Table of Contents

1. Introduction..............................................................................................................................2
1.1 Origin of the Report:.........................................................................................................2
1.2 Objective of the Report:....................................................................................................2
1.3 Rational for the Study.......................................................................................................3
1.4 Research Methodology:....................................................................................................3
1.5 Limitations of the study....................................................................................................3
2. Literature Review.....................................................................................................................4
3. Overview: DHAKA STOCK EXCHANGE (DSE).................................................................6
3.1 History:..............................................................................................................................6
3.2 Formation:.........................................................................................................................7
3.3 Mission and Vision:..........................................................................................................7
3.4 Functions:..........................................................................................................................7
3.5 Management:.....................................................................................................................8
3.6 DSE as an Organization:...................................................................................................8
3.7 Trading of DSE:................................................................................................................9
3.8 Classification of Securities................................................................................................9
3.9 Share Price Index: DSE Broad Index..............................................................................10
4. Performance of DHAKA STOCK EXCHANGE:..................................................................11
4.1 Average Turnover:..........................................................................................................11
4.2 Average Market Capitalization.......................................................................................14
4.3 Annual Working Days....................................................................................................16
4.4 Average DSE General Index:..........................................................................................18
4.5 No. of securities traded...................................................................................................19
4.6 Top 10 Securities:...........................................................................................................20
4.7 Price Earning (P/E Ratio):...............................................................................................24
5. Findings:.................................................................................................................................35
6. Recommendation:...................................................................................................................35
7. Conclusion:.............................................................................................................................36
8. References:.............................................................................................................................37

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 1. Introduction

The Dhaka Stock Exchange is the prime capital market of Bangladesh. It provides the listed
companies with a channel to seek capital fund from the public and at the same time it provides
the investors a place to buy and sell shares of the listed companies. Throughout the term paper it
was being analyzed how the Dhaka stock exchange is performing based on some aspects like P/E
ratio, turnover ratio, indices and so on. Working with a range of sixteen years of data (2000 –
2016) we have come across certain patterns that can be identified and hence be used to make
proper investments, at the same time we have seen the laws of these patterns being broken.
Countless events of varying importance effect the operation of the stock market.

1.1 Origin of the Report:

The report is covered the overall scenario of Dhaka Stock Exchange. On the basis information
which are found in DSE, the report included market turnover, P/E ratio, top shares, and DSE
general index and so on. Some useful journal, articles and resourceful website are also helped to
provide the required information.

1.2 Objective of the Report:

The prime objective of the study is to study and evaluate the performance of Dhaka Stock
Exchange (DSE). In this regard, the specific relevant objectives of study are as follows:
 Overview of DSE
 Top and bottom performed companies of DSE
 Individual industry analysis
 Different market values
 Ratio analysis
 Risk measurement
 Comparison among the industries
 Share market preview
 Present condition of DSE

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 1.3 Rational for the Study

Dhaka stock exchange plays an important role to the economy. It helps to generate money from
idle segment to productive segment. By moving the fund, DSE creates value of money. Not only
have that, many people of Bangladesh taken investment as their career. The performance of DSE
changes every minutes in the working days. So, DSE is also a great source of employment. But
limited knowledge about DSE hampers people to take full advantage of it. Proper knowledge
about the market and its movement must be acquired by the investors, corporations, regulators as
well as by the academicians. To find out the performance of DSE based on indices and market
P/E and to do a comparison of different sectors based on beta, study is needed. So, it was the
main motivation of the study.

1.4 Research Methodology:

At first we got the report design and structure from our academic supervisor and moved for the
next steps. To prepare this report we had to collect data from both primary and secondary
sources-
i. Primary Data:
 Collection of data from different investors and brokers by asking them related question
 Conversation with the executives & officers of Dhaka stock exchange Ltd.

ii. Secondary Data:

We also collect data from secondary sources. As:
 Daily track of the three indicators of DSE
 Several kind of academic Test-Book.
 Different publications regarding stock exchange function
 Price index
 Through web browsing

1.5 Limitations of the study

This report has some limitation. Moreover the topic is so much vast, so we faced some problems
while p preparing the report. The report is given as an assignment of a course that makes it
narrow prospect. The limitations acquainted with this report are as the following:

4
  Collecting information was little bit tough
 Some calculations those are provided, are wrong
 Time of shortage
 Some critical data is missing
 As a course assignment it gives a narrow prospect

2. Literature Review

The stock of a business entity represents the original capital paid into or invested in the business
by its founders. Stock exchange organize and regulate financial markets where securities like
bonds, notes, shares are bought and sold at prices governed by the forces of demand and supply.
Stock exchanges serve as where primary markets like corporations can raise capital by
channeling savings of the investors into productive ventures and secondary markets where
investors can sell their securities to other investors for cash, thus reducing the risk of investment
and maintaining liquidity in the system. 
(Thomas D Jeithchko, Faculty member, Michigan State University, USA)

The mission of the Stock Market uses provides a forum for publishing new findings on stock
market, financial capital, public market, liquid investments, share prices, exchange trade, stock
exchange, equity market, market economy. Currently our primary research objective is to
encourage and assist the development of better and faster measures of economic activity. In
cases where we believe we can contribute directly, as opposed to through highlighting the work
of others, we are producing our own measures of economic activity. Our work is mainly of
interest to investors, organizations and individuals in the financial sector and to significant
corporations with global operations, as well as governments and academic economists. The stock
market is one of the most important sources for companies to raise money. This allows
businesses to be publicly traded, or raise additional financial capital for expansion by selling
shares of ownership of the company in a public market.
(OMICS International Publications, July 2015 issue)

