Growth Analysis of Chittagong Stock Exchange in

Bangladesh

(This Dissertation has been submitted in fulfilment of the requirements for

the degree of Master of Business Administration with a major in Finance and
Banking)

SADIA ISLAM JABIN

ID: R-193450
PROGRAM: MBA
MAJOR: FINANCE & BANKING

Department of Business Administration

International Islamic University Chittagong
Summer-2020
Growth Analysis of Chittagong Stock Exchange
in Bangladesh

SADIA ISLAM JABIN

ID: R193450
PROGRAM: MBA
MAJOR: FINANCE & BANKING

Date of Submission: 26th March, 2021

Supervisor

Sirajul Islam
Associate Professor, DBA, IIUC

______________________
Signature of Supervisor

Department of Business Administration

International Islamic University Chittagong
Summer: 2020
 CERTIFICATION

This is to certify that the thesis entitled “Growth Analysis of Chittagong Stock Exchange in
Bangladesh” is an original research work carried out by Sadia Islam Jabin under my direct
supervision. So far, I know, this is a unique and genuine work and it has not been submitted to any
other University or Institution for any degree nor does it contain any material previously published in
any form. To the best of my knowledge, the data used in this research work is adequate, accurate, and
reliable.

I have gone through the draft and final version of this thesis and approved it for submission to the
International Islamic University Chittagong for the award of the degree of “Master of Business
Administration” in Finance & Banking.

26th March, 2021 -------------------------------------------

(Sirajul Islam)

Associate Professor of IIUC

Department of Business Administration
International Islamic University Chittagong
Chittagong-4318
Bangladesh
 DECLARATION

I am Sadia Islam Jabin, hereby declare that this MBA dissertation entitled “Growth Analysis of
Chittagong Stock Exchange in Bangladesh” is based on a study undertaken by me under the
supervision of Assistant

Associate Professor, Sirajul Islam Department of Business Administration, International Islamic

University Chittagong and submitted to the International Islamic University Chittagong for the
fulfillment of the degree of Master of Business Administration.

To the best of my knowledge, the thesis contains no material previously published or written by any
other person, except where due reference is made in the text of the thesis, and a list of references is
given in the bibliography. No attempt has been made to project the contributions of others as my own
as well.

26th March, 2021 -------------------------------------------

(Sadia Islam Jabin)

Department of Business Administration
International Islamic University Chittagong ,Chittagong-4318
Bangladesh
 Acknowledgments
All the Praises goes to Almighty Allah, the most gracious and most merciful. The accomplishment
and completion of the dissertation would not have been viable. While I was finished in doing my
research and preparing this dissertation, I have got generous and spontaneous supervision, guidance,
and support from the following persons and hence I want to take the honor and privilege to show my
gratitude to those persons.

The stock market refers to the collection of markets and exchanges where regular activities of buying,
selling, and issuance of shares of publicly-held companies take place. Bangladesh has two stock
exchanges, Dhaka Stock Exchange (DSE) & Chittagong Stock Exchange (CSE). This sector is mostly
notable field that can be researched immeasurably, and as my core focus is within this field of study
has been Growth analysis of Chittagong Stock Exchange in Bangladesh. This research work has helped
me reach the competitive levels required as a Master graduate in the field of Stock market. Realizing
this research work has been particularly challenging for me, and I learned a lot about the research
world and its code.

I would like to thank all the professionals from the field of Stock market for their previous work. It
has been very stimulating for me to get a remarkably clear picture and gain in-depth knowledge from
professionals in this domain.

I would also like to thank Serajul Islam, Associate professor of IIUC who deserves my most gratitude
as a supervisor for his guidance, availability, and expertise in this field. This thesis could not have
been written without the great support of my supervisor. Not only has he encouraged and motivated
me throughout the whole course but also has faith in my ability to accomplish a research paper on
“Growth Analysis of Chittagong Stock Exchange in Bangladesh” He has provided tremendous
insights and invaluable comments on the thesis.

Further, I would like to thank all the teachers who participated in my education in this Master’s at
International Islamic University Chittagong. Also, I am grateful to the authority of IIUC who supports
me in this pandemic situation and rescheduling the deadline of thesis submission date so that I and
those who didn’t complete their thesis in time will have time to complete it properly.

Sadia Islam Jabin

 Preface
In a developing economy like Bangladesh, stock exchange has a vital role to play in the economic
growth and development of the country through which capital market development can be ensured. A
strong and well-structured secondary market is the center of capital market, which bears paramount
importance in the economic development of a country. This article seeks to examine growth analysis
of Chittagong Stock Exchange in Bangladesh from the period of 2011-2020. Generally, stock market
transfers the fund from surplus units to deficit units for investment. The main purpose of the study is
to examine the significance of stock market in economic development of Bangladesh. The study has
used only secondary data. The secondary data are collected only relevant to study such as market
capitalization, stock turnover, number of listed securities and companies, stock index, financial
position, total asset, total Liabilities, owners equity, The main reason to consider the certain period is
the availability of data. The study has used some statistical measures of means, growth rate, standard
deviation, coefficient of variation. This study revealed that stock markets have made substantial
contribution in economic development of Bangladesh. This essay is particularly concerned with the
role played by an emerging stock market in influencing the economy. The findings of the study suggest
that although Bangladesh stock market is growing over time, the growth has not yet assumed any stable
and obvious trend, which imply that Bangladesh stock market is still at an early stage of its growth
path with a small market size relative to GDP and is characterized by poor liquidity and high market
concentration.

