Capital market in Bangladesh

Bangladesh    capital market is one of the smallest in Asia but the third largest in the south Asia region. It has two full-fledged automated stock exchanges namely Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) and an over-the counter exchange operated by CSE.

It also consists of a dedicated regulator, the Securities and Exchange Commission (SEC), since, it implements rules and regulations, monitors their implications to operate and develop the capital market. It consists of Central Depository Bangladesh Limited (CDBL), the only Central Depository in Bangladesh that provides facilities for the settlement of transactions of dematerialized securities in CSE and DSE.

History of Stock Exchange:

Dhaka Stock Exchange was setup on 28^th April, 1954 that started formal trading on early1956.  Post–independence government did not promote a capital market during the first five years, and it was activated again in 1976 with 9 issues on board. In 1995, a second bourse, the Chittagong Stock Exchange, was setup with sophisticated logistic support and modern management.

Vision of the stock exchange:

• Regulating the market structure through proper rules and strict compliance by members.

• Expansion of CSE trading network to cover 504 thanas.
• Introduce Book Building system in Bangladesh capital market.
• Introducing derivative market
• Continuous promotion of stock investment throughout the country.
• Create opportunity to cross border trading with SAFE countries.
• Introduce global depository receipts (GDR)

Mission:

To create an efficient and transparent market facilitating entrepreneurs to raise capital so that it accelerates industrial growth for overall benefit of the economy of the country.

Objectives:

• Develop a strong platform for entrepreneurs for raising capital;
• Provide an investment opportunity for small and large investors;
• Develop a transparent market ensuring investor’s interest;
• Provide a fully automated trading system with most modern amenities to ensure: quick easy, accurate transactions and easily accessible to all;
• Attract non-resident Bangladeshis to invest in Bangladesh stock market;
• Attract foreign institutional investors to invest in bagladesh;
• Collect, preserve, disseminate date and information on stock exchange;

Management of stock exchanges:

DSE and CSE comprises of 25 members of whom 12 are elected through direct election from the 235 and 134 shareholders respectively. Another 12 members representing distinguished personalities from different key economic and social arena of the country. The CEO of the exchange is also a Director of the Board.

Categorization of listed company:

Category:  A, B, N & Z

Category                                                         DSE                            CSE

A                                                                     217                              213

B                                                                     12                                12

N                                                                     7                                  7

Z                                                                      15                                15

Note: this information is collected from the current markets which are currently trading both in DSE and CSE. There are lot other companies in Z category which trading occur in OTC market.

Total number of listed securities and its name including OTC market:

Criteria of the share Category:

“A” Category Companies: Companies which are regular in holding the Annual General Meetings (AGM) and have declared dividend at the rate of 10 percent or more in a calendar year. (Mutual fund, debentures and bonds are being traded in this category).

“B” Category Companies: Companies which are regular in holding the AGM but have failed to declare dividend at least at the rate of 10 percent in a calendar year.

“N’ Category Companies: All newly listed companies except Greenfield companies will be placed in this category and their settlement system would be like B-Category companies.

“Z’ Category Companies: Companies which have failed to hold the AGM or failed to declare any dividend or which are not in operation continuously for more than six months or whose cumulated loss after adjustment of revenue reserve, if any is negative and exceeded its paid up capital.

Trading System