A stock market is said to be efficient if it fully and correctly reflects all relevant information in
determining security prices. Formally, the market is said to be efficient with respect to some
information set if security prices would be unaffected by revealing that information to all
participants. Efficiency with respect to information set also implies that it is impossible to make
economic profits by trading on the basis of this information
(International Journal of Scientific and Research Publications, Volume 4, Issue 3, March
2014 5 ISSN 2250-3153)

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The main purpose of this study was to explore the causal link between stock market performance
and economic growth in terms of a simple theoretical and empirical literature framework.
Researchers hold diverse opinions regarding the importance of stock markets playing a
significant role in economic growth processes by performing the following functions: improving
liquidity, aggregating and mobilizing capital, observing managers and exerting corporate control,
providing risk-pooling and sharing services including investment levels. The growing theoretical
literature argues that stock markets are crucially linked to economic growth. The findings
suggest a positive relationship between efficient stock markets and economic growth, both in
short run and long run and there is evidence of an indirect transmission mechanism through the
effect of stock market development on investment. They are seen as providing a service that
boosts economic growth. The results are consistent with the theoretical and empirical
predictions.
(International Journal of Economics and Financial issue, Vol 3, No 4, 2013, Author Najib
MH Masoud)

“The stock market of the country was growing at a slow pace at first but there was a large surge
in the stock market in the summer and fall of 1996. According to Mollik and Bepari DSE,
general index grew from 832 in January 1, 1996 to 3567 in November 14. The market eventually
crashed in December of 1996 and the index started to decline significantly since then, with the
index of DSE assuming a value of 507.33 as of November of 1999, resulting in a cumulative
decline of 83.44 percent from 1996 to 1999 with the annual rate of 27.82 percent. "
(Statistical Properties of Daily Returns from the Dhaka Stock Exchange, Author Professor
Abdur R. Chowdhury, Department of Development Study)

Factors such as weak regulation, lack of supervision, lack of market transparency which may
influence the efficiency level of capital market; even recent market scam report also indicate
these factors as vital for stock market crashes
(Burton, 1989)

Stock markets tend to be very efficient in the allocation of capital to its highest-value users.
These markets also help increase savings and investment, which are essential for economic
development. At present, the DSE has a staff consisting of 115 people. The Dhaka Stock “The
Dhaka Stock Exchange (DSE) is registered as a Public Limited Company and its activities are
regulated by its Articles of Association and its own rules, regulations, and by-laws along with the
Securities and Exchange Ordinance, 1969; the Companies Act, 1994; and the Securities and
Exchange Commission Act, 1993 (DSE, 1999). As per the DSE Article 105B, its management is
separated from the Council. The executive power of the DSE is vested with the Chief Executive
Officer (CEO). The CEO is appointed by the Board with the approval of the SEC.”

4
M. Hassan, Kabir, and M. Anisul, “Market efficiency,
Time varyingvolatility and equity returns in
Bangladesh stock market,”2000

“The unexpected rise and fall of share price mostly followed from the general confidence of the
investors about political stability, investment in shares, prospect of quick capital gains,
monopolistic dominance of member brokers, absence of proper application of circuit breaker
etc.”
S. Choudhuri, “Short-run Share Price Behaviour: New
Evidence on Weak Form of Market Efficiency,”

This was the first major crash in the history of Bangladesh stock market. The second one took
place very recently. The problem was initiated in 2009 and the market was unstable throughout
that year. By the end of 2010 it was evident that the market was overheated. The central bank
took a step and wanted to slow things down by controlling liquidity. The mayhem started on
December of 2010. On December 13th the DSE general index (DSEGEN) dropped by 285
points. The second fall was on December 19th which struck even harder. The DSEGEN fell by
551 points in a single day. That was the largest fall in the 55 year history of Dhaka stock
exchange [3]. The market stood at 5500 points on October 2010 compared to 8900 points on the
previous year.
(Wikinvest, 2011)
In Bangladesh, stock markets are moving forward with limited investments and inadequate
supply of capital market instruments (released in Financial Express, Nov, 2007). The market
capitalization is low in Bangladesh. The reasons of low capitalization rate may be due to low
confidence of investors on financial disclosure of companies listed in the stock markets, slow
development of underlying market infrastructure, and lack of strong supervisory system, and
vulnerability in the capital market support system etc.

3. Overview: DHAKA STOCK EXCHANGE (DSE)

3.1 History:
The necessity of establishing a stock exchange in the then East Pakistan was first decided by the
government when, early in 1952, it was learnt that the Calcutta Stock Exchange had prohibited
the transactions in Pakistani shares and securities. The Provincial Industrial Advisory Council of
Pakistan soon thereafter set up an organizing committee for the formation of a stock exchange in

4
East Pakistan. A decisive step was taken in the second meeting of the organizing committee held
on the 13th march, 1953. In the cabinet room, Eden building, under the chairmanship of Mr. A.
Khaleeli, secretary of the government of East Bengal, commerce, labor and industries
department at which various aspects of the issue were discussed in detail. Then the central
government’s proposal regarding the opening a branch of Karachi Stock Exchange at Dhaka did
not find favor with the meeting who felt that East Pakistan should have an independent stock
exchange. It was suggested that Dhaka Narayanganj Chamber of Commerce & Industry should
approach its members for purchasing the membership cards at RS.2000 each for the proposed
stock exchange.

