Chapter One: Dhaka Stock Exchange LTD

Dhaka Stock Exchange Ltd.
CHAPTER ONE
INTRODUCTION
-1-
1.1.
Origin of The Report

to full fill the requirement of internship program of the BBA
I have prepared of this report
degree under vigilant supervision of A.K.M. Anisuzzaman, Lecturer Department of Bachelors of Business Administration, Dhaka City Collage. It is mandatory for every student to in a particular organization for minimum two or three month. The application of the theoretical knowledge in the practical purpose of this internship program, A detailed analysis on Dhaka Stock Exchange with the role, function, objectives & also about the capital market & trading procedure is focused in this report. This report is presented to the concerned teacher as well as to the organization.
1.2. Rationale of the Study

A firm raises capital to support its operation. Firm can raises capital by issuing debt or equity securities. By knowing about capital market it is helpful for the general investors to know the present condition of stock market and at the time of investment they can invest by their own judgment. And also by the various training affairs of DSE it is helpful for the general investors to know about the share business. By the various training general investors can invest in the share market more carefully and also by understanding in this business. By taking also these training people are able to maximizing their gain & minimizing their loss or risk. DSE officials are also can get profitable by taking various training about DSE rules & regulation. So study on this matter will help both capital market of our country and more will be helpful for general investor about understand the stock market & also for the DSE officials to know rules & regulations of DSE & also for various member of the Securities House able to know the automated trading procedure and I also have tried to find out the benefits for the training affairs of DSE in the stock market.
-2-
1.3. Scope of The Study

I have been assigned in Dhaka Stock Exchange Limited for doing my internship program and thus give me the way to my self familiarized with the environment for the first time indeed. This gives me an opportunity to gather practical experience by working in the Training Academy Department of DSE Ltd. They are of concentration of this report is about the various training affairs i.e. how people can invest in the stock market, how they can gain by stock market, minimizing loss , analysis capability of the stock market, to know the DSE rules & regulations etc. I have chosen this topics because DSE training academy is very new in our country which is few years ago which is started its journey from September 10, 2010 and a very few analysis is done on this matters.
1.4 .Objective of the Study

The title of this report defines the objective of the report. In this report I have the following objective: 1. To known about the DSE Training Academy, its advantages, disadvantages, vision & also for mission. 2. To increase the investment in the stock market of general investors by gather knowledge about the stock market as it is help our economy. 3. To know the performance of the automated trading procedure of the DSE. 4. To know the relationship of the stock market with our countrys economical growth position. 5. To understand the organizational work flow of Dhaka stock Exchange Limited to have a view of the organizational process. 6. To appraise the team approach, culture of organizational behavior, regulation challenges faced by DSE Ltd. 7. To understand the roll of stock Exchange market of the development of the economy of Bangladesh.
-3-
1.5. Sources of Data &Methodology

To complete the paper I have collected required data & information from various sources which can be classified as the following ways;
Primary data
-personal observation -Face to face conservation with executive & officers of DSE Ltd -preparing draft prospects in my concerned dept DSE Training Academy of DSE Ltd.
Secondary Data
Monthly review of DSE Ltd. Visiting www.dsebd.org
Methodology
For analyzing the data I have used both subjective judgments, qualitative & quantitative factor analysis
1.6. Limitations of the Study:During the period of internship program, it was very pleasant & interesting because of cooperation and assistance of DSE executives and officers. They had given permission me to trustfully access into many databases for developing my knowledge & skills. But in preparing the internship report I face some problems which are mentioned below; Lack of comprehensive written reports published documents regarding the Dhaka Stock Exchange Training Academy Two months time is not enough for such an extensive study. It is very difficult to gather practical experience and required information for the completion of the report within this time period Lack of adequate relevant information For the reason of confidentiality , some useful information cant be expressed in this report
-4-
CHAPTER TWO
ORGANIZATION ORIENTATION
-5-
2.1. DSE at a Glance:

Incorporated as East Pakistan Stock Exchange Association Ltd.: Start of Formal Trading: Renamed as East Pakistan Stock Exchange Ltd.: Renamed as Dacca Stock Exchange Ltd.: Trading Suspended under new State Policy: Trading Resumed in Bangladesh: Starting of All Share price Index calculation: 28th April 1954 1956 23rd June 1962 13th May 1964 16th December 1971 16 August 1976 16th September 1986
Share price Indices calculation on basis of IFC Designed formula: 1st November 1993 Starting of automated trading: Starting of DSE-20 Index calculation: Starting of DSE General Index calculation: Start of CDS through CDBL: DSE All share price Index (DSI) Re introduced: 10th August 1998 January 2001 27th November 2001 24th January 2004 28th March 2005
2.2. Background of DSE

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 soon thereafter set up an organizing committee for the formation of a Stock Exchange in East Pakistan. A decisive step was taken 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 government of east Bengal, commerce, labor and industries department at which various aspects of the Issue were discussed in detail. The then central governments proposal regarding the Karachi Stock Exchange opening a branch 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
-6-
members for par chase of membership cards at Rs. 2000 each for the proposed Stock Exchange. The location of the exchange it was thought should be either Dhaka Narayanganj or Chittagong . An organizing committee was appointed consisting of leading commercial and industrial personalities of the province with Mr. Mehdi ispahani as the convener in order to organize the exchange.
The Chamber informed its members and members of its affiliated associations of the proceedings of the above meeting, requesting them to intimate whether they were interested in joining the proposed stock exchange. This was followed by a meeting, at the chamber of about 100 persons interested in the formation of the exchange on 07.07.1953. The meeting invited 8 gentlemen to become Promoters of the exchange with Mr. Mehdi Ispahani as the convener and authorized them to draw up the memorandum and article of association of the exchange and proceed to obtain register under the companies act. 1913. The other 7 promoters of the exchange were Mr. J M Addison Scott, Mr. Mohammed Hanif , Mr. A C Jain, Mr. A K Khan, Mr. M Shabbier Ahmed And Mr. Sakhawat Hussein.
It was also decided that membership fee was to be Rs. 2000 and subscription rate at 15 per month. The exchange was to consist of not more than 150 members. A meeting of the promoters was held at the chamber on 03.09.1953 when it was decided to appoint or diagram & Co., solicitors to draw up the memorandum and articles of association of the stock exchange based on the rules of stock exchange existing in other countries and taking into account local conditions. The 8 promoters incorporated the formation as the East Pakistan Stock Exchange Association Ltd. On 28.04.1954. As public company. On 23.06.1962 the name awes revised to East Pakistan Stock Exchange Ltd. again on 14.05.1964 the name of East Pakistan Stock Exchange Limited was changed to Dhaka Stock Exchange Ltd.
At the time of incorporation the authorized capital of the exchange was Rs. 300000 divided into 150 shares, of Rs. 2000 each and by an extra ordinary general meeting adopted at the extra ordinary general meeting held on 22.02.1964 the authorized capital of the exchange was increased to Tk. 500000 divided into 250 shares of Tk. 2000 each.
-7-
The paid up capital of the exchange now stood at Tk.460000 divided into 230 shares of Tk. 2000 each. However 35 shares out of 230 shares were issued at Tk. 80, 00,000 only per share of Tk. 2000 with a premium of Tk. 79, 98,000.
Although incorporated in 1954, the formal trading was started in 1956 at Narayanganj after obtaining the certificates of commencement of business. But in 1958 was shifted to Dhaka and started functioning at the Narayangonj chamber building in Motijheel C/A. On 01.10.1957 the Stock exchange purchase a land measuring 8.75 Kattah at 9F Motijheel C/A from the government and shifted the stock exchange to its own location in 1959.
2.3. Legal Control

The Dhaka Stock Exchange (DSE) is registered as a Public Limited Company and its activities are regulated are by its Articles of Association rules & regulations and bye-laws along with the Securities and Exchange Ordinance, 1969, Companies Act 1994 & Securities & Exchange Commission Act, 1993.
2.4. An Overview of Dhaka Stock Exchange Ltd.