[Key words: Stock market, number of listed securities & mutual fund, growth analysis, turnover, market
capitalization, GDP CSE]
 Table of contents
SL No. Contents Page No
I. Certification
II. Declaration
III. Acknowledgements
IV. Preface
CHAPTER ONE: Introduction 1-3
1.1 Introduction 2
1.2 Research objectives 3
1.3 Significance 3
1.4 Structure of the thesis 3
CHAPTER TWO: Literature Review 4-10

2.1 Literature Review 5-6

2.2 Stock Market 7
2.3 Stock Market development & economic growth 7
2.4 Dhaka Stock Exchange (DSE) 8
2.5 Chittagong Stock Exchange (CSE) 8
2.6 Market Capitalization 8-9
2.7 Stock Turnover 9
2.8 Stock Index 9
2.9 GDP Rate 10
2.10 Ratio of turnover to market capitalization 10
2.11 Growth Rate 10

CHAPTER THREE: Methodology 11-12

3.1 Methodology Research Design 12

3.2 Sources and Types of Data 12

3.3 Research Methods 12

13-24
CHAPTER FOUR: Data Analysis
4.1 Number of Listed Securities in CSE 14-15
4.2 Number of listed Mutual Fund in CSE 15-16

4.3 Price index of listed securities in CSE 16-17

4.4 Sector wise index of listed securities 17-18

4.5 Sector wise financial performance of Listed 19-20

securities
4.6 Market Capitalization of CSE and Contribution to 20-21
the GDP
4.7 Ratio of turnover to market capitalization 21-22

4.8 Performance summary of the CSE Trading statistics 22-23

4.9 Five years financial Highlights of the CSE 23-24

5.0 CSE five years Total Asset, Total Equity, Total 24

liabilities and growth analysis
CHAPTER Five: Findings, Recommendations and 25-28
Conclusion
5.1 Findings and Recommendations 26

5.2 Conclusion 27

5.3 References 28
 Page |1

CHAPTER 1
 Page |2

1.1 Introduction
Economic growth and development is the ultimate goal of every country of the world and to
bring the desired growth, continuous and sustained mobilization of resources is required. The
stock market plays an important role in economic development of Bangladesh. The stock
market argument is the process of economic development though a number of ways: a)
bringing together holders of surplus funds and users of such funds; b) offering a broad
spectrum for investment and financing choices to both investors and issuers, c) drawing more
institutions into investment, and e) reducing the dependence of industrial enterprises on non-
security market for capital. Bangladesh capital market is one of the smallest in Asia but
within the south Asian region, it is the third largest one. It comprises of two stock exchange
companies--Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE). These
two stock exchanges are regulated by the Securities and Exchange Commission (SEC). An
efficient capital market may perform as an alternative to many other financing sources as
being the least cost capital source. Especially in a country like ours, where savings is
minimal, and capital market can no wonder be a lucrative source of finance.

At times when the banking sector of the country is facing the challenge of bringing down the
advance deposit ratio to sustainable level, the economy of the country is unfolding newer
horizon of opportunities. Due to over-exposure level of the financial system the securities
market could play a very positive role, had there been no market debacle. The capital market
also helps increase savings and investment, which are essential for economic development.
A Stock market, by allowing diversification across a variety of assets, helps to reduce the
risk of the investors must bear, thus reducing the cost of capital, which in turn spurs
investment and economic growth. From the above points it is easily realize that Stock Market
is the most important sector to accumulate capital for the industrialization of the country, but
it is most vulnerable. For that, I have motivated to dig deep into these issues and accordingly
I have under taken the study to evaluate the performance of the Stock Market. The study is
an endeavor that will be helpful to the listed companies, stock brokers, Management of CSE,
SEC, and Bangladesh Government.
 Page |3

1.2 Objectives of the study

This research has been conducted with several objectives. The general objectives of the study
are: identifying the growth analysis of Chittagong Stock Exchange in Bangladesh. However,
the specific objectives are:

• To analyze the growth of number of listed companies and mutual funds.

• To analyze the growth of price index of listed securities.
• To analyze the growth of total asset, total liabilities & total equity.
• To evaluate the market capitalization contribution to the GDP and ratio of turnover to
market capitalization.
• To identify the sector wise index and financial performance of listed securities.
• To investigate performance summary of CSE trading statistics.

1.3 Significance
The stock market plays an important role in economic development of Bangladesh. It transfers the
fund from surplus units to deficit units for investment. The main purpose of the study is to examine
the significance of stock market growth rate analysis. The importance of this study is to clarify
study such as market capitalization, stock turnover, number of listed securities and companies,
stock index. It also plays crucial role to understand the origin of Stock market financial position
that are depends on countries growth and development. With the help of this research individual
can differentiate between their products and service and the mechanism of their work. It can also
help in forecasting CSE trading statistics. The study seems to carry an enormous academic value
since a few studies have been undertaken in this area.

1.4 Structure of the Thesis

Chapter 1-Gives an overview of the general introduction, the significance of the study.
Chapter 2 - Literature Review, Stock Market, Stock market development & economic growth, DSE,
CSE, Market capitalization, Stock turnover, stock index, GDP rate, ratio of turnover to market cap, growth
rate analysis

Chapter 3 - Discusses the Research Methodology adopted for this research.