3.2 Formation:
Dhaka Stock Exchange (DSE) is formed and managed under Company Act 1994, Security and
Exchange Commission Act 1993, Security and Exchange Commission Regulation 1994, and
Security Exchange (Inside Trading) regulation 1994. The issued capital of this company is Tk.
500,000, which is divided up to 250, shares each pricing Tk. 2000. No individual or firm can buy
more than one share. According to stock market rule only members can participate in the floor
and can buy shares for himself or his clients. At present it has 230 members. Market
capitalization of the Dhaka Stock Exchange reached nearly $9 billion in September 2007 and
$27.4 billion in Dec 9, 2009.

3.3 Mission and Vision:

The Vision of DSE is:

“To be the leading exchange in the region and a key driver of economic growth with state-of-art
technology and world class service to ensure highest level of confidence among stakeholders.”

To meet the ultimate Vision, the Missions of the DSE are:

 Proactive approach to keep pace with continuous technological advancement, and
providing highest standard of service through efficiency improvement and
introduction of new products.
 Contributing to country’s economic growth through creation of wealth,
facilitating access to capital and penetrating untapped market.
 Superior corporate governance to enhance confidence of investors, regulators,
issuers and intermediaries.

3.4 Functions:

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The major functions are:
 Listing of Companies (As per Listing Regulations).
 Providing the screen based automated trading of listed Securities.
 Settlement of trading (As per Settlement of Transaction Regulations).
 Gifting of share / granting approval to the transaction/transfer of share outside the
trading system of the exchange (As per Listing Regulations 47).
 Market Administration & Control.
 Market Surveillance.
 Publication of Monthly Review.
 Monitoring the activities of listed companies

3.5 Management:

The management and operation of Dhaka Stock Exchange is entrusted on a 25 member’s board
of directors. Among them 12 are elected from DSE members, another 12 are selected from
different trade bodies and relevant organizations. The CEO is the 25th ex officio member of the
board. The following organizations are currently holding positions in DSE Board:
 Bangladesh Bank
 ICB – Investment Corporation of Bangladesh
 President of Institute of Chartered Accountants of Bangladesh
 President of Federation of Bangladesh Chambers of Commerce and Industries
 President of Metropolitan Chambers of Commerce and Industrie
 Professor of Finance Department of Dhaka University
 President of Dhaka Chamber of Commerce & Industry.
3.6 DSE as an Organization:

The Dhaka Stock Exchange (DSE) is incorporated as a Public Limited Company. It is a Self-
Regulatory Organization and its activities are regulated by:
 Articles of Association
 Rules and regulations and bye-laws of the exchange
 Companies Act 1994
 Securities and Exchange Ordinance 1969
 Securities and Exchange Rules 1987

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 3.7 Trading of DSE:

From Sunday through Thursday, Dhaka Stock Exchange is open for trading between 10:30 am –
2:30 pm Bangladesh Standard Time (BST), with the exception of holidays declared by the
Exchange in advance. In the month of Ramadan, the exchange is open for trading between 10:30
am – 1:30 pm BST.

3.8 Classification of Securities

Dhaka Stock Exchange follow some criteria to maintain their securities. Here is a complete
picture of the settlement system for all instruments categories as A, B, G, N and Z which are
traded in DSE.
A-Category Companies:
Companies, which are regular in holding the annual general meetings and have declared dividend
at the rate of ten percent or more in the last English calendar year.

B-Category Companies:
Companies that are regular in holding the annual general meetings but have failed to declare
dividend at least at the rate of ten percent in the last English calendar year.

G-Category Companies:
Green-field companies of which shares are listed with the DSE before the company goes into
commercial operation and prior to listing the said company declares the year of first declaration
of dividend.

N-Category Companies:
Newly listed companies except green-field companies which shall be transferred to other
categories in accordance with their first dividend declaration and respective compliance after
listing of their shares.

Z-Category Companies:

4
Companies which have failed to hold the annual general meeting when due or have failed to
declare any dividend based on annual performance or which are not in operation continuously for
more than six months or whose accumulated loss after adjustment of revenue reserve, if any,
exceeds its paid up capital.

3.9 Share Price Index: DSE Broad Index

In past, there were three types of indices DSE used to calculate the price movement. They
wereDSI (all shares), DGEN (A, B, G and N Category) and DS20.But from 2013, after few
changes in the DSE indices methodology, the Dhaka Stock Exchange presently computes three
indices:

1. DSE Broad Index (DSEX)

2. DSEX Shariah Index (DSES)

3. DSE 30 Index (DS30)

None of the DSE Indices includes mutual funds, debentures and bonds.

DSE Broad Index:

Dhaka Stock Exchange Limited computes DSE Broad Index(DSEX) based on free float shares
and by following S&P, Dow Jones Indices methodology from January 28,2013. Mutual Funds,
debentures and bonds are not considered in the DSEX. The index had a base value of 2951.91
points on January 17,2008. Based on the value, the DSE Broad Index started with 4055.91 points
on January 28,2013 and at the end of the financial yesr 2014-15 it stands at 4583.11 points. At
the end of financial year 2015-16 the index reached at 4507.58 points. In financial year 2015-16
the DSE Broad index decreased by75.53 points or 1.65% and it reached the highest level at
4873.96 points on August 05,2015 and the lowest level at 4171.41 points on May 2, 2016.

DSEX Shariah Index:

The DSEX Shariah Index has been started on January 20,2014. The index is constructed with
ISlamicShariah Complaint listed companies. The Shariah index methodology has been
developed by Standard & Poor’s and supervised by IslamiShariah Board. The index has base
value of 1000 points and the base year was 2011.
On January 20,2014, the DSES commenced with 941.28 points and reached at 1122.03 points at
the end of the 2014-15. At the end of the financial year 2015-16, the DSEX Shariah Index
reached at 1110.83 points by decreasing 1.00%. In financial year 2015-16, the DSEX Shariah

4
Index stood at the highest level at 1207.92 points on August 04,2015 and lowest level at 1020.02
points on May 02,2016.

