Chapter 1

Introduction

1|Page
1.0 Introduction:

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. It provides a list
of public companies that operates on long term finance in Bangladesh with a broader picture
of how public companies are performing on daily basis and helps the investors to finance
their money by providing regular updated information.

Throughout the term paper it was being analyzed how the Dhaka stock exchange is
performing in the pharmaceutical sector based on some aspects like P/E ratio, Turnover
Ratio, Market Capitalization and Beta. We are considering only a sample of 14 companies
out of 28 of the Pharmaceutical sector.

1.1 Origin of the report:

Our course instructor Jannatunnesa ma’am has authorized us the report as the partial fulfillment
of ‘Investment Analysis and Portfolio Management (FIN425)’ course requirements. We are
assigned to make a report on “Performance of Dhaka Stock Exchange.”

1.2 Objective of the study:

The objective of this report is to assess the Performance of Dhaka Stock Exchange (DSE) from
the year 2000 to 2016. And analyze the Performance of Dhaka Stock Exchange through the P/E
ratio, Market turnover, Market capitalization and Beta coefficient.

1.3 Rationale for the Study:

The stock market allows companies to raise money by offering stock shares and corporate bonds.
It lets investors participate in the financial achievements of the companies, making money
through the dividends (essentially, cuts of the company's profits) the shares pay out and by
selling appreciated stocks at a profit, or capital gain. (Of course, the downside is that investors

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can lose money if the share price falls or depreciates, and the investor has to sell the stocks at a
loss). To avoid the loss, investors must know all the informations related to DSE. So, they need
to study about DSE.

1.4 Research methodology:

 Data of the year 2000 to 2016 collected from secondary sources.
 Data is organized in excel sheets and presented into different graphs and charts.

1.5 Limitations of the study:

 Most of the data are Primary Data that are difficult to collect.
 Data sources are so limited.
 Large-scale research was not possible due to time constrictions.
 The data collection process is time consuming.
 Some maintenance activities were going on in DSE when we went there to collect
data. As a result they were unable to provide us all the required data.
 Collecting data from DSE is costly.

1.6 Report preview:

We have provided a literature review containing assessment of DSE performance. We have also
provided a brief history of DSE along with its mission, vision, functions and objectives. Later we
have shown our analysis of P/E ratio, Market Capitalization, Beta coefficient on different graphs
and charts based on the calculations. As our concentration is only the pharmaceutical industry,
we have chosen a sample of 14 companies. All of our analysis is based on the four companies
and by Market we meant the Average of these 14 companies.

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 Chapter 2
Literature Review

According to Garbade and Sibler Stock market is different from a stock exchange, which is an
entity (a corporation or mutual organization) in the business of bringing buyers and sellers of
stock together.

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Campbell and Diebold (2002) stated that just as it is important that networks of transportation,
electricity and telecommunications function properly, so is it essential that payments can be
transacted, capital can be saved and channeled to the most profitable investment projects and that
both households and firms get help in handling financial uncertainty and risk as well as
possibilities of spreading consumption over time. Financial markets constitute an important part
of the total infrastructure for every society that has passed the stage of largely domestic
economies.

According to Thomas and Karande (2002) the purpose of a stock exchange is to facilitate the
exchange of securities between buyers and sellers, thus providing a marketplace (virtual or real).
Really, a stock exchange is nothing more than a super-sophisticated farmers’ market providing a
meeting place for buyers and sellers.

Demirguc-Kunt and Maksimovic (1996) Relationships have been found to exist between stock
market development and those aspects of an economy, even though some have been
controversial, while other relationships have shown clear and significant correlation. These are

 Financing Choices of Firms

 Financial Intermediaries and
 Long-Run Growth

(Butler, 2012) reveals that in stock market different securities are purchased and sold in
accordance with certain standards and directions. It provides a helpful and secured system or
stage for exchanging various securities. These securities include shares and debentures issued by
organizations that are recorded at the stock trade.