Chapter 4 - Contains in detail the Analysis of Data.
Chapter 5 - Findings of the study, Recommendation & conclusions of the study.
 Page |4

CHAPTER 2
Literature Review
 Page |5

2.1 Review of the Literature

Although it is hard to conceive a world without banks, stock markets, and their influence on the
economy, some studies consider these have a minor role in shaping the economic prosperity of a
country. A treatise on the review of development economics by Stern (1989) even ignores
mentioning finance in a section that lists only ‘omitted’ topics. A careful analysis by Stiglitz
(1985, 1994) argues that liquidity in stock market will not enhance the efficiency of corporate
governance or acquiring information about firms. It is argued that when the information about
firms is readily available in the stock market investors will lose incentive to explore more about
firms. And that risk diversification across borders actually reduces saving rates and leads to
stagnated economic growth (Devereux and Smith, 1994). Moreover, some analyses e.g. Sheilfer
and Summer (1988); Morck, Sheilfer and Vishny (1990); observe easing of corporate mergers in
stock market may hurt the economic growth. Volatility that characterises the financial world
particularly stock market is one of the foremost reasons that explain the scepticism expressed by
a strand of research. It is 4 interesting to note that some empirical studies e.g. Singh (1997, 1998);
Nagraj (1996); and Nagaishi (1999) conclude in Indian context that stock market growth does
not contribute to gross domestic savings, hence bear negligible or negative consequence on
growth. Singh (1997) also questions the efficiency allocation of investment resources by stock
market in developing countries. Following all this argument it can be said at the outset that stock
market development along with the wider financial system is a complicated and multifaceted
concept and there is no one simple measure by which one may capture all the major aspects of
stock market development and its positive impact on the economy (Demirguch-Kunt-Levine,
1996a). Although seminal work on finance was done much earlier it was Levine (1991,1997);
King and Levine (1993a,1993b); Levine and Zervos (1996,1998); Demirguch-Kunt and Levine
(1996); Beck and Levine (2003); who contributed a series of studies that advocated and showed
empirical evidence through cross-country data analysis that stock market development along with
other financial intermediaries were positively associated with economic growth and opposed to
the notion that banks are substitute to equity markets as in Arestis et al. (2001). A theoretical
analysis by Boyd and Smith (1996) also establishes the idea that bank and stock market are rather
compliments as their services often overlaps contrary to Singh (1997b). Stock market ensures
efficient allocation of capital; hence it facilitates investment that eventually leads to growth
(Paudel, 2007). Through global risk diversification and increasing liquidity it establishes wiser
 Page |6

investment decisions and develops corporate governance (e.g. reducing principal-agent

problems)10; hence caters for wider scope of economic development (Vector, 2005). 3 It is stated
earlier that banks and stock markets act as compliments, so a welldeveloped banking system will
help stock exchange boost economic development (Rousseau and Wachtel, 2000). It can be
shown that researches vary on the role and impact of stock market on development. However,
strong evidence seems to support the idea that stock markets are an important vehicle for
development and developed and emerging economies generally possess well-functioning stock
markets (Demirguch-Kunt and Levine, 1996b). This discussion, as a core argument of this study,
will help us advance the hypothesis that CSE has a positive impact on Bangladeshi economy
which we are going to do in the course of analyzing its functions in the next couple of sections.
Hossain & Kamal (2010) found that the stock market development strongly influences the
economic growth in Bangladesh economy, but there is no causation from economic growth to
stock market development. Rahman and Rahaman (2011) focused on the growth of Bangladesh
stock market over time. The findings of their study suggest that growth of stock market of
Bangladesh till not stable. They also conclude that Bangladesh stock market is still at an early
stage of its growth and stock market size is small. Haque & Fatima (2011) reflected that none of
the dynamic models is effective one to identify the stock market linkage to per capita growth rate
in Bangladesh. The implication is that stock market in Bangladesh does not have any influence
on the real economic activity. The results did not lead support to other studies and theory that
stock market has direct association with per capita growth rate. The main reasons are identified
that fund mobilised by stock market in Bangladesh is still in transitional period and it is very
small in relation to its economy. From the review of literature, it appears that knowledge gaps
largely exists in the field of analysis and evaluation of the growth, performance and efficiency of
stock market in Bangladesh. This study attempts to fill up the existing knowledge gaps.
Measuring growth, efficiency and performance level of stock market needs some indicators and
this study used some yardstick to understand market efficiency and performance.
 Page |7

2.2 Stock Market

A stock market, equity market, or share market is the aggregation of buyers and sellers
of stocks (also called shares), which represent ownership claims on businesses; these may
include securities listed on a public stock exchange, as well as stock that is only traded privately,
such as shares of private companies which are sold to investors through equity
crowdfunding platforms. Investment in the stock market is most often done
via stockbrokerages and electronic trading platforms. Investment is usually made with
an investment strategy in mind. Many large companies have their stocks listed on a stock
exchange. This makes the stock more liquid and thus more attractive to many investors. The
exchange may also act as a guarantor of settlement. These and other stocks may also be traded
"over the counter" (OTC), that is, through a dealer. Some large companies will have their stock
listed on more than one exchange in different countries, so as to attract international investors.
Bangladesh has two stock exchanges, Dhaka Stock Exchange (DSE), established in 1954 where
trading is conducted by computerized automated trading system and Chittagong Stock Exchange
(CSE), established in 1995 which is also conducted by computerized automated trading system.
All exchanges are self-regulated, private sector entities which must have their operating rules
approved by the BSEC.

2.3 Stock Market development & economic growth

Stock market is an indicator of an economy financial health. It indicates the mood of investors in
a country. As such, stock market development is an important ingredient for growth. Define size
as the share of market capitalization over GDP and liquidity as volume of share traded over GDP.
Stock market development positively affect economic growth both in the short run and long run.
So, measures of stock market development namely SIZE and LIQUIDITY.SIZE is denoted
as market capitalization as a percentage of GDP. The assumption behind this measure is that
overall market size is positively correlated with the ability to mobilize capital and diversify risk
on an economy-wide basis.
 Page |8

2.4 Dhaka Stock Exchange (DSE)

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. In 2020, the combined market
capitalization of listed companies on the Dhaka bourse stood at over $46 billion and number of
listing 750.