DSE 30 Index (DS30):

The DSE 30 Index (DS30) was launched on January 28,2013 as an investable index. It has been
constructed by following S&P Dow Jones Indices methodology with 30 leading listed
companies. The base value was 1000 for DS30 index. Based on the base value the DS30 started
with !460.30 points on January 28,2013. The DS30 rose to 1769.37 points at the end of the
financial year 2014-15. At the end of the financial year 2015-16 the index reached at 1770.82
points by increasing 1.45 points or 0.08%. in financial year 2015-16, the DS30 stood at higher
level at 1904.76 points on August 04,2015 and lowest level at 1599.24 points on May 02, 2010.

4. Performance of DHAKA STOCK EXCHANGE:

4.1Average Turnover:

In Value-
The average turnover in value has been calculated by converting the daily turnover in value to
yearly turnover in value using the Pivot table function in MS Excel. The following data is
presented here:
Years Average of value (In Tk.) Growth rate ( In %)

2000
145,904,555.11
2001
149,251,634.29 2%
2002
121,896,834.57 -18%
2003
66,972,434.02 -45%
2004
199,725,637.34 198%
2005
251,409,453.33 26%
2006
285,434,717.16 14%
2007
1,362,308,314.02 377%

4
2008
2,818,416,981.49 107%
2009
6,048,773,305.07 115%
2010
16,449,609,676.95 172%
2011
6,642,977,228.24 -60%
2012
4,206,239,068.49 -37%
2013
4,003,117,980.54 -5%
2014
4,981,687,302.42 24%
2015
4,227,043,595.02 -15%
2016
5,562,297,971.77 32%
Source: Daily turnover data collected from DSE
The average growth rate of total yearly turnover in value is 52.02%

Average of Turnover value (In Tk.)

18,000,000,000.00
16,000,000,000.00
14,000,000,000.00
12,000,000,000.00
10,000,000,000.00
8,000,000,000.00
6,000,000,000.00
4,000,000,000.00
2,000,000,000.00
0.00
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

The above graph shows the DSE growth of turnover in terms of value. The market turnover was
stable during the year 2000 to 2006. After 2006, it started to increase. The indicator went up
steadily in the year 2009 and reached the peak in 2010 because the market was very much
volatile. It again fell during the period between 2011 and 2012 due to the market crash. This
indicator shows that the market suffered in terms of turnover value in the absence of good
securities.

4
In volume-
The average turnover in volume has been calculated by converting the daily turnover in volume
to yearly turnover in value using the Pivot table function in MS Excel. The following data is
presented here:
Years Average of volume Growth rate ( In %)

2000
3,426,694.85
2001
4,148,745.39 21%
2002
4,540,736.69 9%
2003
2,142,479.57 -53%
2004
2,553,323.77 19%
2005
3,421,734.01 34%
2006
3,652,216.22 7%
2007
11,946,137.66 227%
2008
19,431,978.29 63%
2009
32,656,699.32 68%
2010
69,710,407.13 113%
2011
72,235,625.50 4%
2012
91,128,901.21 26%
2013
96,590,445.16 6%
2014
108,924,193.98 13%
2015
106,476,437.09 -2%
2016
165,977,530.60 56%

Source: Daily turnover data collected from DSE

The average growth rate of total yearly turnover in value is 34.57%

4
 Average of Turnover Volume
180,000,000.00
160,000,000.00
140,000,000.00
120,000,000.00
100,000,000.00
80,000,000.00
60,000,000.00
40,000,000.00
20,000,000.00
0.00
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

Here, we can see that over the year turnover volume is increasing. It was the highest in
2016. The market growth in terms of turnover volume is quite good. Increased trading
results in higher turnover volume that increases efficiency. But this indicator did not
reflect the true picture of the market. During the stock market crisis instead of falling, the
turnover volume started to rise. From here we can say that turnover volume does not have
any impact during the pre-market crash period.

4.2Average Market Capitalization

Market capitalization is defined as a measurement of the size of a business enterprise value.

Market capitalization is equal to the share price in secondary market multiplied by the number of
areas outstanding for company XYZ. Capitalization is the therefore the company's worthiness
public opinion. Capitalization cannot give the actual value of a company but rather a market
estimate of a company's value, based on public perceived future prospects, economic and
monetary conditions - and the public is always wrong. The average market capitalization has
been calculated by using by using the Pivot table function of MS excels on the daily data
collected from DSE.

4
Years Average of M.Capitalisation (In Growth rate ( In %)
Tk.)
2000
54,502,132,032.86
2001
63,966,266,676.40 17%
2002
64,931,714,478.27 2%
2003
68,413,642,914.37 5%
2004
141,828,599,503.83 107%
2005
218,813,180,166.75 54%
2006
245,919,950,013.79 12%
2007
506,609,935,474.08 106%
2008
899,870,950,172.97 78%
2009
1,247,062,345,211.15 39%
2010
2,746,722,799,536.24 120%
2011
2,799,631,935,768.82 2%
2012
2,461,739,926,372.64 -12%
2013
2,463,538,140,137.03 0%
2014
3,023,453,856,366.58 23%
2015
3,213,589,983,818.36 6%
2016
3,246,753,321,953.33 1%

Source: Daily market capitalization data collected from DSE

The average growth rate of yearly market capitalization in value is 31.77%

4
 Market Capitalization Growth Rate (%)
1.4

1.2

0.8

0.6

0.4

0.2

0
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
-0.2

The above graph is showing the DSE growth rate in terms of market capitalization over a period
of 16 years. During the period from 2003-04 to 2008-09 both the indicators were very low. The
market capitalization fluctuated very heavily over the year. The growth rate was at the highest in
the 2010 before the market crash. The upward movement of market capitalization growth rate
was not a healthy sign. It has experienced the biggest fall in history during the period between
2011-12. After the crash, the growth of market capitalization became slow. There is some
similarity between the turnover value and the market capitalization. These two indicators went
up almost proportionately during the pre-crash and after crash period. Both of the indicators were
all time in 2010 and indicate the volatility of the market.