The Dhaka Stock Exchange (DSE) was first established as East Pakistan Stock Exchange Association Ltd. On April 28th, 1954, but it was not until 1956 that formal trading started. On June 23rd, 1962, it was renamed as East Pakistan Stock Exchange Ltd. On May 13th, 1964. The service on the stock Exchange continued uninterrupted until 1971. The trading was suspended during the Liberation War, and trading resumed in 1976 with changes to the Key economic policy of the government. It was continued uninterrupted since.
In its 50 year journey, the Stock Exchange has made significant contributions to the economy of Bangladesh by acting as a platform for investors to raise capital from the public, The organization is in a relentless process of modernization to catch up to the successful bourses of
-8-
develops nations, by implementing the latest in technology and utilization of the computer marvel. By implement the latest in technology and utilization of the marvel. The stock K Exchange implements automated trading on net worked computers for the first time in 2004. Science that it has upgraded once again in 2005 and still in the process of gauging now technological advanced for implementation.
2.5. DSE as an Organization

The Dhaka stock exchange is registered as a public limited Company its a soft regulatory Organization, i.e. it governs itself, but as with all organization there are a set of rules/politics that guide its activities. They are as follows: Articles of Association DSE Constructed rules & regulation and own by lays Companies Act 1994 Securities & and Exchange Ordinance 1969 Securities and Exchange Rules 1987
2.6 . Function of DSE

The major functions are: Listing of Companies.(As per regulation ) Settlement of trading (A per Settlement of Transaction) Gifting of share/ granting approval of the translation of share outside the trading system of the exchange (As per Regulation 42) Market Administration & Control. Market Surveillance. Publication of Monthly Review. Monitoring the activities of listing company (As per listing.(As per regulation ) Investor grievance Call (Disposal of complain bye laws 1997 Investors production Fund (As per investor fund Regulation 1999
-9-
Announcement of Price sensitive of other information about listing companies through online.
2.7. Policy Making Body

The Council is responsible for policy making only. It consists of 24 members by Article74 (1) mentioned below. 12 councilors to be elected from members 12 Selected councils
One councilor to be nominated by the ministry of Finance (Finance Division) not below the rank status of joint Security. One councilor nominated by the Bangladesh bank from amongst its officers of or above the rank of general manager. President of institute of Chartered Accountants of Bangladesh, ex-officio. President of Federation of Bangladesh chamber of Commerce and Industry, ex-officio. President of Metropolitan Chamber of Commerce and Industry, ex-officio. President of Dhaka Chamber of Commerce and Industry, ex-officio. One councilor to be nominated by the Ministry of Industry not below the rank and status of joint Secretary. One councilor to be nominated by the Ministry of Commerce not below the rank and status of joint Secretary. President of Supreme Court Bar Association, ex-officio. Head of the department Finance/ Economics, Dhaka University, ex-officio member.
-10-
2.8. Organ Gram of DSE

The management of DSE is totally separated from the council. A professional Management Team is running day-today operation and Chief Executive Officer(CEO) is the head of Management Team of the exchange other members are the secretary.
Figure: Organizational Structure of DSE

-11-
2.9. History of Share Organization

The prime bourse of the Country introduced the group A and group B from July 2, 2000 based on its financial strength and performance to give information to investors for taking informed decision. DSE has further categorized the listed securities by introducing Grouping Z which came into effect from September 26, 2000. The Stock Exchange introduced another category of the listed securities as Group G on June 30, 2002. The categorization helps the investors a lot in choosing companies before making decision. The categorization has been widely acclaimed by the investors. The N-category was introduced through an SEC order no. SEC/SRMID/94-231/612 dated July 03, 2006 which is applicable for all newly listed companies other than Greenfield companies and Mutual Funds. Mutual Funds are categorized as A from the date of issue. Criteria for share category are given below;
A-Category Companies Companies which are regular in holding the current annual general meetings and have declared dividend @ 10% or more in the English calendar year.
B-Category Companies Companies which are regular in holding the current annual general meetings but have failed to declare dividend @ 10% in the English Calendar year.
Z-Category Companies Companies which have failed to hold the current annual general meetings or have failed to declare any dividend or which are not in operation continuously for more than six months or whose accumulated loss after adjustment of revenue reserve, if any , is negative and exceeded its paid up capital.
G-Category Companies Greenfield Companies Companies that will start operation after taking money from the market.
-12-
N- Category Companies All newly listed companies except Greenfield companies are placed in this category and their settlement system is like B category Companies.
2.10. Types of Market in DSE

There are four types of market in DSE which are described below;
Public Market The public market is the market where instrument (shares, bond etc.) are traded in normal volume. This is the general market where investors trade in securities and the place where the new investor will probably start off trading in his/ her desired shares. Here all securities are traded in multiples of lots. By lots we mean the numbers of shares the company issues that can be traded at a time, e.g. a lot of 50 shares means that the shares of the company can only be bought / sold in lots of 50, i.e. buy/sell 200 shares meaning buy/sell 50*4 shares, so 4 lots of 50 shares each.
Spot Market In this market instrument are traded in normal volume (under corporate action, if any) without the settlement process as both trade and payment occur at the same time. Shares are also traded in lots in the spot market.
Odd Lot Market In this market odd lots of all instruments are traded. Lots can become odd, i.e. not conforming to the lot specification of the company if the company offers say a share bonus of 20% , so someone with 50 shares now has 50 +10 shares of the company where 50 is the lot and the 10 is the odd lot. However, if the lot is 50, then 5 odd lots of 10 shares each will constitute a single 50 share lot again.
-13-
Block Market The Block market is the market where instrument are traded in bulk (very large volumes). All large volume trades take place in the block market where the minimum limit has been set at Tk. 5 lac i.e. trades in the block market must exceed Tk. 5 lac to be a valid block trade. Block trades are not auto matched but rather open to negotiation between participants who may decide on price that differs from the current market value.
2.12. Types of Order in DSE

Investors give order for the transaction of the shares. Actually the orders that the investors give can be classified by the following ways;
Figure: Types of order in Dhaka Stock Exchange
Price Order Orders that are based on price can be subdivided into two more parts; a. Limit Order: Limit Order is where the investor gives a price limit which ensures that the order shall be traded at the price equal to or better than the limit price. b. Market Order: Market Order is the when order is to be executed at the prevailing market price. This order is matched immediately with the price that a share is currently being traded at.
-14-
Quantity Order Orders that are based on quantity can be subdivided into the following:
a. Partial Fill: A partial fill (PF) order signifies that an order quantity should be executed as much as possible as soon as the order is sent to the market. If the order is not fully executed the remaining order quantity shall be stored which shall be visible to the market.
b. Partial Fill and Kill : A Partial fill and kill (PFAK ) order signifies that as much as possible of the order quantity shall be executed as soon as the order is submitted and the remaining order quantity shall be returned to the trader who entered the order.
c. Full fill or kill: A Full-fill or kill (FOK) order signifies that either all of the orders quantity shall be executed as soon as the order is submitted to the trading engine or the entire order shall be rejected and returned to the trader.
Validity Order: Orders that are based on validity can be subdivided in to following: a. Good till day: Good till day is that all order shall be valid till the end of the current trading day.
b. Good till date: Good till date is the date till which the trader specifies that the order has to remain active in the market.
-15-
2.13. Times of Trading

Investors trade their securities in DSE. Trading is done through online automated system everyday except Friday & Saturday and other government holiday from 10.00 Am to 2.00 pm. Its electronic trading system, TESA, manages trading period in 5 phases. These are:
Enquiry: In this session, only Brokers can logon to the system. The only functionality available is the withdrawal of order placed during the previous trading session.No new orders are submitted and no trade takes place.
Opening: This session is where all buy and sell orders are compared to calculate the open adjust price with relevant adjustment being made as required by the standards upon which the system has been designed. No trades take place during this session. Trading takes place during this session as participants enter orders for immediate execution or for inclusion in the book until prices are matched. The New investor will do his / her trading during this period. All the DSE trading takes place during this session .By trading hours of the Stock Exchange .WE mean this period of the five phases.
-16-
Continuous Trading
Figure: Continuous trading in DSE
Closing: Trading stops and Closing Market prices are calculated and the information supplied to the market participants. The investor can now see the results of the days trading in DSE.
Enquiry: Another enquiry session with basically the same guidelines as the opening enquiry session except here the market is closed instead of opening.
2.14. The Clearing & Settlement

The Clearing and Settlement module provides the management of trade from the point of entry into the Settlement Pool trade database until it has been delivered, settled and removed from the Settlement Pool. It consists of three major business processes.
-17-
Clearing: Participating trade reporting, affirmation, billing and assigning settlement instructions.
Settlement: The process of overseeing that delivery of all instruments to the buyer and payment of all moneys to the seller has occurred before removing the trade from the settlement pool. Regulation 4 of the Settlement of Stock Exchange Transactions Regulation 1998 has been given effect time to time. A new directive was made by SEC dated on 18 th March 2003 Adjusted due position mechanism for settlement of scrip only as provided by regulation 4 (1) of settlement of Stock Exchange Transaction Regulations , 1998 shall remain suspended from 19th March 2003 until further order. Here is a complete picture of the settlement system for all of our 444 Instruments in Five(5) groups in the Four(4) markets.
A Group: Number of Instruments are 323 ( 163 +8D + 17 M +135 TB ) , Here D for Debentures , M for Mutual funds & TB for Treasury Bonds ( Trading in Public , Block & Odd-lot Market with trade for trade settlement facility for scrip only through DSE Clearing House on T+1,T+3 basis). A and DA are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading Software.
Figure: The above cycle is valid for A, B,G & N category instruments traded in Public, Block & Odd-lot market.
-18-
B Group: Number of Instruments are 27 ( Trading in Public, Block & Odd-lot Market with trade settlement facility through DSE Clearing House on T+1, T+3 basis). B and DB are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading Software.
G Group: Number of Instrument is 0 ( Trading in Public , Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1 , T+3 basis ) . G and DG are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software.
N Group : Number of Instrument is 11 ( Trading in Public , Block & Odd-lot Market with trade settlement facility through DSE Clearing House on T+1, T+3 basis ).N and DN are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software.
Z Group: Number of Instruments are 83 ( Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+3 , T+7 basis).Z and DZ are marked in BASES columns for Non Demat & Demat instrument respectively in our TESA Trading software.
Figure: This cycle is valid only for Z group instruments traded in Public, Block & Odd-lot market.
-19-
For Instruments of Foreign Trade in the A,B, G,N and Z Categories : All Foreign trade instruments will follow the settlement standard set in the figure below:
Figure: The above cycle is valid for A, B, G, N & Z category instruments traded in spot market.
Settlement for Different Categories Instruments