Mohammad Abdus Salam (2015) explained that specialists have categorized five divisions of
DSE- Food and Allied, Fuel and Power, Engineering, Pharmaceuticals and Chemicals, and
Healthcare parts and utilized completely altered standard slightest squares strategy. There may
exist hundreds or thousands causes and events to bring effect on stock price. The study got 5 core
factors which affect the stock price. The obtained factors are: Industry Performance, Market
Influences, Company Performance, Investor Decisions, and Financial Considerations. Also to see

5|Page
the effect of selected variable on stock price movement, one variable – EPS is tested with stock
price to see the effect. The result came that EPS is highly correlated to stock price movement in
the capital market.

Chowdhury A.R. (1995) illustrated the lack of efficiency in the emerging stock markets
through the investigation of informational efficiency in the Dhaka Stock Exchange in
Bangladesh. He tested the vicariate relationship models between stock prices and money supply
changes that suggest independence between the stock price and monetary aggregates.

6|Page
 Chapter 3
Overview of Dhaka Stock Exchange

3.1 History of DSE

The Dhaka Stock Exchange was first incorporated as East Pakistan Stock Exchange Association
Ltd on 28 April 1954 and started formal trading in 1956. It was renamed as East Pakistan Stock
Exchange Ltd on 23 June 1962. Again renamed as Dacca Stock Exchange Ltd on 13 May 1964.
After the liberation war in 1971 the trading was discontinued for five years. In 1976 trading
restarted in Bangladesh, on 16 September 1986 DSE was started. The formula for calculating
DSE all share price index was changed according to IFC on 1 November 1993. The automated
trading was initiated on 10 August 1998 and started on 1 January 2001. A Central Securities
Depository System was initiated on 24 January 2004.

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As of 16 November 2009, the benchmark index of the Dhaka Stock Exchange (DSE) crossed
4000 points for the first time, setting another new high at 4148 points. In 2010, the index crossed
8500 points and finally crashed in the first quarter of 2011. Millions of investors lost their money
and came out onto the street blaming the speculators and regulators for the bubble that finally
burst in what became known as the 2011 Bangladesh share market scam. Currently there are total
22 industrial sectors in DSE which accommodates 553 listed companies.

3.2 Formation
Dhaka Stock Exchange (DSE) is a public limited company. It 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 238 members. Market capitalization of the Dhaka Stock Exchange reached nearly $9 billion
in September 2007 and $27.4 billion on 9 December 2009.

3.3 Vision
The vision of DSE is to aspire a global standard transaction place of securities and financial
product.

3.4 Mission
Its mission is to practice a set of core values to build competency in compliance, diversification
and technology so that an accessible platform, market confidence and wealth maximization
scope can be ensured.

3.5 Core values

 Value for people
 Transparency
 Excellence
 Harmony
 Commitment
 Integrity

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 3.6 Management
The management and operation of Dhaka Stock Exchange is entrusted on a 25 members 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 Industries
 Professor of Finance Department of Dhaka University
 President of Dhaka Chamber of Commerce & Industry

3.7 Objectives of DSE

Dhaka Stock Exchange strives to accomplish the following objectives:

 Increase business turnover

 Modernize trading system
 Ensure effective relationship management
 Achieve high level of confidence & professionalism
 Engage in product and market diversification
 Contribute to capital market policy development
 Ensure exchange related quality services

3.8 Functions of DSE

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.

9|Page
 Market Surveillance.
 Publication of Monthly Review.
 Monitoring the activities of listed companies (As per Listing Regulations).
 Investors grievance Cell (Disposal of complaint byelaws 1997).
 Investors Protection Fund (As per investor protection fund Regulations 1999).
 Announcement of Price sensitive or other information about listed companies through online.

3.9 Legal Control

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

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 Chapter 4
Analysis

4.1Beta Coefficient
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to
the market as a whole. Beta is used in the capital asset pricing model (CAPM), which calculates
the expected return of an asset based on its beta and expected market returns. Beta is also known
as the beta coefficient.