4.3Annual Working Days

It represents number of working days in a year at Dhaka Stock Exchange. These yearly working
days has been found by using Pivot table in MS excel.
Years Growth rate ( In %)
Number of working days
2000
277
2001
267 -3.61%
2002
287 7.49%
2003
286 -0.35%
2004
267 -6.64%
2005
258 -3.37%

4
2006
228 -11.63%
2007
237 3.95%
2008
237 0.00%
2009
244 2.95%
2010
244 0.00%
2011
235 -3.69%
2012
238 1.28%
2013
238 0.00%
2014
238 0.00%
2015
244 2.52%
2016
158 -35.25%
Source: Day wise turnover and market capitalization data 2000-2016 from DSE
The average number of working days is 246.

Number of working days

350

300

250

200

150

100

50

0
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

As we can see in the graph the annual number of working days remains somewhat stable
throughout the time from 2000 to 2015 but in 2016 it fell surprisingly. In 2016 it was the lowest
and in 2000 it was the highest.

4
 4.4Average DSE General Index:

The data we have found on DSE General Index was presented day wise. But we have converted
these values into yearly data by calculating the average of each year. These calculations are
presented below:
Years Average DSE General Index Growth Rate ( In %)
2001 819.67
2002 817.64 -0.25%
2003 814.07 -0.44%
2004 1340.23 64.63%
2005 1709.86 27.58%
2006 1501.39 -12.19%
2007 2215.37 47.55%
2008 2,891.04 30.50%
2009 3,000.95 3.80%
2010 6,463.43 115.38%
2011 5,999.75 -7.17%
2012 4,548.16 -24.19%
Source: General Index (2001-2012) data collected from DSE

Average DSE General Index

7000

6000

5000

4000

3000

2000

1000

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

The Graph shows the DSE performance in terms of the DSE General Index movement. We can
say that the index is somewhat stable from 2000 to 2003 and after that it started to increase. In
2009 the index was 3000.95 points and in 2010 it doubled to 6463.43 points leading to the
formation of the bubble. After the bubble burst, the index started to fall down and in 2012 it
became 4546.16 points.

4
 4.5No. of securities traded

It is the number of shares or contracts traded in a security or an entire market during a given
period of time. The Total Number of Securities traded in DSE is presented on the table below:

Years Growth rate ( In %)

Total Number of Securities Traded
2000
949,043,227
2001
107,201,426 -88.70%
2002
1,299,402,408 1112.11%
2003
1,400,094 -99.89%
2004
681,375,804 48566.43%
2005
883,296,421 29.63%
2006
832,680,071 -5.73%
2007
2,831,134,775 240.00%
2008
4,986,024,603 76.11%
2009
7,968,073,412 59.81%
2010
$ 80,652,877 -98.99%
2011
$16,967,148,228 20937.25%
2012
$21,688,678,489 27.83%
2013
22,988,525,949 5.99%
2014
25,996,168,160 13.08%
2015
26,106,074,345 0.42%
Source: Bangladesh Statistics

4
 Total Number of Securities Traded
30,000,000,000

25,000,000,000

20,000,000,000
Total Number of Securities Traded
15,000,000,000

10,000,000,000

5,000,000,000

0
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

As we can see in the graph the total number of securities traded per year started to increase from
2007 to 2009. Then it fell and rose again from 2011 and reached highest in 2015 which was
26,106,074,345 securities.

4.6Top 10 Securities:
Top 10 Securities have been identified using the Trade information 2000-2015 data which was
collected from DSE. These were ranked by using various functions of MS Excel. They are
shown in the tables below:

Table 1: From 2000 to 2004

Ranking 2000 2001 2002 2003 2004
1st AIMS FIRST AIMS FIRST INFORMATIO BEXIMCO AIMS FIRST
GUARANTEED GUARANTEE N SERVICES PHARMAC GUARANTE
MUTUAL FUND. D MUTUAL NETWORK EUTICALS ED MUTUAL
FUND. LTD. LIMITED FUND.

4
2nd BEXIMCO BIONIC SQUARE SQUARE BEXIMCO
PHARMACEUTI SEAFOOD TEXTILES TEXTILES PHARMACE
CALS LIMITED EXPORTS LTD. LTD. UTICALS
LTD. LIMITED

3rd CHICTEX LTD. KEYA AIMS FIRST GACHIHA PADMA

COSMETICS GUARANTEE TA TEXTILE
LTD. D MUTUAL AQUACUL MILLS
FUND. TURE LIMITED
FARMS
LIMITED

4th RANGPUR ROSE BANGLADES ORION AGNI

FOUNDRY LTD. HEAVEN H ONLINE INFUSION SYSTEMS
BALL PEN LTD. LTD. LTD.
LIMITED

5th QUASEM MEGHNA PET BEACH BANGLAD SQUARE

DRYCELLS INDUSTRIES HATCHERY ESH TEXTILES
LIMITED. LTD. LTD. ONLINE LTD.
LTD.

