientsa
Unstandardized Standardized 95.0% Confidence Interval
Coefficients Coefficients for B
Model B Std. Error Beta t Sig. Lower Bound Upper Bound
1 (Constant) 11.326 2.465 4.595 .136 -19.991 42.642
Eps -.076 1.592 -.031 -.048 .970 -20.301 20.150
Roa 2.308 1.789 .828 1.290 .420 -20.427 25.044
Roe .059 .175 .173 .335 .794 -2.168 2.285
a. Dependent Variable: Stock

 Unit measurement:

The regression model is:

Y=a+b1EPS+b2ROA+b3ROA
Stock price= 11.326 -0.76 x1 +2.308 x2 +0.059x3
The equation indicates that
EPS increased by 1= share value will decrease by .076
ROA increase by 1= share value will increase by 2.308
ROE increases by 1, the Share value will increase by .059

 Influencing power of independent variables:

𝜷 ROA=-.828 > β ROE=.173 > β EPS= -.031

Here shows, ROA has more influencing power than ROE while EPS has negative influencing
power.

 Measuring the significance of coefficient:

T-Value: ROA=1.290, ROE=.794, EPS= -.048

Significance of coefficient: ROA=.420, ROE=.794, EPS=.970

From the co-efficient table, it is evident that the regression co-efficient of ROA, is statistically
significant but ROE and EPS are statistically insignificant because their significant level are higher
than 5%.

 Significance of the result (Through ANOVA table):

Hypothesis Testing:

A hypotheses testing was done to find out the significant effect on stock price of ROA, ROE and
EPS.

17 | P a g e
Ho: There is no significant effect of ROA, ROE and EPS on the Stock price

H1: There is a significant effect of ROA, ROE and EPS on the Stock price

Level of significance α = .05

Decision rule: This test aims to determine the significant effect of independent variables ROA,
ROE and EPS together on the dependent variable stock price to see significant value F. To reject
the null hypothesis, the significance F must be less than .05 or 5%. That means statistically
independent variables affect the dependent variable together. If F is greater than .05 that means
null hypothesis is accepted.
Here, T statistical test basically shows how far the effect of the independent variables on the
dependent variable.

ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 3.675 3 1.225 1.533 .522b
Residual .799 1 .799

Total 4.474 4

a. Dependent Variable: Stock

b. Predictors: (Constant), Roe, Roa, Eps

Significance F: 0.522

Decision: The critical P-Value is 0.05 because the confidence interval is 95% and the calculated
P-value is 0.522. So, Calculated P= 0.522 > Critical P=0.05
So, at 95% confidence interval, the null hypothesis is accepted.
Hence,
The independent variables ROA, ROE and EPS have no significant effect on the dependent
variable stock price.

18 | P a g e
Macroeconomics

Year Stock price GDP rate Interest rate Inflation rate

2020 12.31 2.4 2.639 5.65
2019 13.50 8.2 4.879 5.48
2018 14.28 7.9 3.839 5.78
2017 15 7.3 4.85 5.4
2016 14.56 7.2 4.21 5.37

Impact of Macro Variables

The study is allocated to find out the relationship and effect of GDP rate, interest rate and inflation rate on
the Stock price of SIBL which have been done for 5-year data from 2016 to 2020. However, linear
regression model is run to find out the relationship of these macro variables for stock prices. There are
three independent variables GDP rate, interest rate and inflation rate to analyze the effect and relation
with the stock price.
Independent Variables- Inflation rate, GDP rate, Interest rate
Dependable Variable- Stock Price
Interpretation of output summary:

Model Summary
Change Statistics
R Adjusted R Std. Error of R Square F Sig. F
Model R Square Square the Estimate Change Change df1 df2 Change
1 .812a .660 -.361 1.23378 .660 .646 3 1 .698
a. Predictors: (Constant), Inflation, GDP, Interest

Relationship among the variables in relative terms:

Multiple R: 0.812 = This is the correlation coefficient. It represents the degree of relationship.
Here, 0.812 means almost similar to 1 that indicates there exist a high degree of positive
relationship among the variables.