1) For A , B , G & N group Instruments :
Market name Public Odd + Block Sport
Trade for Trade System Trade for Trade * Trade for Trade Trade for Trade
Settlement & Settlement Period T+1&T+3 T+1&T+3 T+0&T+1
-20-
2) For Z group Instruments :
Market name
Trade System
for
Trade Settlement & Settlement Period
Public Odd + Block Spot Closer) (Before Book
Trade for Trade * Trade for Trade Trade for Trade
T+3&T+7 T+3&T+7 T+0&T+1
2.14. DSE Vision - 2013

The Countrys prime and oldest capital market , Dhaka Stock Exchange , is continuing its journey through the last 54 years and to reach a new height it has set another visionary target namely DSE Vision 2013 ( a 5 year Plan). Through adopting this mission and target based approach DSE virtually heralds its arrival into the new era of serving the countrys economy, industrial sector and overall mission with a catalyst role. The Committee of DSE Vision 2013 (5 Year Plan) of DSE sat together on January 04, 2009 and opted out the following conspicuous points to be achieved by the above mentioned time frame.
Market Based Targets - To increase the market capitalization to US $ 30 billion - Market Capitalization to GDP ratio to be increased to 35% - Daily trade volume to be increased to Tk , 2000 core - To expand trading facilities to the door of investors - Through facilitating the process of introducing Book Building Method fundamentally
sound and good companies should be enticed to get listed in to the bourse
- Introducing financial to broaden and deepen the capital market - Bond market to be activated to increase the depth and dimension of capital market.
-21-
Institutionally Internal Visions

To create a skilled and trained human resources team for DSE who will carry out the responsibilities and will be shouldered with all sort of duties to discharge with efficiency and professionalism. State-of the Art Technology in IT Infrastructure to facilitate the automated trading activities faultlessly, which will ensure the accountability and visible transparency. To set up an effectively On-line based National Clearing House; aiming to bring more transparency in trading financial instrument and to reduce time lag. To review the Necessary Rules and Regulations ( particularly Settlement Regulation 1998 and CDBL By laws)
Vision for Investors Interest Protection To lay time-bond emphasis on protecting the interest of investors to bring dynamism and more vibrant participants in market. To give more Emphasis on Investors awareness program for the sake of educating them properly. Information dissemination and active strategies to reduce the degree and dimension of rumors.
Two other targets of the Vision 2013 ( a- 5 years plan) of are
SEC-DSE Joint Collaboration and Contribution to Countrys Economy.
-22-
CHAPTER THREE
OVERVIEW OF BANGLADESH CAPITAL MARKET
-23-
3.1. A Brief History of Bangladesh Capital Market

The discussion of capital market is very important for any economy. Capital market is recognized as a vehicle for rapid economy development for a country through mobilization available resources in that country. As development of economy, Bangladesh has a long and illustrious history of its capitals market development Different financial asset are traded in this market. From almost skeleton shape in Bangladesh Capital Market in slowly but steadily moving ahead. Initial public offering, direct listing and trading in the secondary market are slowing an enormously optimistic trend. Market capitalization multiplying in colossal dimension in the trading of Equities and Debt Security. As Finance Students, we have to study on this financial.
From 1992, the capital market of Bangladesh started to be recognized a source of finance for industry & business. With the success of big public issues in 1994 & 1995. Investors look the capital market as an alternative to money market as a sou7rce of financing. It is estimated that an aggregated amount of taka 20 billion has been raised against public issues, private placement of shares, debentures & other securities from 1992 through 1996 (The Financial Express, 1999). After that an unprecedented market crash in 1992 has shaken the confidence of the investor and its impact is still lingering. Investors are the prime movers
of the Capital market. After that regulatory bodies have tried to win back the five store greater participation in the capital market as well as their confidence. Some major envelopments, particularly the introduction of an line computer trading system in the two stock exchange, and also some organizational changes or reforms have been taken place. The major regulators of Bangladesh capital market is Securities & Exchange Commission, Stock Exchange & register of joint Exchange & stock Companies (RJSC). register of joint
3.2. Segments of the Capital Market

The capital market has two segments which are described below
Securities Segment
A security segment of a capital market is concerned with the process a company distributes its securities to the public in the primary market & the securities are then traded in the secondary markets. Basically, these trades are done in the Stock Exchange. There are two Stock Exchanges in Bangladesh The Dhaka Stock Exchange Ltd. & the Chittagong Stock Exchange Ltd. For
-24-
every pro-market economy, this securities segment plays the role of a growth engine. A vibrant securities market segment is likely to signal a robust economy. While lending by commercial banks and support for corporate growth, a developed bond/ equity market is an important pre quested to move into a more into a more mature growth with more sophisticated conglomerates. This Securities segment is controlled by the securities & exchange Commission (SEC) which was established on 8th June 1993 under the Securities & Exchange Commission Act 1993. The chairman & the members of the commission are appointed by the government and have overall responsibility to administer securities legislation.
Non Securities Segment

These are markets in which Loans or Equity Loans are provided by the banks & financial institutions, such as NCBs, DFIs, PCBs, ICB. We need to recognize that the condition in the bank-based system are unpalatable in these sense of huge non-performing loans, high degree of classified & default loans, capital inadequacy of banks and the like These are causing the banking system in Bangladesh to maintain widespread gap between lending & borrowing rates . It is, therefore, need of the time to streamline the banking regulatory & supervisory frameworks particularly in the wake of financial deregulation. However, we are concerned about the securities segment which has been denoted as the capital market.
3.3. Characteristics of Bangladesh Capital Market

Over the past few years our bourse, the Dhaka Stock Exchange Ltd., has experienced dizzying growth in its turnover which has been welcomed with much fanfare. Even among many well known international institutions, our capital market is being considered as having the potential to become a heaven for investor both international & domestic. This is where the policy makers and the stakeholders at every level, be it the government , the SEC, the Exchanges and the listed companies, must intervene and hammer out the disturbing real problems marring our market once and for all and not depend on the band aid prescription which do seem to benefit the market in the short-run but are on a whole detriment not only to the goal, growth & development of the market but also the interest of investors and the listed companies in the long term .The real issues marring our market can be summarized as follows;
-25-
Inadequate liquidity Lack of an equitable IPO system Corporate governance in regards to corporate disclosure & behavior of merchant banks. Lack of basic equity research Other obstacles face by policy makers include but not limited to the followings Low quality or inconsistent accounting standards Lack of investor compensation schemes Insufficient knowledge of basic capital market rules & practices among investors A weak bankruptcy system Weak rules for takeover A small number of investors The absence of large and active domestic institutions investors Low foreign portfolio investment Inadequate clearing and settlement systems Lack of competition in domestic financial market, specially the dominance of the banking sector in our country.
-26-
CHAPTER FOUR
An Introduction to Dhaka Stock Exchange Training Academy
-27-
4.1 About DSE Training Academy: What Is It?