11 | P a g e
 Beta
2.00

1.41 1.49
1.50 1.32 1.40
1.15 1.21
1.00 0.83 0.85 Beta
0.65 0.63
0.45
0.50 0.32
0.01
0.00
I e e o l y a I r o n it a
AC fin be imc ntra eav Sin JM noo aric rio eck alvo at
-0.50 v e m
A Be x e
c al h N h i M O R S W
-0.33
ti IB Ko
Ac lg o
b

In the following graph, we can see that vertical axis shows the beta coefficients of different
companies and the horizontal axis shows the company names.

A beta of 1 indicates that the security's price moves with the market. A beta of less than 1 means
that the security is theoretically less volatile than the market. A beta of greater than 1 indicates
that the security's price is theoretically more volatile than the market.

Here, the Salvo Chemical Industry Limited has the highest beta which is 1.49 that means that the
company’s security is 49% more volatile than the market. The lowest beta belongs to Wata
Chemicals Limited and it is -.33.which means that it moves to the opposite direction of the
market.

4.1.1 Comparison with Market Beta:

We know that Market beta is always 1. So here we are going to compare the beta of the
following companies with 1.

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 1.60 1.49
1.41 1.40
1.32
1.40 1.21
1.15
1.20
1.00 0.83 0.85
0.80 0.65 0.63
0.60 0.45 Company Beta
0.32 Market beta
0.40
0.20 0.01
0.00
I e e o al avy ina I r o n it a
-0.20 AC fin mbe imc ntr e S JM noo aric rio eck alvo at
e x e l h IBN i O R S W
ctiv A Be c
b a Ko
h M
-0.40 A
glo -0.33

The beta of ACI Formulations is .83 which means that its stocks are 17% less volatile than the
market. The stocks of Active Fine Chemicals are 15% more volatile than the market. On the
other hand, the stocks of Ambee Pharmaceuticals are 35% less volatile than the market. The
stocks of Beximco Pharmaceuticals, Central Pharmaceuticals, Global heavy Chemicals, Orion
Pharmaceuticals and Salvo Chemical is 32% ,41% ,21%, 40% and 49% more volatile than the
market respectively. On the other hand, Ibn Sina Pharmaceutical, JMI Syringes & Medical
Devices, Kohinoor Chemicals, Marico Bangladesh, Reckitt Benckiser has beta lower than the
market beta. Their stocks are 15%, 55%, 99%, 37% and 48% less volatile than the market
respectively. The stocks whose betas are less than the market beta are lucrative because they are
less volatile.

4.2 Market Turnover

Share turnover is a measure of stock liquidity calculated by dividing the total number of shares
traded over a period by the average number of shares outstanding for the period. The higher the
share turnover, the more liquid the share of the company.

A high turnover results in increased costs for the fund and decreased returns for shareholders due
to shareholders paying spreads and commissions when buying and selling stocks. In addition,
funds with higher turnover ratios distribute yearly capital gains on which shareholders pay taxes,
which lower shareholders’ returns. In contrast, a low turnover results in decreased costs for the
fund and increased returns for shareholders. Also, funds with lower turnover ratios distribute
fewer capital gains on which shareholders pay taxes. Therefore, investors are advised to choose
mutual funds with turnover ratios under 50% or index funds with turnover no greater than 5%.

13 | P a g e
 70,000.00
66,378.06

Companywise Turnover
60,000.00
Market Average (in
Thousands)
50,000.00
43,557.18
40,701.70
40,000.00

30,000.00
26,323.43

20,105.63
20,000.00 17,080.93
14,230.14 12,963.12
10,000.00
3,808.95
1,354.33 893.29 2,210.92 2,079.39
186.49
0.00

In the above graph, we have shown the comparison between market turnover and the average
turnover of each company from the year 2000 to 2016.The average turnover of these seventeen
years is 17.99 million. If we observe the graph, we can see that, compared to other companies,
the Beximco Pharmaceuticals has the highest turnover, 66.38 million taka. That means, Beximco
Pharmaceuticals has the most liquid shares. And this higher turnover means that, investors will
get lower return from the company.