Explanatory power of independent variables:

𝑹𝟐 : 0.660 = It shows how much of the variance of "Y" is explained in the regression. Here, 0.660
indicates 66.0% of variations of earning growth are explained by the variation of number of
Inflation, GDP, Interest.
Adjusted R^2: -.361 = It should be always less than R Square. And here it is.

19 | P a g e
 Coefficientsa
Unstandardized Standardized 95.0% Confidence Interval for
Coefficients Coefficients B
Model B Std. Error Beta t Sig. Lower Bound Upper Bound
1 (Constant) 27.677 38.458 .720 .603 -460.983 516.338
GDP .459 .723 1.034 .635 .640 -8.722 9.639
Interest -.513 2.287 -.446 -.224 .860 -29.572 28.547
Inflation -2.652 6.160 -.437 -.430 .741 -80.928 75.624
a. Dependent Variable: Stock

Unit measurement:

The regression model is:

Y=a+b1GDP+b2Interest+b3Inflation
Stock price= 27.677+.459x1 -.513x2-2.652x3
The equation indicates that
GDP increased by 1= share value will increase by .459
Interest increase by 1= share value will decrease by .513
Inflation increases by 1, the Share value will decrease by 2.652

 Influencing power of independent variables:

𝜷 GDP=1.034 > β Inflation=-.437 > β interest= - .446

Here shows GDP has more influencing power than inflation on stock price but interest rate and
inflation rate have negative influencing power.

 Measuring the significance of coefficient:

T-Value: GDP= .635, Interest= -.224, Inflation= -.430

Larger t-values translate into smaller P-values. So the larger the t-value is the more likely the
correlation is significant. So for a "critical t-value" is the minimum t-value need in order to have
P < 0.05

Significance of coefficient: GDP=.640, Inflation= .741, interest= .860

From the co-efficient table it is evident that the regression co-efficient of GDP, inflation and
interest are statistically insignificant because there significant level are higher than 5%.

 Significance of the result (Through ANOVA table):

Hypothesis Testing: A hypotheses testing was done to find out the significant effect Stock price
of GDP, Inflation, Interest rate.

20 | P a g e
Ho: There is no significant effect of GDP, Inflation and Interest rate on the Stock price

H1: There is a significant effect of GDP, Inflation and Interest rate on the Stock price.

Level of significance α = .05

Decision rule: This test aims to determine the significant effect of independent variables GDP,
Inflation and Interest rate together on the dependent variable stock price to see significant value F.
To reject the null hypothesis, the significance F must be less than .05 or 5%. That means
statistically independent variables affect the dependent variable together. If F is greater than .05
that means null hypothesis is accepted.
Here, T statistical test basically shows how far the effect of the independent variables on the
dependent variable.

ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 2.951 3 .984 .646 .698b
Residual 1.522 1 1.522

Total 4.474 4

a. Dependent Variable: Stock

b. Predictors: (Constant), Inflation, GDP, Interest

Significance F: 0.698

Decision: The critical P-Value is 0.05 because the confidence interval is 95% and the calculated
P-value is 0.698, So, Calculated P=0.698 > Critical P=0.05
So, at 95% confidence interval, the null hypothesis is Accepted.
Hence,
The independent variables GDP, Inflation and Interest rate have no significant effect on the
dependent variable Stock price.

21 | P a g e
 FINDINGS & SWOT ANALYSIS OF

Social Islami Bank Limited

4.1 Findings

During the course of the undertaken study, several findings have been stumbled upon with which

have been summarized and discussed below:

 Filing is a very important component of proper documentation. It has to be dealt with

importance.
 An uninterrupted network system has to be ensured. It will save the officials from many
hassles and will save time.
 In the credit department, strict supervision is necessary to avoid loan defaulters. Bank
officials should do regular visits to the projects.
 Exercise governance and oversight over the bank's risk rating systems to ensure that they
are fit for purpose and adequately utilized to control risk in the bank.
 Sending money through Social Islami Bank Ltd is an easy and inexpensive process.
 Less involvement of technology and a lot of entries of a single transaction in various
register books make tasks time-consuming.
 A strong position in international Banking and a great link with various foreign exchange
companies makes the process of collecting foreign remittance easier for this bank.
 As one of the leading Banks in Bangladesh, SIBL Bank should provide equal emphasis in
each department of banking service.
 To achieve the goal, a bank must establish and adhere to adequate policies, practices, and
procedures for evaluating the quality of the asset and the adequacy of loan provision and
reserve.
 SIBL do not develop their website for the customers.

4.2 SWOT analysis of SIBL

The comparison of strengths, weaknesses, opportunities, and threats is referred to as a SWOT
analysis. The central purpose of the SWOT analysis is to identify strategies that align, fit, or match
a company’s resources and capabilities to the demands of the environment in which the company
operates. To put it in another way, the purpose of the strategic alternatives generated by a SWOT

22 | P a g e
analysis should be to build on company strengths to exploit opportunities and counter threats and
to correct company weakens. During my internship period in SIBL, I have found some aspects
relating to the Bank’s strengths, opportunities, weaknesses, and threats, which are more or less. I
think affecting the Bank’s performance in total, which are explained below:

STRENGTHS
 Top Management
 Satisfactory asset quality
 Good internal capital generation
 Satisfactory operating efficiency
 Diversified product lines
 Low human resource turnover
WEAKNESS
 No long-term strategies
 Failed to provide a strong quality
recruitment policy in the lower and some
mid-level position
 Service quality of this bank is good but
hot high as the customers’ expectation

 Experienced Management Team  Having a group of unsatisfied employees

 Favorable reputation in the banking industry  Low promotional sector

 Skilled Board of Directors

 High growth rate
 Interactive corporate culture
 Provider of good quality services
OPPORTUNITIES
 Merchant banking or diversify in to leasing
and insurance sector
 Investment in the secondary market
 Opportunity in retail banking
 Expansion of its product line to enhance
sustainable competitive advantage
 Introduction of special corporate scheme for
the corporate customers
THREATS
 The increasing cost of fund
 Increased market competition
 Product Risk
 The default risk of all terms of the loan
 The low compensation package of the
employees from mid-level to a lower-
level position

23 | P a g e
 CONCLUSION

Now a day banking organizations are one of the most vital parts of an economy. SIBL is one of
the financial institutions of Bangladesh that has gained momentum expanding its activities on the
lines of contemporary financial markets. Although financial institution like SIBL is in its infancy
stage as compared to other conventional institutions. Financial institutions have gained good
momentum over a short period. Now banks provide various services for individuals, different
firms, companies even for cultivation. SIBL is running successfully and for its good deposit
performance, the bank occupies 2nd positioning in the Islamic Banking Sector. Taken all in all, it
can be safely said that the SIBL action program is directed towards the development of an authentic
participatory Economy beyond the Market Economy. De-secularizing credit may lead to re-writing
new economics. This bank expresses its sincere thanks to the government of the People’s Republic
of Bangladesh and Bangladesh Bank for their co-operation and valuable guidance to the bank.
SIBL also records its appreciation for the services rendered by the executives and the members of
the staff for the stability and growth of the bank. SIB needs further active support and continued
cooperation of Bangladesh Bank, ministry of finance and other government agencies, executives
and employees of the bank, valued partners, clients, and the community at large in accomplishing
difficult tasks ahead of it.