DSE Training Academy (DTA) has started its journey since September 10, 2007 inaugurated by the then Finance and Planning Adviser Dr. A.B Mirza Md. Azizul Islam. The core mission of DSE Training Academy is Human Resource Development in the field of Capital Market. The Academy is located at DSE Annex Building-2, 158-160 Modhumita Building 8th (Floor), Motijheel C/A, Dhaka-1000. DTA presently has arrangement of a 54 - seated Training Hall equipped with all modern facilities and setup. Since the volume of training affairs have been increasing manifold, the DTA is planned to be shifted to a new premise with a capacity of 2,500 sift. area where it will have TFT Monitor and Linux Virus Free Operating Platform with additional modern facilities of two different class rooms with adequate sitting capacity together with a computer lab, reference library, a prayer room and a dining hall. Classroom of the Academy is equipped with modern electronic tools such as overhead projector, multimedia projector, and high-speed computer system with UPS and sound system. DSE Training Academy has faculties and the speakers drawn from the Industry, a rich pool of professionals, practitioners and eminent personalities, who mix the theory with practical aspects through which participants gets hands on knowledge of the market.
4.2 Objectives of DSE Training Academy

To educate and develop professionals for the securities industry in Bangladesh. To function as a center for creating investor awareness through research and training
To contribute to the orderly and healthy development of Capital Market by bringing expertise to bear on structural and policy issues concerning the securities industry.
To disseminate information about Local and International Capital Market by creating a comprehensive body of knowledge.
To offer training programs required for the registration of target groups of Capital Market professionals.
-28-
To offer intermediate-level and advanced training for the stakeholders of Capital Market.
To offer compliance and governance related training to Issuer firms. To offer training for DSE Officials on skill development. To review, revise and update qualification programs to make sure that they are of the highest quality both in terms of content and delivery methods and meet market needs.
To establish a comprehensive database of instructors and participants. To create alliances with international educational and regulatory institutions. To develop and deliver quantitative high-quality short courses based on industry and regulatory needs.
4.3. Mission Statement

overall proficiency standards in the industry, which will contribute to the efficiency, effectiveness, and safety of the Market.
To develop and deepen the pool of qualified professionals available in the Capital market.
4.4. Vision
To cultivate highly proficient, knowledgeable and competent securities professionals who will contribute to the growth, efficiency and fairness of the Capital Market.
To be a high-caliber, highly respected Capital Markets training provider, which is responsive to market needs and attracts both the National and Regional securities professionals.
-29-
To gain recognition and respect of the industry; locally, regionally and internationally.
4.5. History of DSE Training Academy
WITH the aspiration of imparting time-bound training on securities market, country's first training academy has started its journey at the Dhaka Stock Exchange Limited which is located at 158-160 Modhumita Building (8th Floor), Motijhell C/A, Dhaka-1000 recently.
The academy is expected to play a catalytic role in spreading technical and practical education pertinent to both domestic and international securities market. While inaugurating the DSE Training Academy the Boston-educated economist and country's Finance and Planning Adviser Dr. A.B. Mirza Azizul Islam said that there was no alternative to setting such an institute for imparting securities market relevant education among the practitioners and investors.
Starting in 1954 country's capital market has crossed a long way but there has not been any formal way of catering to the need of imparting fundamental and basic training through institutional set up. Securities market and people concerned with this have felt the urgency for such a training academy. It is not that there was no training on securities, rather there was no institution dedicated to this special need. After inaugurating it, the former SEC Chairman Aziz said that he also felt the requirement of such an institute when he served the SEC but he could not get the plan implemented.
The absence of a formal and institutional arrangement of education on securities market had been always a headache for the knowledge-thirsty investors and professionals. Through the DSE Training Academy the worries have been removed and a new era has been created in the meantime, commented the DSE Chief Executive Officer Professor Salahuddin Ahmed Khan. Echoing the tone of Finance Adviser about the demand and urgency of training on securities market Salahuddin Ahmed Khan said with this mile-stone setting project the DSE will make the
-30-
investors more aware so that they can judge before making any investment in capital market. Apart from experts inside the country, the DSE will arrange training programme inviting resource persons from foreign country, which will surely bring a drastic and dramatic change in the arena of securities market related education, observed the DSE Chief Executive Officer. Financial Analysts always suggest that without prior experience and making fundamental judgment on the strength of a company no one should dare to buy shares of that group. History tells us that October 19, 1987 was a black Monday in the history of capital market as without any prior and evident reason share prices fell 23 percent at NYSE on that day. But today situation is totally different and no probability of a 1996 like share price nose-diving again in the Bangladesh market. Under the present circumstances if any investor knows some basic factors of a company including the value of net asset of that company, Earning Per Share (EPS), Total Asset, Total Liabilities, Credit Worthiness, Total Annual Turnover, Future Prospect, Holding of Annual General Meeting, Declaration of Dividend (Cash, Bonus or in Stock) then he or she can decide easily whether shares of that company is suitable to buy or not.
People not involved in the share market usually think that share market means gambling and speculation. But with the passage of time and supervision of the capital market's regulatory body, SEC and DSE's own monitoring department along with surveillance division, there is now not so much scope for gambling and speculation. And the setting up of the DSE Training Academy will surely spread awareness among the investors. The former SEC Boss Mirza Aziz heavily emphasized on including morality and ethics-based training at the DSE Training Academy . The SEC current Chairman Faruq Ahmed Siddiqi also expressed his optimism that initiation of institutional training through DSE Training Academy will definitely bring a new and completely hopeful picture for all of us. On the very first day the DSE arranged a two-day training programme for the members of the Economic Reporters' Forum and it was a successful one. Long live the DSE Training Academy through discharging its duties with utmost sincerity and highest degree of honest and sincere intention. The writer is an executive at the Dhaka Stock Exchange Limited and founder of the Association of English Learners, DU. May be reached at bazluh@gmail.com
-31-
4.6 Inauguration of the Dhaka Stock Exchange Training Academy Finance Adviser Inaugurates the DSE Training Academy
Finance and Planning Adviser Dr. A.B Mirza Md. Azizul Islam On September 10, 2007 inaugurated the newly built DSE Training Academy at DSE Annex Building-2, 158-160
th
Modhumita Building 8 (Floor), Motijheel C/A, Dhaka-1000, and a two-day training programme for the members of Economic Reporters Forum (ERF).
The Finance Adviser Dr. A.B. Mirza Md. Azizul Islam at the inaugural Ceremony of DSE Training Academy and Training Program for ERF members at the Dhaka Stock Exchange Ltd. on September 10, 2007.
Securities and Exchange Commission Chairman Mr. Faruq Ahmad Siddiqi, DSE Senior Vice President Mr. Ahmad Rashid Lali, Managing Director of Arab Bangladesh Bank Mr. Kaiser A Chowdhury and ERF president Mr. Zakaira Kajal delivered speech at the inaugural programme. DSE President Mr. Md. Abdullah Bokhari presided over the inaugural ceremony and DSE Chief Executive Officer Mr. Salahuddin Ahmed Khan moderated the inaugural ceremony.
At the inaugural programme Dr. A. B Mirza Md. Azizul Islam as the chief guest of the programme said to keep the rising flow of demand for shares in the recent flourishing capital market in the country the government has planned to off-load shares of a good number of stateowned companies including BTTB, Meghna Petroleum, Jamuna Petroleum, Jamuna Multipurpose Bridge and government-owned shares in two banks. The Finance Adviser also said that mobile companies will be listed on the bourses. Like many countries including India big
companies, such as Tata and Birla, big size companies in Bangladesh should get listed in the capital market to ensure their growth. At the initial stage the government will off-load shares of Tk 150 crore of Jamuna Bridge after securitisation. Mentioning the governments ardent desire toward capital market expansionary programme he also said that only concerted efforts of the Regulators, Stock Exchanges, Bangladesh Bank and the government expected dynamism, awareness among investors can bring many ones in the capital market and expected growth is also possible. Corporate entities for the sake of ensuring accountability, transparency and benevolence to the society should
-32-
get listed to Stock Exchanges as listing to the bourses ensures proper disclosure of information to the society. Market Capitalisation is only 9.15 per cent of the GDP. So there is a huge scope of growth. Big multinational companies especially telecommunication companies should be enticed to get listed. The SEC Chairman Mr. Faruq Ahmad Siddiqi as special guest of the programme felt the need for supply of more quality shares in the market for maintaining the current flow of rising demand. He said that due to less demand the total volume of transaction was not up to the market but in the recent time the market has shown bearish trend and now the government, DSE, SEC and other concerned bodies should concentrate on maintaining this flow. He laid emphasis on proper knowledge on the rules and regulations of the capital market and should be well informed about the market situation before making investment. He vowed his commitment to protect the interest of investors jointly with DSE and government. The approval of Direct Listing Law by SEC has opened the path for the stateowned companies to off-load shares in the capital market which two companies in the power sector have done. In Vote of Thanks the DSE President Mr. Md. Abdullah Bokhari emphasized that sufficient knowledge on hedge fund risk, when to take profit, how to compute yield, benefits of dividend, importance to know disclosure, market correction, symptom of ballooning, dilution, short sale and derivatives has been urgently necessary. DSE Senior Vice President Ahmad Rashid Lali said the capacity expansion of the DSE Trading Engine from 2 Units of Processor to 4 Units everyday the DSE is prepared for the challenges when the daily transaction will grow beyond Tk 500 crore. He also hoped that after the off-loading of Jamuna and Meghna Petroleum shares, energy sector and some portion of Dhaka Electric Supply Co. (DESCO) and Power Grid Company of Bd. Ltd. (PGCB) shares may be released. The telecommunication may hit the market next year, said Mr Ahmad Rashid. We have almost completed the Book Building Method and it will be in the market within the next 3 months. We will soon venture out the mission of derivative market for more vibrant and stable capital market, highlighted Mr. Rashid. Referring to the market development initiative, Mr Rashid said as part of market expansion compared with other regional markets they sent 25-member delegates to Bombay Stock Exchange for taking first hand idea on Book Building methods of IPOs and Derivative Market.
-33-
The DSE Senior Vice President sought cooperation from the countrys central bank-Bangladesh Bank- through the Finance Adviser. Some Road Shows in different big cities would be arranged to attract NRBs. DSE CEO Mr. Salahuddin Ahmed Khan said that it had been a history that a high profile man like minister or adviser visited DSE and inspired the overall advancement and pertinent activities of capital market. It will surely work as stimuli among the investors. The Finance Adviser unveiled the plaque of the newly built of DSE Training Academy and the cover of Fortnight Capital Market-a special publication of DSE on capital market in Bangladesh. ERF President Mr. Zakaria Kajal said capital market is a very sensitive place and such type of training will surely help them know the pros and cons of securities market especially in preparing reports. Mr. Zakaria highly expressed over the training programme by DSE. Later a two-day training programme started for the members of the Economic Reporters Forum. The Training programme covered the topics including Reporting Securities Market Activities, How to Report Securities Market Behaviour, Reporting on Monitoring and Market Surveillance. Understanding Corporate Reports, Depository and IPO Rules in Bangladesh. A question answer session was held later. Securities and Exchange Commission (SEC) member Mr. Mansur Alam, Chairman of Finance Department in Dhaka University Dr. Mahmood Osman Imam, SEC Executive Director Mr. Anwarul Kabir Bhuiyan, DSE Chief Financial Officer Mr. Satipati Moitra, SEC ED Mr. Farhad Ahmed took classes on respective topics. A question answer session was conducted by SEC Member Mr. Mansur Alam and DSE Chief Executive Officer Mr. Salahuddin Ahmed Khan. Later DSE President Mr. Md. Abdullah Bokhari distributed certificates among the participants of ERF. DSE senior vice president Ahmed Rashid was also present. ERF members highly expressed satisfaction over the training progamme.
-34-
4.7 ADVANTAGES OF DHAKA STOCK EXCHANGE TRAINING ACADEMY