6th BIONIC BEXIMCO RASPIT SHINEPUK BANGLADE

SEAFOOD PHARMACEU DATA UR SH ONLINE
EXPORTS LTD. TICALS MANAGEME HOLDINGS LTD.
LIMITED NT AND LIMITED
TELECOMM
UNICATIONS
LTD.

7th FU-WANG RASPIT DATA MEGHNA SOUTHEA BEACH

FOODS LIMITED MANAGEMEN CONDENSED ST BANK HATCHERY
T AND MILK LIMITED. LTD.
TELECOMMU INDUSTRIES
NICATIONS LTD.
LTD.

8th RASPIT INC (BD) MIRACLE FINE FOODS INTECH FU-WANG

LIMITED INDUSTRIES LIMITED ONLINE FOODS
LIMITED. LIMITED. LIMITED

9th MIRACLE QUASEM GERMAN BDCOM MIRACLE

INDUSTRIES DRYCELLS BANGLA J.V. ONLINE INDUSTRIES
LIMITED. LIMITED. FOOD LTD. LIMITED. LIMITED.

10th SINOBANGLA RASPIT INC MODERN INFORMA INFORMATI

INDUSTRIES (BD) LIMITED CEMENT TION ON
LTD. LIMITED. SERVICES SERVICES
NETWORK NETWORK
LTD. LTD.

4
 Table 2: From 2005 to 2009
Ranking 2005 2006 2007 2008 2009
1st AIMS FIRST AIMS FIRST AIMS FIRST AIMS FIRST AIMS FIRST
GUARANTE GUARANTEE GUARANTEE GUARANTEE GUARANTEE
ED MUTUAL D MUTUAL D MUTUAL D MUTUAL D MUTUAL
FUND. FUND. FUND. FUND. FUND.

2nd PADMA PADMA GRAMEEN BEXIMCO BEXTEX LTD.

TEXTILE TEXTILE MUTUAL PHARMACEU
MILLS MILLS FUND ONE TICALS
LIMITED LIMITED LIMITED
3rd BEXIMCO BEXTEX BEXTEX LTD. KEYA BANGLADES
PHARMACE LTD. COSMETICS H EXPORT
UTICALS LTD. IMPORT
LIMITED COMPANY
LIMITED

4th MIRACLE BEXIMCO LankaBangla BEXTEX LTD. GRAMEEN

INDUSTRIES PHARMACE Finance Ltd. ONE:SCHEME
LIMITED. UTICALS TWO
LIMITED
5th KEYA GRAMEEN BEXIMCO GRAMEEN BEXIMCO
DETERGENT MUTUAL PHARMACEU MUTUAL PHARMACEU
LTD. FUND ONE TICALS FUND ONE TICALS
LIMITED LIMITED

6th KEYA MIRACLE INTECH BANGLADES SHINEPUKUR

COSMETICS INDUSTRIES ONLINE H EXPORT CERAMICS
LTD. LIMITED. LIMITED. IMPORT LIMITED
COMPANY
LIMITED
7th AGNI DIFFODIL AGNI GRAMEEN MAKSONS
SYSTEMS COMPUTERS SYSTEMS ONE:SCHEME SPINNING
LTD. LTD. LTD. TWO MILLS
LIMITED
8th GRAMEEN BANGLADES SQUARE KEYA KEYA
MUTUAL H ONLINE TEXTILES DETERGENT COSMETICS
FUND ONE LTD. LTD. LTD. LTD.

9th INFORMATI KEYA Power Grid Golden Son Ltd. EBL FIRST
ON DETERGENT Company of MUTUAL
SERVICES LTD. Bangladesh Ltd. FUND
NETWORK
LTD.
10th BANGLADE BANGLADES FU-WANG LankaBangla PADMA
SH ONLINE H EXPORT FOODS Finance Ltd. CEMENT LTD.
LTD. IMPORT LIMITED
COMPANY

4
 LIMITED

Table 3: From 2010 to 2015

Ranking 2010 2011 2012 2013 2014 2015
1st BEXTEX AIMS United United BANGLADE United Airways
LTD. FIRST Airways Airways SH EXPORT (BD) Ltd.
GUARAN (BD) Ltd. (BD) Ltd. IMPORT
TEED COMPANY
MUTUAL LIMITED
FUND.
2nd The Premier United R.N. Generation United BANGLADES
Bank Ltd. Airways Spinning Next Airways H EXPORT
(BD) Ltd. Mills Fashions (BD) Ltd. IMPORT
Limited Limited COMPANY
LIMITED
3rd AIMS FIRST SOCIAL NATIONAL R.N. NATIONAL Familytex(BD)
GUARANTE ISLAMI BANK Spinning BANK Ltd.
ED BANK LIMITED. Mills LIMITED.
MUTUAL LIMITED Limited
FUND.
4th SOCIAL BEXTEX UNITED NATIONA AppolloIspat AppolloIspat
ISLAMI LTD. COMMERC L BANK Complex Complex
BANK IAL BANK LIMITED. Limited Limited
LIMITED LIMITED.

5th BANGLADE UNITED SOCIAL UNITED LAFARGE C & A Textiles

SH EXPORT COMMER ISLAMI COMMERC SURMA Limited
IMPORT CIAL BANK IAL BANK CEMENT
COMPANY BANK LIMITED LIMITED. LTD.
LIMITEd LIMITED.
6th EXPORT NATIONA TITAS GAS TALLU SOUTHEAS Generation
IMPORT L BANK TRANSMIS SPINNING T BANK Next Fashions
BANK OF LIMITED. SION & MILLS LIMITED. Limited
BD. LTD. DIST. CO. LIMITED
LTD.
7th TRUST MAKSON LAFARGE Popular Life UNITED NATIONAL
BANK 1ST S SURMA First Mutual COMMERCI BANK
MUTUAL SPINNIN CEMENT Fund AL BANK LIMITED.