The most attractive Company for the investors is the Ibn Sina Chemicals with the average
turnover of .18649 million taka. It has the lowest turnover which decrease the cost of the fund
and increase return for the shareholders.

14 | P a g e
4.2.1 Growth rate of Turnover
Here in the graph we can see the percentage change in turnover or the growth of turnover from
2000 to 2016. We can see that the highest turnover was followed in 2007 which is 4248.37%. It
exceeded all the previous records of the turnover in the history of the DSE. Abdullah Bokhari,
the former President of DSE told that the increased liquidity flow from money market helped
attain the turnover, a result of easing the political tension.

Change in Turnover Growth

4500.00 4248.37
Change in
4000.00 Turnover Growth

3500.00
3000.00
2500.00
2000.00
269.65
1500.00 74.97 228.48
1000.00 140.04 53.55
500.00 54.60 24.34
-31.85
0.00
-500.00

-72.26 -6.07
-85.91 -28.56 -100.00
-6.03 -7.08
-58.35

The lowest growth rate was in 2016 which is -100%. The reasons behind this negative turnover
might be that financial institutions invested huge amount in the Pharmaceutical sector because
they had excess liquidity and they did not have any other investment opportunity. Also securities
& exchange commission failed to monitor the capital market properly.

15 | P a g e
4.3 P/E Ratio

The price-to-earnings ratio, or P/E is the ratio of the market price of a company’s stock to its
earnings per share (EPS):

Market Value per Share

P/E Ratio =

Earnings per Share (EPS)

The price-earnings ratio indicates the dollar amount an investor can expect to invest in a
company in order to receive one dollar of that company’s earnings. This is why the P/E is
sometimes referred to as the multiple because it shows how much investors are willing to pay per
dollar of earnings.

4.3.1 Recent P/E

In the following graph we can see the recent price earnings ratio of the sample of
14 companies. Ambee Pharmaceuticals has the highest P/E ratio which is 130.25. It
means that the investors have to pay 130.25 taka to get 1 taka return.

P/E ratio
130.25
150

100
25.23 26.8420.47 34.2 23.57 30.53 22.9 36
50 8.94 13.6 20.1 22.6 8.76
0 P/E ratio
d ls ls ls ls ls ... s y h a r ls ls
ite ica tica tica tica ica dus vice pan des arm kise ica ica
Li m m eu eu eu m e a c m m
e e In D om gl ph en e e
o ns e ch mac mac mac y Ch cals ical ls C Ban ion tt B o Ch a Ch
ati fin har har har eav euti ed ca i t
u l ve M emi aric
o Or eck Salv Wa
m e P P l P l h ac R
r ti o a a & h
I Fo Ac mbe imc ntr lob arm ges r C M
x e g h n o
AC A Be C a P yr
i
in
o
Sin MI S Koh
N J
IB

16 | P a g e
Comparison with Market P/E
The average market P/E 30.285. Here the condition of Reckitt Benckiser is the best as it very
close or almost same to the market P/E. The stocks of Beximco Pharmaceuticals is overvalued as
it is very compared to the market P/E. So the investors has to pay less for earning 1 taka return.

130.25
140
120
100
80
60 34.2 36
30.53
40 25.23 20.1 22.6 26.8420.47 23.57 22.9
8.94 13.6 8.76
20 Company P/E
0 Market P/E

4.4 Market Capitalization

It is the market value of a company's outstanding shares. This figure is found by taking the stock
price and multiplying it by the total number of shares outstanding. Historically, large caps have
experienced slower growth with lower risk. Meanwhile, small caps have experienced higher
growth potential, but with higher risk.