2.5 Chittagong Stock Exchange (CSE)

Chittagong Stock Exchange (CSE) was established on 1st April, 1995. The exchange is located in
the Agrabad business district in downtown Chittagong. As a company limited by guarantee and as
a not-for-profit organization. Initially the founding members were 70 which were gradually
increased to 148. CSE was established with the broad objectives to create an effective, efficient
and transparent market atmosphere of international standard to save and invest in Bangladesh in
order to facilitate the competent entrepreneurs to raise funds and accelerate industrial growth for
overall benefit of the economy. Since then, CSE revolutionized the entire capital market of
Bangladesh. It spearheaded many rules and regulations, implemented automation, innovated new
concepts, and led the whole capital market as the vanguard of development. It has a
combined market capitalization of over US$ 38 billion as of 2020 and number of listing 250.

2.6 Market Capitalization

Market capitalization, commonly called market cap, is the market value of a publicly traded
company's outstanding shares. Market cap only reflects the equity value of a company. A firm's
choice of capital structure has a significant impact on how the total value of a company is allocated
between equity and debt. A more comprehensive measure is enterprise value (EV), which gives
effect to outstanding debt, preferred stock, and other factors. Market capitalization is used by the
investment community in ranking the size of companies, as opposed to sales or total asset figures.
 Page |9

It is also used in ranking the relative size of stock exchanges, being a measure of the sum of the
market capitalizations of all companies listed on each stock exchange. In performing such
rankings, the market capitalizations are calculated at some significant date, such as June 30 or
December 31. Market cap is given by the formula, MC= N*P number of shares outstanding,
and P is the closing price per share.

2.7 Stock turnover

Stock turnover is a financial ratio showing how many times a company has sold and replaced
inventory during a given period. A company can then divide the days in the period by the Stock
turnover formula to calculate the days it takes to sell the inventory on hand. Calculating stock
turnover can help businesses make better decisions on pricing, manufacturing, marketing, and
purchasing new inventory. A slow turnover implies weak sales and possibly excess inventory,
while a faster ratio implies either strong sales or insufficient inventory.

2.8 Stock Index

A stock index, or stock market index, is an index that measures a stock market, or a subset of the
stock market, that helps investors compare current price levels with past prices to calculate market
performance. Some indexes have values based on market-cap weighting, revenue-weighting, float-
weighting, and fundamental-weighting. Weighting is a method of adjusting the individual impact
of items in an index. The two stock exchanges in Bangladesh DSE & CSE indices are-
DSE 30 Index, Dhaka Stock Exchange Broad (DSEX), DSES Index
CSE30, CSCX, CASPI, CSI, CSE50
CSE Indices:
CSE30
CSE-30 index is very useful for providing a historical comparison of returns on money invested
in the stock market against other forms of investments. It can also be used as a standard against
which to compare the performance of an equity fund, the CSE said in a statement.
CSCX (Selective category Index)
CSCX (CSE Selective Categories' Index) comprised A, B & G category companies. This index
includes all but not the Z category companies. This also excludes the companies/scripts which are
debt securities, mutual funds, suspended for indefinite period and non-traded for preceding six
months of review meeting. The index will be reviewed in the Index Committee Meeting after
every six months like other two indices of CSE.
 P a g e | 10

CASPI (All Price Index)

The only index the CSE has been maintaining since 10th October 1995 is an ALL SHARE PRICE
INDEX using Chained Panache method. This index was subject to unusual ups and downs and
without a distinct base value. Therefore, in need of a clean slate CSE finds the date 1 January 2000
is the best date to start new Indices. An All-Share Price Index with new formula and base date
30th December 1999 (the last day of the year) and new base index of thousand (to mark the
millennium) will replace the existing one and A completely new Selective Index incorporating 30
scripts with base date 30th December 1999 and base index 1000.

2.9 GDP at market price

Gross domestic product at market prices aims to measure the wealth created by all private and
public agents in a national territory during a given period. The most key aggregate of national
accounts, it represents the end result of the production activity of resident producing units.
There are three ways of measuring GDP at market prices:
• The production approach, as the sum of added values of all activities which produce goods
and services, plus taxes and minus subsidies on products;
• The expenditure approach, as the sum of all final expenditures made in either consuming
the final output of the economy, or in adding to wealth, plus exports and minus imports of
goods and services;
• The income approach, as the sum of all incomes earned in the process of producing goods
and services (payment of salaries, gross operating margin and mixed income) plus taxes on
production and imports and minus subsidies.

2.10 Ratio of turnover to market capitalization

Turnover ratio is the total value of shares traded during the period divided by the average market
capitalization for the period. Average market capitalization is calculated as the average of the end-
of-period values for the current period and the previous period.

2.11 Growth Rate

Growth rates are used to express the annual change in a variable as a percentage.Growth rates can
be beneficial in assessing a company’s performance and to predict future performance. Growth
rates are computed by dividing the difference between the ending and starting values for the period
being analyzed and dividing that by the starting value.
 P a g e | 11

CHAPTER 3
Methodology
 P a g e | 12

3.1 Methodology Research Design

This study employed quantitative research approach. A quantitative approach is relevant because
it employs statistics, which is a comparative methodological discipline that uses mathematical
ideas for descriptive data analysis, point inference, graphical representation and comment on the
financial health.