1. To be a professional for the securities industry in Bangladesh. 2. To be able to grow investor awareness through research and training 3. To be able to contribute to the orderly and healthy development of Capital Market by bringing Expertise to bear on structural and policy issues concerning the securities industry. 4. To be able to disseminate information about Local and International Capital Market by creating a Comprehensive body of knowledge. 5. To get training required for the registration of target groups of Capital Market professionals. 6. To get intermediate-level and advanced training that are required to be a stakeholder of Capital Market. 7. To get compliance and governance related training. 8. To get training on skill development, specially if you are a DSE Official. 9. To be able to review, revise and update qualification programs to make sure that they are of the highest quality both in terms of content and delivery methods and meet market needs. 10. To be able to establish a comprehensive database of instructors and participants. 11. To be able to create alliances with international educational and regulatory institutions. 12. To develop and deliver quantitative high-quality short courses based on industry and Regulatory needs.
-35-
CHAPTER FIVE
ACTIVITIES OF DSE TRAINING ACADEMY
-36-
5. Functions of DSE Training Affairs:

In the function of DSE Training Academy are discussed about different types of training affairs . These training affairs are very much important as a professional for the securities industry in
Bangladesh, gathering knowledge about Local and International Capital Market, for skill development as a DSE official and for different reason. At present in DSE Training Academys main functions are conducted by the 22 different training. Functions of DSE Training Academy are categorized by the following:1. Monthly Investors' Awareness Program (Extensive Course) 2. Monthly Investors' Awareness Program 3. Weekly Investors' Awareness Program 4. Authorized Representative Training 5. Practical Training on Automated Trading System 6. Compliance and Associated Issues 7. Training Program on Compliance in Corporate Governance by Listed Companies 8. Orientation on Book Building Method 9. Orientation Program for Capital Market Journalist Forum 10. Orientation on OTC Market 11. Orientation on OTC Market for General Investors 12. Orientation Program for Economic Reporters' Forum (ERF) 13. Investors' Awareness Program for women 14. Financial Netting & Loan amount provided by the Members 15. Compliance in Basic Office Management by the Member Companies 16. Compliances in Basic Office Management for the Women Officials of the Member Companies 17. Foundation Course on Securities Market Operation 18. Investors' Awareness Program for Officials 19. Regional Investors' Awareness Program 20. Internal Audit, Risk Management & Control 21. Training Program on Asset Management 22. Training Program on Merger & Acquisition
-37-
5.1. Monthly Investors Awareness Program( Extensive Course)
- Objectives
The program aims at educating the existing and the potential investors of the Market. Participants of this program are privileged of having more effective and much needed knowledge and information thoroughly and elaborately on capital Market affairs for making in wise investment.
-Program Contents
ents.
ion.
-Target Audience
General Investors (Existing & Would be).
-Resource
Renowned personality and Expert of Capital Market.
-38-
5.2. Monthly Investors' Awareness Program

-Objectives The program aims at educating the existing and the would be investors of the Market. Participants of this program are privileged of having more effective and much needed knowledge and information thoroughly and elaborately on capital Market for making in wise investment.
-Program Contents
of Capital Market & Role and Function of Stock Exchange.
nalysis.
-Target Audience
-Resource
Personality and Expert of Capital Market & DSE Officials.
-39-
5.3. Weekly Investors' Awareness Program

-Objectives The program aims at educating the investors of the Market. Participants of this program are privileged of having more effective and much needed knowledge and information thoroughly and elaborately on capital Market for making in wise investment.
-Organizing Authority Sponsored by the Member Companies, arranged in collaboration with the DSE Training Academy. Each Member Company in each week sponsors the program and bring in the in-house retail investors through registration.
-Program Contents
on of Capital Market. - Overview, Design & Processes . - Overview, Design & Processes.
-Target Audience
General Investors (Retail).
-Resource
Invitee Guest known as Specialist of Capital Market, SEC & DSE Officials.
-40-
5.4. Authorized Representative Training

-Objectives The program aims at educating the would be Authorized Representatives of the Member Companies of DSE. Participants after the basic orientation on the role and responsibilities of the Authorized Representatives are considered for obtaining license subject to issuance by the regulatory authority.
Organizing Authority Jointly organized by the SEC & DSE.

Program Contents

Capital Market regulatory framework and Securities Market Intermediaries. Types of Securities includes Corporate, Governments, Municipal & Asset Backed Securities.
Equity/Debt Securities & Central Depository System. Reading Financial Statements/Record keeping of Broker/Dealer. Surveillance System of SEC. Enforcement Actions and Appeal. Public Issue of Securities: Mutual Funds. Trading and Settlement of Securities and associated rules. Clearing and Settlement of Securities and associated rules.
Target Audience
The Would be Authorized Representatives nominated by the Member Companies.
Resource
SEC & DSE Officials.
-41-
5.5. Practical Training on Automated Trading System

Objectives This has been a practical training program where the participants are being educated with the necessary information and knowledge related to the activities of trading operation. Simultaneously, the participants are being trained with the bookish as well as practical trading affairs. The participants get divided into 5 to 6 groups with a single workstation assigned with for each group where one become trader while the others are investors. The participants enjoy artificially real time trading environment by way of keeping the System of ICT and Surveillance application up. This is how; the trainees can develop professionalism and enhance the quality of level of capability by exercising the trading activities in a dummy-trading atmosphere. Program Contents
Practical demonstration on TESA trading software.
Real Surveillance Practice applied on Mock Trade.
Compliance of Securities related Rules and Regulations. Automated Clearing & Settlement System. Network (LAN, WAN) and its application.
Target Audience
Nominated Authorized Representatives, would be Authorized Representatives and Officials nominated by the Member Companies.
Resource
DSE Officials
-42-
5.6. Compliance and Associated Issues

Objectives This has been a practical training program where the participants would be educated with the necessary information and knowledge related to the operational activities and affairs of the stock market. This training package not only comprises of the theoretical part of compliance but also practical demonstration on various compliance issues that must be in compliance with by the Member Company. Knowing the market affairs out and out by the responsible officials of the Member Companies of DSE is very important. Because development of these Officials can bring in the desired level of development of the market to perform systematically and with discipline. Program Contents