4
 FUND. G MILLS LTD. LIMITED.
LIMITED
8th SHINEPUK TRUST KEYA BANGLAD Generation BEXIMCO
UR BANK COSMETIC ESH Next PHARMACEU
CERAMICS 1ST S LTD. EXPORT Fashions TICALS
LIMITED MUTUAL IMPORT Limited LIMITED
FUND. COMPANY
LIMITED
9th IFIC Bank EXPORT BANGLAD Malek MERCANTI Khulna Power
1st Mutual IMPORT ESH Spinning LE BANK Company Ltd.
Fund BANK EXPORT Mills LIMITED
OF BD. IMPORT Limited
LTD. COMPANY
LIMITED

10th MAKSONS Malek Beacon MAKSONS THE CITY ISLAMI BANK

SPINNING Spinning Pharmaceuti SPINNING BANK BANGLADES
MILLS Mills cals Limited MILLS LIMITED. H LIMITED.
LIMITED Limited LIMITED

4.7 Price Earning (P/E Ratio):

P/E of DSE
The Price/Earning ratio of DSE whole market and sector wise is given in the table below:

From the graph we can see that in 2004 the banking industry P/E ratio was boomed and went
much higher than Banking market P/E ratio. After couple of years, from 2010 the market ratio

4
emphasize incredibly. From that year, the market P/E ratio is rapidly increasing till now. The
Market P/E ratio for the bank is higher than Industry P/E. That means from  the year 2010
banking sector became less risky than the market. In That period the market price of the other
securities gone up but the banking industry has got less increase. Because, the demand for loan
became higher and the rate of return also gone up. As the industry PE ratio gone down than the
market PE so the banking sector is underpriced. Investors are normally better off buying a stock
with a low P/E ratio  as they are getting more earnings for their money.

We can see that over the year the cement industry P/E was higher than the market P/E ratio
except 2007 & 2008. Both the P/E ratios were the highest in 2010 because of the formation of
bubble. But the industry ratio was higher than the market ratio. That means in that year the
cement industry was highly overpriced. After the crisis both the ratios fall but the industry ratio
remain higher than the market from the year 2010 to 2016. So, overall we can say that the
cement industry is overpriced and risky compared to the market which seems unfavorable to the
investors.

4
From the graph we can see that the engineering sector P/E ratio was all time higher than the
market P/E. That means the industry is very much volatile and overpriced than the market during
both the pre-crash and post crash period. So the investor will be less likely to invest in this
sector.

Looking at the graph, we can say that the stocks of Financial institutions Industry have been
overpriced for almost all of the time period, that is, the market price of these securities have been
higher than their earning per share in comparison to the market P/E ratio. Investors would be
discouraged to invest in financial institutions Securities, from the period of 2010 till 2015.
However during the year2015, this Industry’s P/E ratio have come closer to the market P/E ratio
indicating a positive sign to the investors.

4
Both the market and food industry P/E are fluctuating over the year. From 2003 to 2004 the
ratio was almost same as the market which reflects that the industry was as risky as the market.
But in 2005 the industry P/E ratio was much higher than the market. That means the stock price
was overvalued that time. After the year P/e ratio fall dramatically and leads to losses. After
that year market P/E ratio was little bit higher than the industry. From the year 2011 to 2016
the industry P/E was higher which is indicating the industry is volatile and the investors will be
discouraged to invest.

Looking at the graph, the market P/E ratio was lower than the industry ratio except 2006 &
2007. That means the ceramic industry was overpriced and riskier than the market. This

4
industry provide low earnings compared to the market value of the stocks. The investors will be
less interested to invest in such stocks which gives lower income than the market.

Over the year the P/E ratios are fluctuating. Before the market crash the industry P/E ratio was
higher than the market indicating the high risk of the industry. Because of the overly priced
stocks investors were less likely to invest in this sector. After the market crash this scenario
reversed and the industry became underpriced and less risky than the market and an attractive
source to invest.

4
The insurance industry P/E was at the peak in 2010 and it was also higher than the market ratio
it is reflecting the overpriced situation. This situation remained for the next three years. During
this period the investors are not so interested in investing in this sector. But after the year
2013, insurance industry overcame this situation and became less risky than the market as the
industry P/E ratio was lower than the market. This is a good sign for both the industry and the
investor.

The above graph is showing that from 2003 to 2007 the industry P/E was lower than the market
and quite attractive to the investors. But from 2008 till 2016 the industry became volatile. In
2009 and 2010 the P/E ratio became more than double. That means the earnings of investors
were very low compared to the investment. That is why this industry became less attractive for
the investor to invest.

4
From the graph we can say that the P/E ratios are very much fluctuating. Most of the year the
jute industry P/E ratio dominates the market ratio. From 2009 the industry ratio was higher
than the market. In 2015 & 2016 it was at its peak and 10 times higher than the market. This is
known as an overpriced situation which is not favorable for the investor. The earnings per share
is extremely low compared to the price per share.

The above graph is indicating that the P/E ratio of mutual fund sector was always lower than
the market which seems very good as it reflects the risk is lower than the overall market. It also
reflects the earning per share is higher compared to the price per share than the market. The

4
P/E ratio was the highest in 2010 but it was not as high as the market. Mutual fund is a
favorable source of investment for the investors.