3.2 Sources and Types of Data

The study employed quantitative research approach based on secondary data Annual Reports and
Monthly Reviews of Chittagong Stock Exchange Ltd, Annual Reports of Securities and Exchange
Commission, Investment Corporation of Bangladesh are the main sources of secondary data. In
addition, CSE memorandam2015 to 2020, Capital Market Development in Bangladesh: A Sector
Reform Perspective, Resumes of the Activities of Financial Institutions of Bangladesh, Annual
Reports and other necessary papers of the listed companies of CSE and other related organizations
are also viewed

3.3 Research Methods

This study used a descriptive CSE five years financial performance analysis to measure, describe
and analyze the financial performance of listed securities in Bangladesh during the period 2015
to 2020. Moreover, to examine whether the difference in financial performance of the sector
wise listed securities during the impact of covid-19.
 P a g e | 13

CHAPTER 4
Data Analysis
 P a g e | 14

A) Number of Listed Securities in CSE

The second indicator of market size is the number of companies listed. The rationale of including
this measure is that as the number of listed securities increases from year to year, available securities
and trading volume also increases. The table below shows the number of listed companies in
Chittagong Stock Exchange.
Table-1
Year Number of Listed Securities % Growth
2010 232
2011 238 2.59
2012 251 5.46
2013 265 5.58
2014 276 4.15
2015 295 6.88
2016 299 1.36
2017 303 1.34
2018 312 2.97
2019 326 4.49
2020 338 1.84
Descriptive Statistics
Mean 285
Standard Deviation 35.34685276
12.40%
Coefficient of variation

From the above Table-1 it is observed that CSE Number of listed securities was 232 of the year 2010 but it
has increased 338 at the end of last year 2020. Again, its growth rate decreased to 1.84 percent in the last
year from 4.49percent in the previous year 2019. We also find that the descriptive statistics mean, standard
deviation, coefficient of variation. So the table show that Number of listed securities in CSE increased
gradually year by year. This is the good sign during the pandemic situation COVID-19 for the development
of the share market of our country.
 P a g e | 15

400
350
300
250
200
150
100
50
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Number of Listed Securities % Growth

From the graph we easily evaluate that the number of listed securities are increasing from year to
year and this is the good sign for the stock market.

B) Number of Listed Mutual Fund in CSE

Table -2
CSE: Number of Listed
Year Mutual Fund % Growth
2010 26.00
2011 35.00 34.62%
2012 41.00 17.14%
2013 42.00 2.44%
2014 41.00 -2.38%
2015 41.00 0.00%
2016 36.00 -12.20%
2017 35.00 -2.78%
2018 37.00 5.71%
2019 37.00 0.00%
2020 37.00 0.00%
Descriptive Statistics
Mean 37.09
Standard Deviation 4.504543161
Coefficient of variation 12.14%

From the above Table-2 we can see that CSE Number of listed mutual fund was 26 of the year 2010 but it
has increased 42 at year 2013 but in year 2016 to 2020 it was gradually decreased. Again, Its growth rate
were fluctuated sometime it was increased and sometimes it was decreased. In the last year 2020 growth
rate were decreased to 0.00% because in year 2017 to 2020 the number of mutual fund were constant. And
we find that the descriptive statistics mean , variance, and coefficient of variation.
 P a g e | 16

45.00 40.00%
40.00
30.00%
35.00
30.00 20.00%
25.00
10.00%
20.00
15.00 0.00%
10.00
-10.00%
5.00
0.00 -20.00%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

CSE: Number of Listed Mutual Fund % Growth

Form the graph we observed that the numbers are become constant and that are not changing that are
gradually fluctuate in year 2018 to 2020.

C)Price index of listed securities in CSE (Million TK)

Chittagong Stock Exchange (CSE) determines three stock indices- CSE All Share Price Index, CSE-30
Index, CSCX Index. The table below shows the monthly basis change in all share price index of Chittagong
Stock Exchange (CSE) in the month Dec 2019 to Nov 2020-

Table -3

All % % %
Monthly Share Growth Growth Growth
Basis (Dec19 Price CSE-30 CSCX
to Dec20) Index Index Index
Dec-19 13505.70 11439.82 8187.91
Jan-20 13586.40 0.60% 11676.85 2.07% 8235.90 0.59%
Feb-20 13442.96 -1.06% 11912.38 2.02% 8332.98 1.18%
Mar-20 11328.00 -15.73% 9975.51 -16.26% 6859.90 -17.68%
May-20 11469.03 1.24% 10320.39 3.46% 6752.29 -1.57%
June-20 11332.59 -1.19% 9925.12 -3.83% 6862.14 1.63%
July-20 11957.06 5.51% 10389.29 4.68% 7250.15 5.65%
Aug-20 13908.14 16.32% 12052.97 16.01% 8400.67 15.87%
Sep-20 14167.23 1.86% 11790.99 -2.17% 8507.46 1.27%
Oct-20 13824.13 -2.42% 11370.18 -3.57% 8319.75 -2.21%
Nov-20 13991.43 1.21% 11207.94 -1.43% 8247.06 -0.87%
 P a g e | 17

Descriptive Statistics
13175.47 11207.33 7946.65
Mean
Standard
Deviation 1348.61 850.54 822.00
Coefficient of
variation 10.24% 7.59% 14.02%

From the above Table-3 it is observed that CSE all share price index was 13505.70 in the December month
of the year 2019 but it has increased to13991.43 at the end of last month November 2020. But it fell in
during the month March 20 to June 20 decreased drastically. Although its rate fluctuating from month to
month. Again, its growth rate increased to 1,21 percent in the last month from -2.42% percent in the
previous month of the year 2020. Similarly, the cse 30 index and cscx index were fluctuated month to month
sometimes it was increased and sometimes it was decreased.so the growth rate of two index were decreased
at the end of the last month. Again,we have found that the descriptive statistics of the price index where
mean, standard deviation and coefficient of variation.

