UNIVERSITY OF BARISHAL

TOPICS: RESEARCH PROPOSAL

COURSE TITLE : RESEARCH METHODOLOGY

COURSE CODE: AIS 4205

SUBMITTED TO

Abdul Alim Baser ,ACMA

Assistant Professor

Department Of Accounting & Information Systems

University Of Barishal

SUBMITTED BY:

Hasibur Rahman Shanto

Id: 18 AIS 060

Session (admission): 2017-18

Batch 6th

University Of Barishal

Dept. Accounting And Information Systems

Reason Behind Crashing Capital market in
Bangladesh in 2010-11 (DSE)
Introduction:
The term stock market refers to several exchanges in which shares of publicly held
companies are bought and sold. Such financial activities are conducted through formal
exchanges and via over-the-counter (OTC) marketplaces that operate under a defined
set of regulations.Stock market is one of the significant sources for collecting capital
without being leverage.The stock market allows buyers and sellers of securities to meet,
interact, and transact. The markets allow for price discovery for shares of corporations
and serve as a barometer for the overall economy. Buyers and sellers are assured of a
fair price, high degree of liquidity, and transparency as market participants compete in
the open market.

Although, First stock market was seat into motion at London Stock Exchange at a coffee
house (1773) but also it was established in Bangladesh at 1952. Its play a vital role to
gear up our economic growth and sustainability. The Dhaka Stock Exchange (DSE) is
registered as a public limited company under security and exchange commission act
1993 and company act 1994. Earlier Dhaka (East Pakistan) Stock Exchange was
introduced in the early 1952.About 100 people was interested to form an exchange in
the next year July 7, 1953. It was registered under company act 1913. At the time of
incorporation its authorized capital was Rs. 3, 00,000 and divided into 150 shares.
Currently DSE has 512 enlisted companies with a high volume of capital. Major
functions of DSE are; i) Listing of companies, ii) Trading facilities, iii) Market
Administration and Control, iv) Market Surveillance, v) Investors Investment Protections
etc. The objectives of DSE are i) Achieve Sustainable Turnover, ii) Knowledge
Development, iii) Human Resource Development. The vision of DSE is to be a leader
exchange in the region and a key driver of the economy
of Bangladesh. The mission of DSE are; i) Rapid Updated Technological Advancement
and Increase High Standard of Investment Services, ii) Contribute Country’s Economic
Growth and Sustainable Development, iii) Ensure Superior Corporate Governance and
iv) Investors’ Confidence Enhancement,
(DSE & SEC: 2010, Literature Review of Stock Market, Dhaka: SEC”,
www.sec.gov.bd).

The background of this study is to find out the deep-seated causes of the stock market
crash during the year 2010-11 and find the way to prevent the crash in the future. This
section is described about the history , function ,mission ,vision of Dhaka stock
Exchange.

Problem Statement:
This paper will exponent of stock market crash during the year 2010-11. It may help
to the investors about how they can take investment decision . Consequently this paper
also emphasize the negative impact of economic growth during the market
crash.Foreign investors’ behavior is negative towards the market. As a result economic
growth of the country decreases gradually, new industries are not establishing so
unemployment rate increasing day by day.The market is rose in 62% in 2009, further it
rose 83% in 2010.But it declined 10% January 2011 and further 30% in Feb 2011(DSE
Press release ). So we think there are huge number of loss suffer by retail investors ,
We are trying to disclose all of this factors through our research paper.There are also
some previous research papers disclosed but we think this are not enough to disclose
the real cause of market crash.

More specifically, the following research questions need to be addressed:

1. What were the root cause of market crash during 2010-11?

2. Who were responsible for the incident ?

3. Is there are any loophole in regulatory authority ?

4. What should do to preventing future crash ?

5. BSEC rules and guidelines are enough to control the market mechanism ?

6. Is Merchant Banks are fair enough to listing process?

7.