17 | P a g e
 Capitalization (In Thousands)
1921.37 14136.39

2189.76
20061.64
ACI Formulations Limited
Active fine chemicals

17095.13 Ambee Pharmaceuticals

40881.38
Beximco Pharmaceuticals
Central Pharmaceuticals
global heavy Chemicals
1352.82
26508.80
IBN Sina Pharmaceuticals
Industrys
JMI Syringes & Medical Devices
185.56 Kohinoor Chemicals Company
12840.67
Marico Bangladesh
Orion pharma
653.63 65743.05
3789.32 Reckitt Benckiser
Salvo Chemicals
42804.22 Wata Chemicals

In respect to market capitalization, the Beximco pharmaceuticals is holding the top position. It
has the highest market capitalization with 65.74 million taka. The reason behind it might be that
investors are not so much aware of the stock market and they are just buying beximco’s share
without much consideration. Another reason might be they have a surplus of money and don’t
have enough investment opportunities.

The next market leader is Central Chemicals with a capitalization of 42.80 million taka. The
lowest position is hold by Ibn Sina Chemicals with a market capitalization of only .6536 million
taka.

18 | P a g e
4.1.1 Comparison between Market & Company wise Capitalization
The amount of average market capitalization is 17.87 taka (in million). Beximco Pharmaceuticals
has occupied the highest market capitalization which is 65.74 taka (in million). Ibn Sina
Chemicals has the lowest market capitalization .6536 taka (in million).

70000.00
65743.05

60000.00

50000.00

42804.22
40881.38
40000.00

30000.00
26508.80

20061.64
20000.00 17095.13
14136.39 Cpmpanywise Capi-
12840.67 talization (In Thou-
sands)
10000.00
3789.32
1352.82 2189.76 1921.37
653.63 185.56
0.00
d e e o l y a I or rico n it a Market Average
ite e fin mbe imc ntra eav Sin JM no a rio Reck Salv
o at
m x e h i O W
Li tiv A Be c l IB
N h M
ns Ac oba Ko
o gl
ati
ul
rm
I Fo
AC

19 | P a g e
4.1.2 Growth of Capitalization:
In the following graph we can see that the highest capitalization was followed in 2003 which was
103.51 million taka. Then the capitalization suddenly fall and lead to a negative figure due to
stock market crash. Then in 2005 it suddenly increased. From 2000 to 2016 fluctuations are
followed in terms of capitalization in the pharmaceuticals sector. The lowest capitalization was
in 2016.

Capitalization Growth (%)

120000.00

103510.30
100000.00

80000.00

60000.00
Capitalization
Growth (%)
40000.00

20000.00
4277.84
-72.38 25.12 75.59
-6.93 226.24
-93.15
39.45 54.02 53.61
0.00
0 0 001 002 003 00 4 00 5 00 6 00 7 00 8 009 010 011 012 01 3 01 4 01 5 01 6
20 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
-6.10 -29.16 -5.78 -100.00
-20000.00 -99.15

-57.89

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 Chapter 5
Problems & Prospects of Dhaka Stock
Exchange

5.1  Problems of Stock Markets in Bangladesh:

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Dhaka Stock Exchange faced the following problems:

 Price manipulation: It has been observed that the share values of some profitable
companies has been increased fictitiously some items that hampers the smooth operation
of Stock market.

 Delays in Settlement: Financing procedures and delivery of securities sometimes take an

unusual long time for which the money is blocked from nothing.

 Irregulations in Dividends: Some companies do not hold Annual General Meeting

(AGM) and eventually declare dividends that confused the shareholders about the
financial positions of the company

 Selection of Membership: Some members being the directors of listed companies of

DSE, CSE look for their own interest using their internal information of share market.

 Improper financial statement: Many companies do not focus real position of the
company as some audit firms involve incorruption while preparing financial statements.
As a result the shareholders as well as investors do not have any idea about position of
that company.