D) Sector wise index of Listed Securities (Million TK)

Table -4

Sl Sector Index
2020 2019 % Growth
1 Life Insurance 70938.449 101567.31 -30.16%
2 General Insurance 7414.135 8910.95 -16.80%
3 Taxtile & Clothing 1142.871 2072.36 -44.85%
4 Pharma & Chemical 25268.976 34451.1 -26.65%
5 Foods & Allied 10,384 17160.09 -39.48%
6 Cement 3169.518 4383.7 -27.70%
7 Eng. & Electrical 3599.467 6072.12 -40.72%
8 Leather & Footwear 4267.797 6968.69 -38.76%
9 Services & Property 1207.769 1750.95 -31.02%
10 Papers & Printing 567.753 904.39 -37.22%
11 Energy 7841.422 10906.06 -28.10%
12 Mutual Funds 4487.408 5428.94 -17.34%
 P a g e | 18

13 Bank 36747.891 51947.07 -29.26%

14 Ceramic 478.623 689.73 -30.61%
15 ICT 7859.941 10269.25 -23.46%
16 Leasing & Finance 12901.086 20782.32 -37.92%
17 Telecommunication 1287.927 2159.76 -40.37%
18 Miscellaneous 6553.937 10899.87 -39.87%

From the above table we can see that, comparison between the two years 2019 to 2020. In the year 2020,
the sector wise index had fallen desperately and growth rate changing with negative value due to the impact
of Covid -19.

120000 0.00%
-5.00%
100000 -10.00%
80000 -15.00%
-20.00%
60000 -25.00%
-30.00%
40000 -35.00%
20000 -40.00%
-45.00%
0 Ceramic -50.00%

ICT
Pharma & Chemical

Miscellaneous
Foods & Allied

Cement

Energy

Mutual Funds

Bank
General Insurance

Taxtile & Clothing

Services & Property

Life Insurance

Papers & Printing

Leasing & Finance

Telecommunication
Eng. & Electrical

Leather & Footwear

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

2020 2019

From the graph it has been observed that the sector wise price indices desperately fallen in the last year
2020. So, comparing the last year and the previous year the growth rate also decreased.
 P a g e | 19

E) Sector wise financial performance of Listed Securities 2019-2020

Amount (Million TK) Table-5

Sector No of No of No of Turnover % of P/E

Companies Contract Shares(000) Mn.Tk Total Ratio
Turnover (June20)
1 Life Insurance 12 6,695 9,730.53 643.59 1.21 -
2 General Insurance 30 41,234 73,730.33 1,986.46 3.74 10.34
3 Taxtile & Clothing 52 263,475 322,645.85 4,744.30 8.94 11.72
4 Pharma & 27 129,357 154,153.52 6,778.23 12.97 12.60
Chemical
5 Foods & Allied 12 23,709 30,516.83 1,738.14 3.27 18.11
6 Cement 7 35,412 23,095.09 1,045.40 1.97 20.98
7 Eng. & Electrical 33 181,745 159,316.76 4,716.47 8.89 9.12

8 Leather & 6 34,920 16,198.76 612.26 1.15 13.14

Footwear

9 Services & 8 54,621 55,702.21 938.39 1.77 18.84

Property

10 Papers & Printing 5 31,410 18,333.49 719.46 1.36 28.14

11 Energy 17 97,964 70,426.27 6,888.82 12.98 8.80

12 Mutual Funds 37 34,477 77,524.61 540.29 1.02 12.20

13 Bank 29 123,117 419,300.55 7,401.29 13.94 7.33

14 Ceramic 5 30,368 13,467.01 630.38 1.19 17.59

15 ICT 10 52,518 37,166.50 1,651.82 3.11 22.93

16 Leasing & Finance 22 61,383 89,404.08 1,226.38 2.31 16.57

17 Telecommunication 2 29,879 5,399.41 1,044.77 1.97 9.39
18 Miscellaneous 15 107,630 99,297.25 9,755.86 18.38 15.60

19 Corporate Bond 2 2,721 5.19 15.85 0.03 ---

From the above table, we can easily evaluate the performance of CSE. From 2019 to 2020 Taxtile &
Clothing number of listed company, number of contract, number of share increased than other sector, and
Miscellaneous sector turnover are higher than other sector. The P/E ratio value in ICT sector higher than
 P a g e | 20

others sector. It means, in every year companies issued new shares for the public. Issued capital and market
capitalization of the CSE increased every year through the era. Higher the market turnover indicates the
higher performance, Market turnover of the CSE fluctuates. It should be gradually increased. Price index
increased gradually this is also good.

F) Market Capitalization of CSE and Contribution to the GDP (In Million

Tk)
Table -6
Market
Market GDP at Capitalization to
Year Capitalization % Growth Market price % Growth GDP
2011 1972423 -------------- 7975387 ------------- 24.73%
2012 1784461 -9.53% 9158288 14.83% 19.48%
2013 2023261 13.38% 10552040 15.22% 19.17%
2014 2606981 28.85% 11989232 13.62% 21.74%
2015 2487493 -4.58% 13436744 12.07% 18.51%
2016 2506113 0.75% 15158022 12.81% 16.53%
2017 3123839 24.65% 17328637 14.32% 18.03%
2018 3123521 -0.01% 19758154 14.02% 15.81%
2019 3293302 5.44% 22504793 13.90% 14.63%
2020 2447567.1 -25.68% 25424826 12.98% 9.63%
Mean 2536896.11 15328612.3 17.83
Standard
Deviation 4.10
519152.0792 5838285.838
Coefficient of
variation 20.46% 38.09% 23%

In the above table CSE market capitalization showed growth rate were fluctuate in year to .but the share of
CSE market capital is also decreasing in the last year 2020 The highest market cap rate is 3293302 in the
year 2019 and the highest GDP rate also higher than the other year during 2017. Moreover, we have found
the descriptive statistics of CSE where the market cap, GDP, Market cap to GDP, mean. standard deviation,
and coefficient of variation. Therefore, from the above Table we has been observed that market
capitalization to GDP ratios has decreased 9.63% in the year 2020.
 P a g e | 21

30000000

25000000

20000000

15000000

10000000

5000000

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Market Capitalization GDP at Market price

From the graph it has been observed that GDP rate at market price is also increasing from year to year.So
histogram of 2020 shows the highest GDP rate. But the market cap in CSE are not changing in year to year
its rate also fluctuate. In the last year 2020 we see that the market cap have decreasing.

