Stock Market in

Bangladesh
CHALLENGS AND PROSPECTS

Presented to Muhammad Intisar Alam

Introduction

• Financial markets refer broadly to any marketplace where the

trading of securities occurs.
• Stock market is a part of financial market.
• Where buyers and sellers engage in trade of financial securities
like bonds, stocks, etc. is called Stock Market.
• The capital market is the engine of growth for an economy
Financial Markets
Financial markets play a vital role in facilitating the
smooth operation of capitalist economies by allocating
resources and creating liquidity for businesses and
entrepreneurs. World widely we can see - Over-the-
Counter Markets, Bond Markets, Money Markets,
Derivatives Market, Forex Market.
Types of Financial Markets in
Bangladesh

• Money Markets
• Taka Treasury Markets
• Capital Markets
• Foreign exchange Market
Overview of financial system of Bangladesh

Informal Sector
Formal sector Semi Formal Sector

Includes Microfinance, Includes those institutions

Insurance, Banks and which are regulated but do not Includes private
NBFIs fall under the jurisdiction of intermediaries which
Central Bank, Insurance are completely
Authority, Securities and unregulated.
Exchange Commission or any
other enacted financial
regulator.
Capital Market
Capital market is also known as securities market is a
trading market that collect capital from investors and
makes them available to companies and the government
for development of project.
Instruments of Capital
Market

• Bond

• Stock Market
Capital Market in
Bangladesh
 Smallest in Asia
 Third largest in the South Asian region.
 Two full-fledged automated stock exchanges in
Bangladesh
 Dhaka Stock Exchange (DSE)
 Chittagong Stock Exchange (CSE)
How does Stock Market
Operate?

Stock Company Issue Stock Price

Stock
To raise capital Through an
Financial
For the auction process
instrument that
development and Buyers and sellers
represents
growth. place bids and
ownership
offers to buy or
sell.
 Stock
Market

Primary Secondary
Market Market

Stock
IPO
Exchange
Process of trading

Open a Beneficiary Account or BO Account

Trade through online or Third party

Supply and Demand

More buyers for a specific stock then price up.
More sellers of the stock than buyers, the price will
trend down.

BSEC
Protecting the interests of investors in stocks
Regulating the share market
Conducting research and publishing information
 Dhaka Stock Exchange
(DSE)
• Incorporated as East Pakistan Stock Exchange
Association Ltd on 28 April 1954.
• Renamed as Dacca Stock Exchange Ltd on 13 May
1964.
• In 1976 trading restarted in Bangladesh
• Now 22 industrial sectors in DSE
• Accommodate 578 listed companies
• Market capital US$47.34billion in 2018
Stock speculators started 2019 bearing in mind the end
goal of an upward market heading
the year finished on noticeable market discouragement
Throughout the year no area separated from non-
disaster protection and IT created positive returns for
speculators

The Bangladesh DSE General Index expanded 464

focuses or 10.42% since the start of 2020, as indicated
by exchanging on an agreement for contrast (CFD)
that tracks this benchmark list from Bangladesh .
Chittagong Stock Exchange
(CSE)

• CSE consolidated on first April 1995

• Located in the Agrabad,Chittagong
• Formally opened on November 4, 1995
• Number of listed companies 288
• Domestic market capitalization 41028 million US$
 • CSE trying to regain market share
• CSE Competition with DSE
• CSE more than 95 percent turnover
originated from the square market- where
purchasers and merchants executed in the
public market
• Volume information was accounted for at 347.766 Unit
in Sep 2020
• This records an expansion from the past number of
275.473 Unit for Aug 2020
• Turnover: Volume information is refreshed month to
month, averaging 118.257 Unit from May 1999 to Sep
2020, with 256 perceptions
Challenges of stock
market in Bangladesh
1.Absence of regulatory measures.
2. Discovery of price also becomes very difficult.
3.Difficulties due to large pre-IPO capital rules.
4.Weak activities of merchant banks .
5.Only retail investors can participate in the IPO.
 Stock market scams
The market went up 62% in 2009, and 83% in 2010, but then
went down 10% in January 2011.

On 24 January 2019 the index declined to 4,782 points and

the capital stood at TK 3,600 billion.
Reasons of poor performance of
stock exchange
1.Low per capita income
2.The lower rate of dividend
3.Low savings
4.Lack of awareness
5.Lack of institutional investment
 Effects of covid-19 on stock market in
Bangladesh
1.Many people lost their jobs
2.Income declined drastically
3. Brokerage houses faced huge losses
4.Government lost tax from the stock market.
$348 Billion $2173
Economy Size GDP per Capita
The Opportunities

Overlooked
Looking Towards the Future
Bangladesh Institute of
Capital Management
A Place to Learn

A Place to Grow

A Place to Be Financially Literate

E-
Modern Trading Apps
TRADING

Upstox PRO App 5Paisa Mobile App FYERS Market App

 SUGGESTIONS TO IMPROVE THE
ACTIVITIES OF STOCK MARKET
Controlling
Monitoring Computerization Publish Reports Kerby market

Monitoring system to control Full computerized system for Publishing annual reports Controlling & abolishing
price manipulation, settlement of transactions with actual and proper Kerby market from premises
malpractice's and inside information that can ensure of stock market.
trading the interests of investors
MAJOR FUTURE PROSPECTS THAT WILL
CHANGE THE STOCK MARKET
Launching E-Trade Apps Direct Listing Method
Government enterprises are going to be
Launching E-Trade Apps will help to listed under Direct Listing Method.
improve vast investment from mass.

Telecom Enlisting Industry Penetration

Enlisting Telecom Sector Like Robi in a Large companies enlisting in stock
Public IPO . market like Walton
Thank You