OTHER Reasons

 The concept of centralization of the securities market has not been implemented that arise
technical problems and political infighting.

 The intrinsic values for securities traded are sometimes estimated without considering the
current market prices of the securities.

 The absence of comprehensive legal and supervisory framework.

 Lack of skilled manpower as well as financial and non-financial institutions involved in

the securities market.

 The lack of proper policy framework that provides incentives and protection to investors.

 The dominance of bigger public sector and borrowing of public sector as well as
government form the institutional sources rather than the market.

5.2 Major future prospects that will change the Stock Market:

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 Within 3 to 6 months 8 large profitable government enterprises are going to be listed
under Direct Listing Method adding value worth another 1 billion Dollar.

 The Telecom Giants in Bangladesh are finalizing their offers for IPO in the market.

 Power and energy sectors demand for capital is 5 to 10 billion dollar within short time to
meet the immediate needs of 5000 MW power demand.

 A deep sea port requiring 1 billion dollar is going to start with a policy decision that itwill
also be listed.

 The Pharmaceutical sector and API enjoying WTO benefit is growing sharply.

 Textile sector as backward linkage to thriving export oriented garments industries

is booming.

 Export oriented food processing industry needs huge capital and technical capacity to
meet the growing standards in global market for marine food, fruits and poultry.

 IT sector with our talented developers, yet to demonstrate the massive potentials
of software industry of the country.

23 | P a g e
 Chapter 6
Findings and recommendations

6.1Findings:

6.1.1 Beta coefficient:

 Salvo Chemical Industry Limited has the highest beta which is 1.49 that means that
the company’s security is 49% more volatile than the market.

24 | P a g e
  The lowest beta belongs to Wata Chemicals Limited and it is -.33.which means that it
moves to the opposite direction of the market.

 Kohinoor Chemicals is the most attractive company as it’s stocks are least volatile to
the market

6.1.2 P/E ratio:

 The average market P/E 30.285.

 The condition of Reckitt Benckiser is the best as it very close or almost same to the
market P/E.

 The stocks of Beximco Pharmaceuticals is overvalued as it is very compared to the

market P/E. So the investors has to pay less for earning 1 taka return.

6.1.3 Market turnover:

 The average turnover of these seventeen years is 17.99 million.
 Beximco Pharmaceuticals has the highest turnover, 66.38 million taka. That means,
Beximco Pharmaceuticals has the most liquid shares.
 The most attractive company for the investors is the Ibn Sina Chemicals with the average
turnover of .18649 million taka. It has the lowest turnover which decrease the cost of the
fund and increase return for the shareholders.
 The highest turnover was followed in 2007 which is 4248.37%.

6.1.4 Market capitalization:

 Beximco pharmaceuticals is holding the top position. It has the highest market
capitalization with 65.74 million taka. DSE had the highest trade in the year 2007.
 The lowest position is hold by Ibn Sina Chemicals with a market capitalization of
only .6536 million taka.

25 | P a g e
  The amount of average market capitalization is 17.87 taka (in million).

6.2 Suggestions to improve the activities of Dhaka Stock Exchange

 To introduce automated monitoring system that may control price manipulation,

malpractice’s and inside trading.

 To introduce full computerized system for settlement of transactions.

 To force the listed companies to publish their annual reports with actual and
proper information that can ensure the interests of investors.

 To take remedial action against the issues of fake certificates.

 The composite Quotation system (CQS) should be introduced and implemented that
available the exchange specialist bid-ask quotes to the subscribers.

 To make arrangement to set-up merchant banks, investment banks and floatation of more
mutual funds particularly in the private sectors.

 Banks, insurance companies and other financial institution should be encouraged deal in
share business directly.

 The brokers should not be allowed to deal in the Scripps on their own accounts.

 The management of DSE and CSE should be vested with professionals and should not in
any way be linked with the ownership of stock exchange and other firms.