G) Ratio of turnover to Market Capitalization, CSE (Million Tk)

Market capitalization, turnover and ratio of turnover to market capitalization of Chittagong Stock Exchange
are shown in the following Table- Table -7

Ratio of Turnover
Market to Market
Year Capitalization % Growth Turnover % Growth Capitalization
2011 1972423 186337 9.45
2012 1784461 -9.53% 116905 -37.26% 6.55
2013 2023261 13.38% 99038 -15.28% 4.89
2014 2606981 28.85% 97482 -1.57% 3.74
2015 2487493 -4.58% 88472 -9.24% 3.56
2016 2506113 0.75% 77376 -12.54% 3.09
2017 3123839 24.65% 148105 91.41% 4.74
2018 3123521 -0.01% 86357 -41.69% 2.76
2019 3293302 5.44% 64986 -24.75% 1.97
2020 2447567.1 -25.68% 61728 -5.01% 2.52

Mean 2536896.11 102679 4.33

Standard
Deviation 519152.0792 38745.70409 2.25
Coefficient
of
variation 20.46% 37.73% 51.88%
 P a g e | 22

Turnover to Market capitalization of the CSE is 9.45 in the year 2011 and decreasing turnover results is
declining ratio up to 2019 and afterwards 2017 turnover to market capitalization is increasing turnover but
rate of capitalization is higher than rate over turnover increasing till 2020. In the year 2011 the ratio of
turnover to market capitalization of Chittagong Stock Exchange was 9.45 which is highest compared to all
other years of the above table. Again we have found the descriptive statistics of the ratio of turnover to
market capitalization in CSE where mean is 4.33, standard deviation is 2.25, and coefficient of skewness is
51.88%.

H) Performance Summary of CSE Trading Statistics

Table -8

Category 2016 2017 2018 2019 2020

Listed Securities (no) 298 303 312 326 338

MarketCapitalization (Mn.BDT) 2,506,113 3,123,839 3,123,521 3,293,302 2,447,567.10

VolumeTraded (Shares) 1,255,327 4,032,214 3,506,210 2,474,665 1,675,414

Volume Traded (BDT) 35,716,245 118,075,277 109,850,562 848,00,127 53,078,171

Number of Trades 1,670 3,883 2,791 2,462 1,343

Total Trading Days 125 239 246 238 203

Average Volume of Shares Traded per day 10,042 16,871 14,252 10,398 8,253
(Shares)

Average Volume per Trade 752 1,038 1,256 1,006 1,247

Average Value per Trade in 21,386 30,401 39,358 34,358 39,532

(BDT.)

In the table we see that, CSE trading statistics from the year 2016 to 2020 increasing year by year and
market capitalization and volume traded share gradually decreasing. fluctuates days fluctuate within nine
days. In the market days, new listing number of securities changed positively from 2016 to 2020 except
the year 2016. Number of the share traded also increased over the period of time and this is the good sign
for the market. The Average Volume of shares per day and per trade fluctuates year to year but average
 P a g e | 23

value per trade in BDT are increased in year 2020.The trading system at CSE was known as CHITTRA at
that time. It connected major cities of Bangladesh enabling all members to trade nations wide
simultaneously with ease and efficiency. CHITTRA provided a screen based, quote-driven trading facility.
Investors were allowed to quote an expected price in their buy/sell orders. CHITTRA automatically
matched the best prices.

I)Five Years Financial Highlights of CSE

Table-9

Particular 2018- % 2019- %

2015-16 2016-17 % Growth 2017-18
s 2019 Growth 2020 Growth

Total Assets
7,618.2 8,218.5
(BDT in 8,091.60 6.21% 8,377.62 (1.90%) 8,025.29 (2.35%)
Million)
6 1
Total
Liabilities
518.64 644.35 24.24% 963.62 731.1 (24.13%) 536.33 (26.64%)
(BDT in
Million)
Net Assets
7,099.6 7,487.4
(BDT in 7,447.24 4.90% 7,414.00 0.99% 7,488.95 0.02%
Million)
2 1
Revenue
(BDT in 206.49 282.51 36.82% 315.13 346.78 10.04% 342.76 (1.16%)
Million)
EBITDA (BDT
(19.3) 58.3 (402.07%) 86.83 104.23 20.04% 113.81 9.19%
in Million)
Operating
Profit (BDT (72.55) 6.91 (109.52%) 36.52 53.76 47.21% 64.17 19.36%
in Million)
Net Profit
After Tax
332.15 347.62 4.66% 347.47 390.67 12.43% 318.81 (18.39%)
(BDT in
Million)
NAV Per
11.19 11.74 4.92% 11.68 11.8 1.03% 11.8 0.00%
Share (BDT)
EPS (BDT) 0.52 0.55 5.77% 0.55 0.62 12.73% 0.5 (19.35%)

In the above table show the financial position of the CSE from the year 2015 to 2020. In the table
we see that total Asset and Liabilities of the CSE fluctuates in every year from 2015 to 2020. But
in year 2020 Total liabilities decreased amount of the total expenditure of CSE, net asset remain
constant in every year. Sometimes it was better than the previous year; few times it was worse
than the previous year. The revenue of CSE increased gradually in every year to the year. The
 P a g e | 24

year 2020 ended with a net profit after tax of Tk318.81 million which was 71.86 million lower
than that 2019 and the operating profit increased by tk10.41 than that 2019.the earning per share
EPS also fluctuate every year but in 2020 it was lower than the previous year After all, although
net profit decreased in the year 2020 than the year 2019, but performance through the year was
good.