24 | P a g e
References

1. Social Islami Bank Ltd. Annual Report (2013, 2014, 2015, 2016, 2017,) Dhaka.
2. SIBL Website: http://siblbd.com
3. Different publications of the SIBL.
4. Name Shirin Akter, ID: 120203459, Department of Business Administration, Northern
University Bangladesh.
5. Title of the report: A Study on progress & performance of SIBL.
6. Bangladesh Bank (Baking Supervision and Regulation Department).
i. www.siblbd.com
ii. www.bangladesh-bank.org.bd
7. Name Anirudha Biswas, ID: 09204059, Brac Business School, Brac University.
i. Title of the report: Internship report of SIBL
8. Abeyratna G., Anirut P., and David M. P. (2004) “Macro-economic Influences on the Stock
Market Evidence from an Emerging Market in South Asia” Journal of Emerging Market
Finance, December 2004, 285-304.
9. Cooper, R.V. (1974) “Efficient Capital Markets and the Quantity Theory of Money”,
Journal of Finance, 24, pp. 887-921.
10. Darat, A.F. and Mukherjee T. K. (1987) “The Behaviour of a Stock Market in a Developing
11. Economy”, Economic Letters, 22, 273-278.
12. Afzal, N. and Hossain, S.S. (2011). An empirical Analysis of the Relationship between
Macroeconomic Variables and Stock Prices in Bangladesh. Bangladesh Development
Studies.
13. Ali, M.B. (2011). T-Y Granger Causality between Stock Prices and Macroeconomic
Variables: Evidence from Dhaka Stock Exchange (DSE). European Journal of Business
and Management.
14. BBS (2016), Bangladesh Bureau of statistics, Available at www.bbs.gov.bd/, Accessed on
September 12, 2016.
15. BB (2016), Bangladesh Bank (Central Bank of Bangladesh), Available at
www.bangladesh-bank.org/, Accessed on September 10, 2016.
16. Dhaka Stock Exchange (DSE-2016). Bangladesh, Available at http://www.dsebd.org/,
Accessed on October 31, 2016.

25 | P a g e
Appendix

REGRESSION
/DESCRIPTIVES MEAN STDDEV CORR SIG N
/MISSING LISTWISE
/STATISTICS COEFF OUTS CI(95) R ANOVA CHANGE
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Stock
/METHOD=ENTER Eps Roa Roe.

Regression

Notes
Output Created 19-NOV-2021 23:27:16
Comments
Input Active Dataset DataSet0
Filter <none>
Weight <none>
Split File <none>
N of Rows in Working Data File 5
Missing Value Handling Definition of Missing User-defined missing values
are treated as missing.
Cases Used Statistics are based on cases
with no missing values for any
variable used.
Syntax REGRESSION
/DESCRIPTIVES MEAN
STDDEV CORR SIG N
/MISSING LISTWISE
/STATISTICS COEFF OUTS
CI(95) R ANOVA CHANGE
/CRITERIA=PIN(.05)
POUT(.10)
/NOORIGIN
/DEPENDENT Stock
/METHOD=ENTER Eps Roa
Roe.
Resources Processor Time 00:00:00.02
Elapsed Time 00:00:00.01
Memory Required 3584 bytes

26 | P a g e
 Additional Memory Required 0 bytes
for Residual Plots

[DataSet0]

Descriptive Statistics
Mean Std. Deviation N
Stock 13.9300 1.05754 5
Eps 1.9600 .43520 5
Roa .8500 .37914 5
Roe 13.4800 3.12119 5

Correlations
Stock Eps Roa Roe
Pearson Correlation Stock 1.000 .676 .895 .589
Eps .676 1.000 .740 .550
Roa .895 .740 1.000 .523
Roe .589 .550 .523 1.000
Sig. (1-tailed) Stock . .105 .020 .148
Eps .105 . .077 .168
Roa .020 .077 . .183
Roe .148 .168 .183 .
N Stock 5 5 5 5
Eps 5 5 5 5
Roa 5 5 5 5
Roe 5 5 5 5

Variables Entered/Removeda
Variables
Model Variables Entered Removed Method
b
1 Roe, Roa, Eps . Enter
a. Dependent Variable: Stock
b. All requested variables entered.