Objectives of the research:

This research paper signifies to ensure the integrity and efficiency of SEC members and
staff and co-ordination between SEC & DSE. Form this study merchant banks will to
realize heavily on capital market by investing directly and indirectly (Margin Loans) that create
high risk to the loan default. This study also focus on the listing process (book building ) and
also provide information is the company capable to listed. In this regard, this will also
emphasizes the fraudulent activity such as :
 1. Manipulation of stock price .

2. Pumping Dumping

3. Inside trading

4. Circular trading

5. Misinformation

Further more by studying this paper investor can build their investment decision and we will
provide some recommendation to development of the market. According to past research paper
(Volume- 29, No-1, Page No.: 1-15, January-June 2018, DOI:
10.5281/ZENODO.3734784) we know that our capital market is only equity base so that
we are also noted our papers that importance of bond and derivatives. We believes SEC
can also use due diligence to fix the current problems and focus on dimensions of stock market
crash in Bangladesh and impression of foreign investors’ of DSE and how to increasing good
impression about foreign and domestics investors about DSE.

Scope of the Study:

The present study is conducted to find out the cause and effect of stock market crash massively
during the year 2010-11 and to know present impression of investors’ in DSE. It has wide
impact of analysis of investors’ satisfaction level and impression towards DSE currently. This
paper focuses to set up rules and regulation for preventing such kind of crash in the future. We
want collect information from broker house BO accounts , and analysis the data from the
renounce broker house . It is analysis wide impact of foreign investors and domestic investors
satisfaction level and opinion currently towards DSE. This paper focus some previous research
gap and provide some guideline to preventing future crash

Research Design:
Convenient sample technique has been used in this study. The target population of this
research was investors in the Dhaka Stock Exchange in all over Bangladeshi and foreign
Investors who were investing as investors since 2007. Among various brokerage houses, this
study only considered 20 enlisted brokerage houses under Dhaka Stock Exchange in
Bangladesh whose 700 investors were considered as population size. This research
emphasizes on quantitative and qualitative data to analyze the cause and effect of stock market
crash during the year 2010-11 in DSE. Specifically statistical tools like Factor Analysis,
regression analysis, z test, mean calculation and proportion analysis (Chandra, Suresh &
Sharma, Mohit Kr. 2011) have been used for examining and analyzing data.5 Point Likert Scale
has been used to collect responses of investors in DSE.
Time schedule:

Gantt Chart
2022 2023

Task name Oct Nov Dec Jan Feb March April May June

Planning

Research

Design

Implementation

Follow up

Budget Of Research :
Items Amount (BDT)

Data collection 300000

Transportation 45000

Residence 25000

Food 30000

Internet 15000

Others 40000

Total 4550000
References:
1. www.dse.org.bd

2. www.sec.gov.bd

3. cpd.org.bd

4. DSE Press Release

5. Volume- 29, No-1, Page No.: 1-15, January-June 2018, DOI:

10.5281/ZENODO.3734784

6. The Daily Stars

7. slam Azizul, “Bangladesh Economist’s Forum, First BEF Conference”, Radisson Blu
Water Garden, Dhaka, 21-22
June, (2014)

8. Ahmed, S. “The monetary transmission mechanism in Bangladesh: Bank lending and

exchange rate channels".https://www.bing.com. (2004).

9. Al-Jafari, Mohamed Khaled. "An Empirical Investigation of the Day-of- the-Week

Effect on Stock Returns and Volatility: Evidence from Muscat Securities Market" ( 2018)

10. Chandra, Suresh, and Mohit Kr Sharma. Research methodology. Alpha Science
International Limited, 2013.

11. Choudhury, Md Ariful Haque. "Stock Market Crash in 2010: An Empirical Study on
Retail Investor's Perception in
Bangladesh." ASA University Review 7, no. 1 (2013).

12. Chowdhury, Neel. "Problems and Prospects of Stock Market in Bangladesh.

Economic
Research". Research.stlouisfed.org. https://research.stlouisfed.org/. (2012)

13. Saha, Sangit. "Stock market crash of Bangladesh in 2010-11: Reasons & roles of
regulators." (2012).