From the year 2003 to 2008 the paper and printing industry was underpriced as the market
ratios were higher than the market. After 2008 the reverse happened, the industry ratio started
to increase and reached its peak in 2011. In 2012 it fell down but was higher than the market.
So we can say that during the pre-crash period the industry was underpriced which seems
attractive to the investor. Whether during post-crash period the industry performance became
worse and reached to overvalue situation and indicating negative signal to the investor.

4
From 2003 to 2007 the industry and market P/E ratio was nearly same. After that both the
ratios fluctuate over the year but the industry ratio was always higher than the market. That
means this sector was overpriced than its earnings and contains higher risk than the market.
Investor seems to be less interested in this sector.

Before the formation of the bubble real estate sector was underpriced and was very attractive
to the investor because the market ratio was higher than the industry ratio. The performance of
this sector was very good back in 20003 to 2008. From 2009 the industry ratio became greater
than the market and indicating an overvalue situation. If we see carefully after the bubble burst
in 2011 the excessive price fall down but it remained higher than the market. It is depicting the
high volatility of the market. Till 2016 the industry became overpriced but the ratios were
fluctuating. The high volatility and the overvalue situation are indicating negative signals
towards the investor.

4
Over the year some time market dominates the tannery industry and vice versa that means the
ratios were fluctuating. In 2004 industry was very much risky than the market as it is showing
higher ratio value than the market. After that year up to 2010 market ratio dominates the
industry ratio indicating the good performance of the industry. Back then industry was less
volatile than the market. From 2011 to 2013 the industry and market ratio was nearly same.
After 2014 industry again became riskier than the market which is reflecting an overvalue
situation and unfavorable to invest.

The telecommunication industry was always higher than the market PE ratio. It was the highest
in 2010 but fell down sharply in 2011 because of the market crisis. The industry was always

4
overpriced compared to its earning and it is also risky to invest. So it is not that much favorable
to the investor.

From the graph we can say that from 2003 to 2008 the industry condition was good compared
to the market. It was an attractive source of investment as it was less risky than the market. The
industry ratio was the highest in 2010 the industry was very much volatile and the price was
very high compared to earnings. After that the industry ratio fall but it was higher than the
market. The investors are discouraged to invest in that time. From 2014 to 2016 the industry
performance became better and its ratio was lower than the market indicating to a positive
investment decision.

4
The above graph is showing the overall picture of the P/E ratios of both the travel and leisure
industry and the market. The industry was vulnerable in 2011 because its ratio was higher than
the market. Both the ratios of the market and industry fall down in 2012 but the industry ratio
was higher depicting lower earnings compared to the price of the stock. In 2014 the industry
ratio fall down the market ratio and created an undervalue situation. This was very much
favorable to the investors buying decisions. But in 2016 industry ratio again increased and cross
the market ratio depicting an overvalue situation and risky source of investment compared to
the market.

5. Findings:
After analyzing the key indicators (Turnover, Market capitalization, Index and P/E ratio) we
have found-
 Dhaka stock market is volatile and quite risky for the investors as we analyzed the P/E
ratio of the industry and the market.
 The investors of Dhaka stock exchange are not educated enough so thay often make
decision based on the market trend
 Political instability influenced the stock market negatively and as a result investors
suffered a lot
 Some companies declare dividends that do not reflect the real or actual financial position.
 The concept of centralization of securities has not yet been implemented.
 There is a lack of skilled manpower is DSE as well as in financial and non-financial
institutions that are involved in the DSE
 It has been observed that share values of some profitable companies have been increased
factiously sometime that hampers smooth operations of DSE.
 Reliable and unbiased information about capital issue is not available

6. Recommendation:

To improve the condition of DSE we have come up with some recommendations. Such as-
 Introduce automated monitoring system to minimize price manipulation, malpractices
and inside trading
 Introduce full computerized system for transactions
 Forcing the listed companies to arrange annual general meeting regularly and pay
dividends that are appropriate for their financial state.
 Punish members and brokers for breaching of contract and fraudulent behavior.
 Government should control the political unrest strictly.

4
  Unbiased and correct information about capital market should be available on the internet
so that the investor’s confusion reduces.
 Skilled employees should be hired for DSE as well as for other institutions. Their HR
policies need to be rectified.
 Financial institutions should be discouraged to deal with the share business directly.

7. Conclusion:

Bangladesh capital market is one of the smallest in Asia but the third largest in the south Asia
region. The Dhaka Stock Exchange is the prime capital market of Bangladesh. It provides the
listed companies with a channel to seek capital fund from the public and at the same time it
provides the investors a place to buy and sell shares of the listed companies. The objectives of
the Exchange are to establish a sound and stable securities market based on just and equitable
principles of trade as well as to conduct the business in securities giving due regards to the public
interest. For this it is continuously working and the improvement can be seen through its
performance and the new initiatives taken by the DSE.

The Exchange is a non-profit making public company. It works for the betterment of the
country's economy. Thus the Dhaka Stock Exchange is relentlessly trying to make the securities
market an efficient reliable transparent organization that will be capable of meeting the
challenges of economic reality of the country.

8. References:
Dhaka Stock Exchange

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Commission, D. S. (n.d.). Dhaka Stock Exchange. Retrieved from www.dse.org.
Investopedia, www.investopedia.com
Lanka Bangla Finance, www.lankabanglafinance.bd
Stock Bangladesh Limited, www.stockbangladesh.com
Wikinvest, www.wikinvest.com
M. Hassan, Kabir, and M. Anisul, “Market efficiency,
Time varyingvolatility and equity returns in
Bangladesh stock market,”2000
International Journal of Economics and Financial issue, Vol 3, No 4, 2013, Author Najib MH
Masoud