26 | P a g e
 Conclusion & References

7.0 Conclusion:
Stock exchange is absolutely important for the proper functioning of capitalistic economy.
Capital markets serve to transfer capital from the surplus units to the deficit units. It plays an
important role by mobilizing the funds to those who can make a proper and productive use
of the sale. They also help the surplus units to be capable of earning returns by serving the

27 | P a g e
 economy to utilize their idle funds in accelerating the economic emancipation through
employment generation. In such a manner the financial institutions especially the organized
stock exchanges contribute to the industrialization to the country.

Bangladesh has a small but growing capital market in South Asia. However, the capital
market of Bangladesh is still underdeveloped, in spite of recent initiatives. The size of the
country’s capital market is quite small in relation to world’s developed stock markets.
Bangladesh capital market is characterized by poor liquidity with high market concentration
mainly due to the excessive dependence of leading corporate entities on the banking sector.

References

 Chowdhury A.R., (1995), “Is the Dhaka Stock Exchange Informationally Efficient?", The
Bangladesh Development Studies, vol. XXlll, pp. 89-104.

 Tversky, A. & Kahneman, D. (1974), Judgement under uncertainty: heuristics and

biases, Science 185, pp. 1124-1131)

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  http://www.stockbangladesh.com/resources/sector_beta/
 http://www.dsebd.org/ilf.php
 http://www.investopedia.com/
 http://bdnews24.com/business/2007/01/21/dse-turnover-hits-all-time-high

Appendix 1:

Beta

ACI Formulations Limited 0.83

Active fine chemicals 1.15
Ambee Pharmaceuticals 0.65

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Beximco Pharmaceuticals 1.32
Central Pharmaceuticals 1.41
global heavy Chemicals 1.21
IBN Sina Pharmaceuticals Industrys 0.85
JMI Syringes & Medical Devices 0.45
Kohinoor Chemicals Company 0.01
Marico Bangladesh 0.63
Orion pharma 1.40
Reckitt Benckiser 0.32
Salvo Chemicals 1.49
Wata Chemicals -0.33

Market Capitalization

Year Capitalization Growth (%)

2000 15095520 -93.15
2001 1034738.4 39.45
2002 1442970 -99.15
2003 12248.34 103510.30
2004 12690542.3 -57.89
2005 5343705 54.02
2006 8230123 53.61
2007 12642162 4277.84
2008 553453164.7 -72.38
2009 152865900 -6.10
2010 143543876.7 25.12
2011 179606191.8 -29.16
2012 127230870.2 -6.93
2013 118409682.5 75.59
2014 207917801.8 -5.78
2015 195902499.1 226.24
2016 639118871.7 -100.00

Market Trunover

Year Turnover Growth (%)

2000 15072970 -31.85
2001 10271790 -85.91
2002 1447080 140.04

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 2003 3473579 269.65
2004 12840179 -58.35
2005 5348323.5 54.60
2006 8268280.2 53.55
2007 12696081 4248.37
2008 552072751.7 -72.26
2009 153140639.8 -6.03
2010 143902820 24.34
2011 178924204.5 -28.56
2012 127816449.9 -7.08
2013 118766820 74.97
2014 207804761.7 -6.07
2015 195197131.5 228.48
2016 641178550 -100.00

P/E Ratio

Company P/E ratio Market P/E

ACI Formulations Limited 25.23 30.285
Active fine chemicals 8.94 30.285
Ambee Pharmaceuticals 130.25 32.485
Beximco Pharmaceuticals 13.6 30.285
Central Pharmaceuticals 20.1 30.285
global heavy Chemicals 22.6 30.285
IBN Sina Pharmaceuticals Industrys 26.84 30.285
JMI Syringes & Medical Devices 20.47 30.285
Kohinoor Chemicals Company 34.2 30.285
Marico Bangladesh 23.57 30.285
Orion pharma 8.76 30.285
Reckitt Benckiser 30.53 30.285
Salvo Chemicals 22.9 30.285
Wata Chemicals 36 30.285

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