J) CSE five years Total Asset, Total Equity, Total Labilities and Growth Rate
(Amount in BDT)

% Total % Total %
Year Total Asset Growth Equity Growth Liabilities Growth
2016 7618264275 ------------- 7099623060 ----------- 518641214 -----------
2017 8091595762 6.21% 7447243559 4.90% 644352200 24.24%
2018 8377621343 3.53% 7414000569 -0.45% 963620771 49.55%
2019 8218510976 -1.90% 7487406443 0.99% 731104532 -24.13%
2020 8025285529 -2.35% 7488953192 0.02% 536332336 -26.64%
Descriptive Statistics
Mean 8066255577 7387445365 678810211
Standard
Deviation 284230198.6 163873989.8 180964884.8
Coefficient
of
variation 3.52% 2.22% 26.66%

In the above table we can see that the total asset are fluctuating year to year sometimes it is
increasing and sometimes it is decreasing and the growth rate also depend on changing the value
of total asset the higher rate in total asset in the year 2017. The total equity are increasing in the
year 2019 to 2020 but in year 2018 the total equity lower and the growth rate also lower. The total
liabilities fell in the year 2019 to 2020 but in year 2017 there are higher rate and the growth rate
also become higher. We also find that the descriptive statistics of the total asset, liabilities and
owners equity.
 P a g e | 25

CHAPTER-5
Findings, Recommendations
& Conclusion
 P a g e | 26

5.1 Findings & Recommendations

From the study of evaluating the growth and performance of Bangladesh stock market over the
last ten years in terms of some commonly used indicators of stock market development our analysis
reveals that the Bangladesh’s stock market is growing in terms of market capitalization to GDP,
turnover ratio, turnover to GDP and turnover to capitalization showed market is not still stable
enough. Number of listed securities showing an increasing trend, from 2019 to 2020 almost every
year it had increased. The number of mutual funds were gradually increasing but in year 2016 to
2020 the number were slowly decreased. The numbers are become constant and that are not
changing in year 2018 to 2020.In December 20 price indices increased sharply in compare to year
2019. But it fell in during the month March 20 to June 20 decreased drastically. Although its rate
fluctuated in month by month. So, we can say that price indices show, our capital marker is highly
instable. To show excellent performance, it needs to be stable. SEC should work for making stable
stock market, which will attack the small investors to come forward to invest in stock market.
Studying the CSE annual report and find that the initial public offering fluctuates, number of listed
companies in CSE increased from 2011 to 2020. Issued capital and market capitalization of the
CSE increased every year through the era. Market turnover of CSE fluctuate over the year, CSE
should try to increase it gradually. Chittagong Stock exchange is not stable enough because of the
following reasons:

• Frequent changes in regulation of stock exchange by SEC;

• Unusual behavior of the money market;

• Lack of investment opportunity in the industrial sectors;

• Demand of the share is higher than the available supply;

• Lack of awareness about stock market behavior of small investors;

• Profit making motives of institutional investors.

• Lack of govt. initiative to control unusual transaction in CSE

So, we can say that performance of the Chittagong stock exchange is the most important factor for
the development of the country. Government should take necessary steps to develop our capital
market to develop the country.
 P a g e | 27

5.2 Conclusion
The uncertainty of living due to the gravest threat of feared disease jeopardizing the world’s overall
economy as well as the global stock market. In the pandemic situation, taking on non-therapeutic
precautionary means, such as, travel bans, remote working, to maintain social distancing which is
quite cumbersome from the perspective of Bangladesh, has driven economic depression
inescapable. Since the Corona-virus vaccine will not come any time soon, it’s become a challenge
for the government to maintain the health of the nation and overcome economic disparity
simultaneously. At the end of the study, it is understood that there is no way to improve our
economy without augmenting the industrial sector from the present situation. At the beginning of
the new millennium signs of improvement in the stock market are seen and it is evident that it has
started contributing to the development of an alternative source of industrial financing gradually.
CSE’s contribution to this gradual change is immense which cannot be ignored. CSE’s relentless
endeavour since its establishment to develop an active and vibrant capital market in the country
has become a landmark of success. CSE’s continuous efforts in the pursuit of developing a mature,
stable and an expanded stock market will always be there in its mission and vision. CSE has been
performing different investment related jobs, and undertaking and implementing different
programs in order to accomplish its objectives. The study shows that CSE develop capital market
of Bangladesh by developing many tools in the capital market which are previously discussed, the
contribution of the CSE is indispensable in the industrialization of the country, CSE create
employment opportunity in the country. Since the establishment to the present situation CSE’s
gradual development indicates a bright future of the capital market as well as the economic growth
of Bangladesh. When confidence is restored the total value traded will increase significantly thus
raising stock market capitalization which ultimately will increase the economic growth.
 P a g e | 28

5.3 References
1. Ahsan, S. M. et al. (2006), Financial Sector Review, 2(1), Bangladesh Bank.

2. Annual Report, Chittagong Stock Exchange Ltd(2015-2020)

3. Arestis, P, Demetriades, O. P. and Luintel, K. B. 2001. ‘‘Financial Development and

Economic Growth: The Role of Stock Markets.’’ Journal of Money, Credit and Banking, Vol.
33, No. 1 (Feb., 2001), pp. 16-41 Published by: Blackwell Publishing.

4. “Bangladesh Capital Market”- A publication of Chittagong Stock Exchange.

5. “CSE-30, The profile of CSE-30 Companies”- Published on December, 2019.

6. Bangladesh Economic Survey, 2018, various issues.

7. Portfolio of Chittagong Stock Exchange.

8. “Share Bazar”-Monthly Magazine on Share Market, Published on February,2015.

9. Website www.bangladeshstockmarket.com

10. https://en.wikipedia.org/wiki/Dhaka_Stock_Exchange

11. https://en.wikipedia.org/wiki/Chittagong_Stock_Exchange

12. https://www.cse.com.bd/home/trading

13. https://www.ceicdata.com/en/bangladesh/chittagong-stock-exchange-number-of-listed-
companies-and-shares/cse-number-of-listed-securities