Maintenance of records, books and documents by Member Companies. Clearing and Settlement System. Compliance of Securities related Rules and Regulations. Surveillance functions on Unusuality. DP related issues. Financial Documents & Terminologies and associates issues.
Target Audience
CEO, CFO, Compliance Officer, Manager, In-Charge, Authorized Representatives nominated by the Member Company.
Resource
SEC & DSE Officials
-43-
5.7. Training Program on Compliance in Corporate Governance by Listed Companies

Objectives Ensuring compliance in Corporate Governance by the Listed Companies with compliance of the Listing Rules and Regulations and the desired level of accountability in preparing Account is very important. The training package offers the participants with an opportunity of getting known to the standards of precise corporate culture under the guidelines of Corporate Governance. Program Contents

Accountability in Accounts and Compliance of Listing Regulations. Role of Company Secretary in Compliance with Corporate Governance. Extent of Compliance of Corporate Governance Guidelines by Listed Companies.
Target Audience

Members/ Owners/ Representatives of Member Companies CEO, CFO & Company Secretary of Listed Companies Merchant Bankers Insurance Issue Managers & General
Resource
Prominent and Recognized Experts from the field of Capital Market.
-44-
5.8. Orientation on Book Building Method

Objectives Book Building Method is a new device to be introduced in the Capital Market of Bangladesh. Orientation of the Methodology among the stakeholders of the market is very important as the mechanism of Book Building Method in discovering the price has to be familiarized. The orientation program aims at educating the participants of the market with required knowledge and information thoroughly and elaborately. Program Contents
Process, Procedure and Implication of Book Building Methodology.
Target Audience

Members/ Oweners/ Representatives of Member Companies CEO, CFO & Company Secretary of Listed Companies Merchant Bankers Issue Managers General
Resource
-45-
5.9. Orientation Program for Capital Market Journalist Forum

Objectives This is a Six-Month orientation program designed for basic education and affiliation of the Journalists responsible for reporting on the Capital Market affairs. Series of sessions of this program would be conducted once in a week on Saturday in every month in which the same participants under the forum would take part. Therefore, on every Sixth event (a six day program in six months) of this, there would be a completion of the program with Certification.
Program Contents

IPO Procedure: Book Building Method and Direct Listing Regulatory Framework Basic orientation of Capital Market and Role and Functions of Stock Exchange Understanding Basic Finance and Accounts Macroeconomic Analysis and its implication on Financial Market
Target Audience
Members of Capital Market Journalist Forum (CMJF)
Resource
5.10. Orientation on OTC Market

Objectives This is a one day orientation program designed for the basic education and affiliation for the stakeholders of Capital Market. The operational procedure, function and the rules and regulations relevant for this Market would be the topics of this program. The program is designed to be held at least twice in a month until stakeholder of the Market is cover.
-46-
Program Contents

Fundamental of OTC Market. Operational Procedure and Function of OTC Market. Basic rules and regulations relevant for OTC Market.
Target Audience
Compliance Officer of the Member Companies, DSE.
Resource
Distinguished personality and expert from the field of Capital Market.
5.11. Orientation on OTC Market for General Investors

Objectives This is a one day orientation program designed for the basic education and affiliation for the general investors of Capital Market. The operational procedure, function and the rules and regulations relevant for this Market would be the topics of this program.
Program Contents

Fundamental of OTC Market. Operational Procedure and Function of OTC Market. Basic rules and regulations relevant for OTC Market.
Target Audience
General Investor of Capital Market.
Resource
Distinguished personality and expert from the field of Capital Market.
-47-
5.12. Orientation Program for Economic Reporters' Forum (ERF)

Objectives This is a one day orientation program jointly organized by DSE & ERF, designed for the basic education and affiliation for the Reporters' responsible for reporting on Capital Market affaires. The day long program shall facilitated the reporters' knowing the basic of Securities Market and those help to getting them skilled and efficient on quality and effective reporting on Capital Market.
Program Contents

IPO Procedure: Book Building Method and Direct Listing. Regulatory Framework. Basic orientation of Capital Market and Role and Functions of Stock Exchange. Understanding Basic Finance and Accounts. Macroeconomic Analysis and its implication on Financial Market.
Target Audience
Members of Capital Market Economic Reporters' Forum.
Resource
-48-
5.13. Investors' Awareness Program for women

Objectives The program aims at educating the existing and the would be woman investors of the Market. Participants of this program are privileged of having more effective and much needed knowledge and information thoroughly and elaborately on capital Market for making in wise investment.
Program Contents

Basic orientation of Capital Market & Role and Function of Stock Exchange Fundamental Analysis Basic Investment Awareness; Dos & Don'ts Understanding basic Finance and Accounts Macroeconomic Analysis & its implication on Financial Market Technical Analysis Financial Modeling; Dividend Discount Model (DDM) Investors Right & Relevant Laws Portfolio Investment and Stock Analysis. General Market Discussion & Questionnaire Session
Target Audience
General Investors (Existing & Would be)
Resource
-49-
5.14. Financial Netting & Loan amount provided by the Members

Objectives This program is designed for the basic education and affiliation for the stakeholders of Capital Market with the purpose of understanding the entire affairs of Netting & Loan amount provided by the Member Companies.
Program Contents
Financial Netting & Loan amount provided by the Members
Target Audience
Compliance Officer of the Member Companies, DSE.
Resource
MIC Officials.
5.15. Compliance in Basic Office Management by the Member Companies

Objectives The aim of the program is to aware the Compliance Officer & Manager of the Member Companies regarding compliance of maintaining relevant documents, records and basic office management as per securities related rules, regulations and directive of SEC.
Program Contents

Compliance of Securities Related Rules & Regulations by Member Companies. Maintenance of Books & Records as per the set Rules & Regulations of Securities Market.
Overall Compliance in Basic Office management by Member Companies.
-50-
Target Audience

Compliance Officer. Manager of the Member Companies, DSE.
Resource
5.16. Compliances in Basic Office Management for the Women Officials of the Member Companies
Objectives The aim of the program is to aware the Women Officials of the Member Companies regarding compliance of maintaining relevant documents, records and basic office management as per securities related rules, regulations and directive of SEC.
Program Contents

Compliance of Securities Related Rules & Regulations by Member Companies. Maintenance of Books & Records as per the set Rules & Regulations of Securities Market.
Overall Compliance in Basic Office Management by Member Companies.
Target Audience
Maximum 4 Women Officials of the Member Companies.
Resource
-51-
5.17. Foundation Course on Securities Market Operation

Objectives This program aims at providing the basic education and awareness to the mass people with business background have interest in the affairs of Capital Market in a very comprehensive manner comprising of all the affairs, techniques, technologies, methodologies & modalities of securities market operation. It will be a 6 Month comprehensive program package; successful participants of this will be awarded with certificates after due evaluation & examination. Rich pool of experts from both the Academic and Specialist in the field of Capital Market shall conduct the program. Qualified participants shall have good opportunity of making in wise investment decision as well as availing career building prospect in the field of Capital Market. The direct stakeholders of the market (Member Companies, Listed Companies, Stock Exchanges, Commission, Merchant Bankers, Asset Management Companies and so on) will also have an opportunity of recruiting trained & well qualified human resources certified from the Academy.
Program Contents

Basic orientation of Capital Market. Capital Market regulatory framework. Enforcement Actions and Appeal. Introduction to DSE, Role and Functions of Stock Exchange. Introduction to CDBL & Role & Functions of CDBL. Regulatory Affairs of CDBL & DP related issues. Public Issue of Securities: IPO, Book Building & Direct Listing in light of Public Issue Rules.
Introduction to Clearing and Settlement System of DSE & compliance of related rules & regulations.
Introduction to DSE Automated Trading System & Automated Trading Regulation (with practical training).
Introduction to Application Software (TESA). Introduction to Basic Network (LAN, WAN) and its application. Automated Clearing & settlement System.
-52-

Compliance of Securities Related Rules & Regulations (Market Introduction). Compliance of Securities Related Rules & Regulations (Issuer Company). Understanding & Presentation of Financial Statements. Analysis of Financial Statements. Introduction to Product available in Secondary Market and their Valuation Mechanism. Macroeconomic Analysis & its implication on Financial Market. Impact of macroeconomic variables upon the stock market in Bangladesh-Research findings.
Portfolio Management. Role & Function of Merchant Bank & Investment Banker. Regulatory Matters of Asset Management Companies & SEC Supervision. Mutual Fund-Investment Process in line to Asset Management Companies & important matters to know.
Mutual Fund Sector Analysis, International Context. Basic Orientation on Commodity Market. Basic understanding of financial Derivatives. Applications Income Tax in the field of Capital Market. Applications of VAT in the field of Capital Market. Extent of Compliance of Corporate Governance in Capital Market. Introduction to Merger & Acquisition & Risk Consideration. Valuation & Structuring in line to Merger & Acquisition. Financing the Acquisition; Public to Private; Integrating the Acquisition. Basic Orientation of Internal Audit, Risk Management & Control. Surveillance from the part of the Regulator, SRO & Member Companies. Compliance in Basic Office Management. Overall Compliance in Basic Office Management by Member Companies. Financial Netting and Loan amount. Basic Investment: Dos & Don'ts. Overall Discussion on Capital Market, Prospect & Potentials.
-53-
Target Audience
Qualification Requirement: Graduation with Business & Commerce background, Economics, Statistics.
Resource
Academicians, Renowned personality and Expert of Capital Market.
5.18. Investors' Awareness Program for Officials