27 | P a g e
 Model Summary
Std. Error Change Statistics
Mode R Adjusted R of the R Square F Sig. F
l R Square Square Estimate Change Change df1 df2 Change
a
1 .906 .821 .286 .89377 .821 1.533 3 1 .522
a. Predictors: (Constant), Roe, Roa, Eps

ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 3.675 3 1.225 1.533 .522b
Residual .799 1 .799
Total 4.474 4
a. Dependent Variable: Stock
b. Predictors: (Constant), Roe, Roa, Eps

Coefficientsa
Unstandardized Standardized 95.0% Confidence Interval
Coefficients Coefficients for B
Model B Std. Error Beta t Sig. Lower Bound Upper Bound
1 (Constant) 11.326 2.465 4.595 .136 -19.991 42.642
Eps -.076 1.592 -.031 -.048 .970 -20.301 20.150
Roa 2.308 1.789 .828 1.290 .420 -20.427 25.044
Roe .059 .175 .173 .335 .794 -2.168 2.285
a. Dependent Variable: Stock

REGRESSION
/DESCRIPTIVES MEAN STDDEV CORR SIG N
/MISSING LISTWISE
/STATISTICS COEFF OUTS CI(95) R ANOVA CHANGE
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Stock
/METHOD=ENTER GDP Interest Inflation.

Regression
Notes
Output Created 20-NOV-2021 00:10:40
Comments
Input Active Dataset DataSet0
Filter <none>
Weight <none>

28 | P a g e
 Split File <none>
N of Rows in Working Data File 5
Missing Value Handling Definition of Missing User-defined missing values
are treated as missing.
Cases Used Statistics are based on cases
with no missing values for any
variable used.
Syntax REGRESSION
/DESCRIPTIVES MEAN
STDDEV CORR SIG N
/MISSING LISTWISE
/STATISTICS COEFF OUTS
CI(95) R ANOVA CHANGE
/CRITERIA=PIN(.05)
POUT(.10)
/NOORIGIN
/DEPENDENT Stock
/METHOD=ENTER GDP
Interest Inflation.
Resources Processor Time 00:00:00.03
Elapsed Time 00:00:00.04
Memory Required 3584 bytes
Additional Memory Required 0 bytes
for Residual Plots

Descriptive Statistics
Mean Std. Deviation N
Stock 13.9300 1.05754 5
GDP 6.6000 2.38432 5
Interest 4.0834 .91961 5
Inflation 5.5360 .17444 5

Correlations
Stock GDP Interest Inflation
Pearson Correlation Stock 1.000 .763 .723 -.441
GDP .763 1.000 .870 -.268
Interest .723 .870 1.000 -.614

29 | P a g e
 Inflation -.441 -.268 -.614 1.000
Sig. (1-tailed) Stock . .067 .084 .229
GDP .067 . .027 .331
Interest .084 .027 . .135
Inflation .229 .331 .135 .
N Stock 5 5 5 5
GDP 5 5 5 5
Interest 5 5 5 5
Inflation 5 5 5 5

Variables Entered/Removeda
Variables
Model Variables Entered Removed Method
1 Inflation, GDP, . Enter
b
Interest
a. Dependent Variable: Stock
b. All requested variables entered.

Model Summary
Std. Error of Change Statistics
R Adjusted R the R Square F Sig. F
Model R Square Square Estimate Change Change df1 df2 Change
a
1 .812 .660 -.361 1.23378 .660 .646 3 1 .698
a. Predictors: (Constant), Inflation, GDP, Interest
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 2.951 3 .984 .646 .698b
Residual 1.522 1 1.522
Total 4.474 4
a. Dependent Variable: Stock
b. Predictors: (Constant), Inflation, GDP, Interest

Coefficientsa
Unstandardized Standardized 95.0% Confidence Interval
Coefficients Coefficients for B
Model B Std. Error Beta t Sig. Lower Bound Upper Bound
1 (Constant) 27.677 38.458 .720 .603 -460.983 516.338
GDP .459 .723 1.034 .635 .640 -8.722 9.639

30 | P a g e
 Interest -.513 2.287 -.446 -.224 .860 -29.572 28.547
Inflation -2.652 6.160 -.437 -.430 .741 -80.928 75.624
a. Dependent Variable: Stock

31 | P a g e