Objectives The program aims at educating the existing and the potential investors of the Market who by line of profession are Officials representing different entities of public & private sector. Participants of this program are privileged of having more effective and much needed knowledge and information thoroughly and elaborately on capital Market affairs for making in wise investment.
Program Contents

Basic orientation of Capital Market. Introduction to DSE & Role and Function of Stock Exchange. Basic Investment Awareness; Dos & Don'ts. Investors Right & Responsibilities. Understanding basic Finance and Accounts. Fundamental Analysis. Technical Analysis. Financial Modeling & Portfolio Investment Fundamental of Stock Valuation. Evaluation & Certification.
Target Audience
Officials from Public & Private entities.
Resource

-54-
5.19. Regional Investors' Awareness Program

Objectives The program aims at educating the existing and the potential investors of the Market outside Dhaka city. Participants of this program are privileged of having more effective and much needed knowledge and information thoroughly and elaborately on capital Market affairs for making in wise investment. The program will be held once in every month in different divisional headquarters and major cities of Bangladesh.
Program Contents

Basic orientation/overview of Capital Market. Introduction to DSE, Role and Functions of Stock Exchange. Investment Techniques in light of fundamental & technical analysis. Investors Rights and Responsibilities.
Target Audience
Resource
5.20. Internal Audit, Risk Management & Control

Objectives The program aims at developing the knowledge and skill of the professionals with regard to various important concepts of Internal Audit, Risk Management & Control. Participants of this advanced program will be privileged of acquiring the comprehensive knowledge necessary to evaluate the companys risk management, internal control and corporate governance processes.
-55-
Program Contents

Introduction to Internal Audit & Control Environment. Risk Based Internal Audit. Internal Control & Verification. Value Audit & Performance Audit. Audit Report Writing. Management Audit. Audit Planning, Controlling and Documentation. Audit Evidence, Frauds and Errors. Audit Committee & its functions.
Target Audience

Professionals from all areas of Management. Regulators & Auditors Back & Middle Office Professionals Management and Strategy Consultants Interested Qualified Personals and General
Resource
Practitioner, academician, prominent and recognized experts from the field of Capital Market.
-56-
5.21. Training Program on Asset Management

Objectives This program aims at developing the skills of professional management of Investments such as stocks and bonds, along with real estate. Participants of this course will achieve advanced and enhanced skills in equity, debt, alternative investment management and many other in-depths of portfolio management and investment management. This in term will effectively increase the participants level of economic assessment of trade-offs among alternative investment options and undertake cost-effective investment decisions.
Program Contents

Regulatory Matters. Mutual Fund -Investment Process. SEC Supervision. Important Matters to Know. Mutual Fund Sector Analysis. International Context.
Target Audience

Portfolio/ Fund & Asset Managers Investment Analyst/ Advisors/ Strategists Equity and Fixed Income Analysts Wealth Managers and Private Bankers/Investors Independent Financial Adviser Back & Middle Office Professionals Regulators, Auditors & Actuaries Pension Fund/ Trustee Managers
Resource
Practitioner, Academician, prominent and recognized experts from the field of Capital Market.
-57-
5.22. Training Program on Merger & Acquisition

Objectives This program aims at developing and enhancing the understanding of the process of structuring & financing Merger and Acquisition. Participants attending the course will be privileged of the much needed knowledge of capital structuring decisions for acquisition, develop negotiating skills in M&A process and develop an understanding of due diligence process and learn to mitigate and manage risk.
Program Contents

Introduction to mergers and acquisitions Risk considerations Valuation and Structuring Financing the acquisition Financial Acquisition: public to private Integrating the acquisition
Target Audience

Financial Analysts/Managers Management and Strategy Consultants Strategic Planners Market Regulators Investment Directors Corporate Finance Lawyers/ Accountants and General
Resource
Practitioner, Academician, prominent and recognized experts from the field of Capital Market.
-58-
CHAPTER SIX
Future Plan About DSE Training Affairs
-59-
6. Future Thinking of about DSE Training Affairs:
Some Training Affairs have in Dhaka Stock Exchange which are planning for bringing in the near future. These training affairs are in the following:
DSE Online Trading Operation. Certificate Program/Diploma Course on Capital Market

o o o o o o o o o o o o o o o o
Debt Markets Fundamental Analysis Technical Analysis Equity Portfolio Structuring and Stock Analysis Mutual Fund Insider Trading IPOs ; Procedures and Processes Understanding Book-Building Method Risk Management, Financial Engineering and Value Maximization Surveillance, Risk Management and Securities Settlement Macroeconomic Analysis and its Implications on Financial Market Valuation of Shares Securities Market Rules and Regulations Foundation Course on Stock Market for the would be ARs Basic of Bonds and understanding Bond analysis Financial Derivatives
Compliance in Corporate Governance Compliance requirements for Member Brokers Basic Finance and Accounts for non finance Executives Financial Modeling Stock Market orientation program for the Economic Reporters International program on stock market operation
-60-
The above programs would be organized in short/long-term basis. The Academy is planned to introduce Diploma Certificate Courses as well. Detailed program information i.e. schedules with registration form, course fee and other relevance would be disseminated shortly.
-61-
CHAPTER SEVEN
Domestic and International Curriculum of DSE Training Affairs
-62-
Domestic Curriculum:Various domestic and international curriculums incase of increasing awareness of regional and foreign people analyzing by their own before investing in the capital market. Domestic Curriculum of Dhaka Stock Exchange Training affairs are happened in the three regional areas Sylhet and Barisal and Chittagong.
7.1. Training Affairs in Sylhet:DSE Training Academy conducted the Investors Awareness Program at Sylhet in the month March 2009.
Figure: Awareness Program in Sylhet
-63-
7.2. Training Affairs in Barisal:DSE Training Academy conducted the Investors Awareness Program at Barisal in the Month January 2010.
Figure: Training Affairs in Barisal
7.3. Training Affairs in Chittagong:Recently awareness program also held on Chittagong district for doing sincere of the people who are invest in the stock market. Because of not anybody loss their money by investing in capital market for not understand about various terms of share business i.e. value of net asset, earning per share( EPS), total asset, total liabilities, credit worthiness, total annual turnover, future prospect, holding of annual general meeting , declaration of dividend ( cash, bonus, or in stock) . By giving understand of these terms meaning and also give them ability to get decision easily whether shares of any company is suitable or not and for that reason these awareness program is very necessary & helpful for investors.
-64-
International Curriculum:In the perspective of awareness program about stock market incase of international curriculum training program also held on road show in UK and Thailand.
7.4. International Road Show in UK

DSE Training Academy conducted the International Road Show for the NRBs in UK in the month July, 2009
Figure: International Road Show in UK
-65-
7.5. International Road Show in Thailand:DSE Training Academy conducted the International Road Show in the month December, 2009 in Bangkok, Thailand.
Figure: International Road Show in Thailand
-66-
CHAPTER EIGHT
Findings, Recommendations & Conclusion
-67-
8.1. Findings of DSE Training Affairs:DSE Training Academy is a milestone in training on Securities Market. This academy plays a catalytic role in spreading technical & practical education pertinent to both domestic and international securities market. Securities market & people concerned to felt the urgency for such a training academy. It is not there was no institution on Securities, rather there was any institution dedicated to better understanding of securities market. Basically, many people have who are not invest in the capital market because of fear either they lost their money by investing in capital market. They dont know better understanding about the many terms of capital market & also not understand about stock market. So they did not invest in capital market although they have interest. These training are very helpful for the general investor and also for new investor. Findings of Dhaka Stock Exchange Training Academy are mentioned below: Through the DSE Training Academy the worries about investing in the securities market have been removed and a new era has been created in the meantime. People not involved in the share market usually think that share market means gambling and speculation. But with the passage of time and supervision of the capital market's regulatory body, SEC and DSE's own monitoring department along with surveillance division, there is now not so much scope for gambling and speculation. And the setting up of the DSE Training Academy will surely spread awareness among the investors. Under the present circumstances if any investor knows some basic factors of a company including the value of net asset of that company, Earning Per Share (EPS), Total Asset, Total Liabilities, Credit Worthiness, Total Annual Turnover, Future Prospect, Holding of Annual General Meeting, Declaration of Dividend (Cash, Bonus or in Stock) then he or she can decide easily whether shares of that company is suitable to buy or not. For that reason in this training academy teach these terms to the general investors and also for new investor. For increasing investor awareness DSE training academy had organized some research and training. These training includes monthly investors awareness program (Extensive Course, short course), weekly investors awareness program. For general investors another long term i.e. six month duration training was newly organized for which graduation is must.In this foundation course mainly discussed about basic orientation of capital market, introduction to Application Software(TESA), Automated Clearing & Settlement System
-68-
overall discussion on capital market, prospect & potentials.For official person investors awareness program also organized. Another investor awareness program are organized only for women encouraging them in the capital market. The program aims at educating the existing and the would be woman investors of the Market. Participants of this program are privileged of having more effective and much needed knowledge and information thoroughly and elaborately on capital Market for making in wise investment.
Educating the Authorized Representatives of the Member Companies of DSE Authorized Representative Training also jointly organized by the SEC & DSE. Participants after the basic orientation on the role and responsibilities of the Authorized Representatives are considered for obtaining license subject to issuance by the regulatory authority.
Practical demonstration on TESA trading software are given to the nominated Authorized Representative by the practical training on Automated trading system. Participants are
being educated with the necessary information and knowledge related to the activities of trading operation. Simultaneously, the participants are being trained with the bookish as well as practical trading affairs.
Training Program also includes about the Compliance and Associated Issues, Compliance in Corporate Governance by Listed Companies, orientation on Book Building Method, orientation on OTC Market, Orientation Program for Economic Reporters Forum( ERF), Financial Netting & Loan amount provided by the Members, Internal Audit ,Risk Management & Control, training program on Asset Management and also training program on Merger & Acquisition.
Some investor awareness programs are also organized regional basis. Investor awareness programs are arranged in Sylhet, Barisal and recently arranged in Chittagong District. International Curriculum also involved in the DTA. International road show in UK and Thailand are arranged by the DTA.
8.2 Recommendations :
-69-
For educating about the capital market as a institution of DSE Training Academy is very new in our country. This training academy is very helpful for the investor. This training is very necessary for becoming a professional of securities industry in Bangladesh, investor can become sincere when invest in the capital market,any DSE Official can get training for skill development, be able to disseminate information about Local and International Capital Market by Creating a comprehensive body of knowledge. For improvement of the DSE Training Academy and also for more utilizing this training academy some recommendations should to be taken. The following recommendations can improve the condition of Dhaka Stock Exchange Training Academy: Since DSE Training Academy is very new in our country, so many of the investor even dont know about the DTA and also benefits of DTA. And without training or without knowing the financial terms of capital market many investor loss their money. These training are very much important for those people. So necessary circular for introducing training academy and publication of prospectus of these training are very much important and by that way it will improve the condition of DTA. Consciousness about getting these training is needed to increase to the general and new investor. So they are investing in the capital market more sincerely and that way that way they can minimize their loss. Than day by day condition of capital market will increase. For making these training more effective for the general investor, in the lecture material of these training need to include share capital related topics and subject more. Because general investor which background is not finance or accounting they are less understand of the finance and accounting terms. So for that reason keeping finance and accounting terms less and more discussion about share market i.e. how the people can invest , when investor buy or sell share, how long they keep share on hand, which companys share they buy, how can they increase gain by minimizing loss etc. if these type of topics are discussed more then it will more efficient and effective for both the investor and also for condition of the capital market. The depth, bresdth & liquidity of our capital market should increase day by day. So now need to increase more and more training in our country. Width of this training academy can also need, by giving necessary circular.
-70-
8.3 Conclusions:
DSE Training Academy has many advantages both for the investor and also for the DSE official. DSE Training Academy also important for becoming authorized of any Securities House, by taking authorized representative training. In this training academy also given training about practical training about TESA trading software which is more effective for any member companys person when they trade. In short these training are very valuable for the awareness program about the securities industries of Bangladesh. These training are also beneficial for various reason such as- to be a professional
for the securities industry in Bangladesh, to be able to grow investor awareness through research and training, to be able to contribute to the orderly and healthy development of Capital Market by bringing Expertise to bear on structural and policy issues concerning the securities industry, to be able to disseminate information about Local and International Capital Market by creating a Comprehensive body of knowledge, to get training required for the registration of target groups of Capital Market professionals, to get intermediate-level and advanced training that are required to be a stakeholder of Capital Market, to get compliance and governance related training, to get training on skill development, specially if you are a DSE Official, to be able to review, revise and update qualification programs to make sure that they are of the highest quality both in terms of content and delivery methods and meet market needs, to be able to establish a comprehensive database of instructors and participants, to be able to create alliances with international educational and regulatory institutions, to develop and deliver quantitative high-quality short courses based on industry and Regulatory needs. Moreover our Exchanges as well as our capital market will be benefited if large numbers of people or general investor are educated by gathering knowledge about capital market and invest more in the capital market by maximize gain and minimize roll.
-71-
CHAPTER NINE
REFERENCES
-72-
References
Dhaka Stock Exchange Library Monthly review, Dhaka Stock Exchange Ltd. Khan, Salahuddin Ahmed Capital Market in Bangladesh: Some Observations, DSE Monthly Review, December 2009. Frank K. Reilly & Keith C. Brown; Investment Analysis & Portfolio Management
Website: www.dsebd.org www.secbd.org

(http://www.thefinancialexpress-bd.com/more.php?news_id=12088)
-73-
CHAPTER TEN
APPENDIX
-74-
Glossary:
DSE-Dhaka Stock Exchange Ltd. SEC- Securities & Exchange Commission CEO-Chief Executive officer CFO- Chief Financial officer PFAK- Partial fills and kill PF- Partial fill FOK- Full-fill or kill RJSC- Register of Joint Stock Companies IPO- Initial Public offering DTA- DSE Training Academy EPS- Earning Per Share ERF- Economic Reporters Forum DESOC- Dhaka Electric Supply Company PGCB-Power Grid Company of Bd. Ltd. OTC- Over the Counter Market DDM- Dividend Discount Model
-75-

Chapter One: Dhaka Stock Exchange LTD

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter One: Dhaka Stock Exchange LTD

Uploaded by

Copyright:

Available Formats

Dhaka Stock Exchange Ltd.

Dhaka Stock Exchange Ltd.

Origin of The Report

I have prepared of this report

1.2. Rationale of the Study

Dhaka Stock Exchange Ltd.

1.3. Scope of The Study

1.4 .Objective of the Study

Dhaka Stock Exchange Ltd.

1.5. Sources of Data &Methodology

Dhaka Stock Exchange Ltd.

Dhaka Stock Exchange Ltd.

2.1. DSE at a Glance:

2.2. Background of DSE

Dhaka Stock Exchange Ltd.

Dhaka Stock Exchange Ltd.

2.3. Legal Control

2.4. An Overview of Dhaka Stock Exchange Ltd.

Dhaka Stock Exchange Ltd.

2.5. DSE as an Organization

2.6 . Function of DSE

Dhaka Stock Exchange Ltd.

2.7. Policy Making Body

Dhaka Stock Exchange Ltd.

2.8. Organ Gram of DSE

Figure: Organizational Structure of DSE

Dhaka Stock Exchange Ltd.

2.9. History of Share Organization

Dhaka Stock Exchange Ltd.

2.10. Types of Market in DSE

Dhaka Stock Exchange Ltd.

2.12. Types of Order in DSE

Figure: Types of order in Dhaka Stock Exchange

Dhaka Stock Exchange Ltd.

Dhaka Stock Exchange Ltd.

2.13. Times of Trading

Dhaka Stock Exchange Ltd.

Figure: Continuous trading in DSE

2.14. The Clearing & Settlement

Dhaka Stock Exchange Ltd.

Dhaka Stock Exchange Ltd.

Dhaka Stock Exchange Ltd.

Settlement for Different Categories Instruments

Market name Public Odd + Block Sport

Settlement & Settlement Period T+1&T+3 T+1&T+3 T+0&T+1

Dhaka Stock Exchange Ltd.

2) For Z group Instruments :

Trade Settlement & Settlement Period

Public Odd + Block Spot Closer) (Before Book

Trade for Trade * Trade for Trade Trade for Trade

T+3&T+7 T+3&T+7 T+0&T+1

2.14. DSE Vision - 2013

Dhaka Stock Exchange Ltd.

Institutionally Internal Visions

Two other targets of the Vision 2013 ( a- 5 years plan) of are

SEC-DSE Joint Collaboration and Contribution to Countrys Economy.

Dhaka Stock Exchange Ltd.

Dhaka Stock Exchange Ltd.

3.1. A Brief History of Bangladesh Capital Market

3.2. Segments of the Capital Market

Dhaka Stock Exchange Ltd.

Non Securities Segment