Capital Market in Bangladesh
Background of the Market
DSE, the first stock exchange of the land was
incorporated on April 28, 1954, while the second stock
exchange – CSE was established in 1995
 After independence of Bangladesh, trading activities
started in August 1976.
 From 1998 automated screen based trading was
introduced by both the exchanges through LAN and
WAN connectivity and HP non stop trading platform is
providing basic architecture.
Capital Market in Bangladesh
Corporate Structures of the Exchanges
 The Stock Exchanges are registered as Public
Limited Companies under companies Act.
 Presently DSE has 234 outstanding shares
(members) while CSE has 140 shares outstanding.
 The exchanges are Self Regulatory Organizations
and their activities are regulated by
-
Articles of Association
Own set of Rules, Regulations and Bye-laws
Securities and Exchange Ordinance 1969
Securities and Exchange Rules 1987
Other relevant laws.
Capital Market in Bangladesh
Basic Markets
 Public Market : For general trading
 Spot Market : For pre-book closer trading
 Block Market : For bulk volume trading
 Odd lot Market : For odd lot trading
Trading Session
Trading at DSE is performed through a non-stop platform in
following sessions :
Continuous Trading hours
:
10.00 AM to 2.00 PM
Trading day
:
Sunday To Thursday.
Capital Market in Bangladesh
SETTLEMENT & CLEARANCE SYSTEM
Primarily Settlement Period is T+1 and T+3 Days :
All the trades are cleared and settled, as per Settlement
of Stock Exchange Transactions Regulations 1998.
From January 24, 2004 CDS system started
functioning & transactions of all demated Securities
are settled and registered through CDS
A central clearing company is under process to ensure
efficient financial settlement
Capital Market in Bangladesh
Market Standard and Requirements
Disclosure Requirements by the Listed Companies
• Yearly Audited Financial Statement within four months of the year
end.
• Half-yearly Un-audited financial statements within one month of the
first half-year end.
• Price Sensitive disclosures
It is mandatory to follow in preparation of the accounts
• International Accounting Standard (IAS)
• International Standards for Auditing (ISA)
 Corporate Governance
• All the listed companies are required to adopt the Corporate
Governance Guidelines issued by SEC and required by Listing
Regulation
Capital Market in Bangladesh
Featured by: Low Ratio of Market Capitalization to GDP
Country
M.Cap
(US $ bn)
GDP
(US $ bn)
M.Cap
to GDP
ratio
M. Cap to
Transaction
Bangladesh
( DGEN)
5.96
63.73
9.35%
0.17%
India (BSE)
730.00
854.48
85.43%
0.61%
Pakistan
(Karachi SE)
46.69
128.99
36.20%
0.82%
Sri Lanka
(CSE)
8.38
26.18
32.01%
0.22%
Source: IMF World Economic Outlook & Website of Stock
Exchanges of Respective Countries.
Capital Market in Bangladesh
Basic Market Statistics
Total Issued Capital of all listed Securities US $ 2.24 bn
Market Capitalization of all listed Securities US $ 5.96 bn
LISTED SECURITIES
As on April, 2007
=> Companies : 258 ( A – 142 , B - 29, G-1, N-7, Z - 86)
=> Mutual Funds : 14
=> Debentures :
08
=> Govt.T. Bond :
42
All Securities are Distributed in 16 Sectors :
1. Banks 2. Investment 3. Engineering 4. Food & Allied Products 5. Fuel &
Power 6. Jute 7. Textile 8. Pharmaceuticals & Chemicals 9. Paper &
Printing 10. Services & Real Estate 11. Cement 12. IT 13. Tannary Industries
14. Ceramic Industry 15. Insurance 16.. Miscellaneous
Capital Market in Bangladesh
COMPANIES UNDER CDS
Particulars
No.
Securities under the CDBL
153
Companies under the CDBL
111
3
IPO (upcoming)
Market Cap Tk.
in mn
% of total
Market cap
268,654
80.39
---
---
343,315
83.21
Multinational & Joint Venture Companies Listed
Particulars
No.of
company
Market Cap. in
mn
% of total
market cap.
Multinational Companies
12
80319.16
19.86
Joint Venture Companies
6
6101.46
2.25
02/05/ 2002
03/06/ 2002
04/07/ 2002
04/08/ 2002
04/09/ 2002
03/10/ 2002
04/11/ 2002
09/12/ 2002
11/01/ 2003
09/02/ 2003
16/03/ 2003
16/04/ 2003
18/05/ 2003
16/06/ 2003
17/07/ 2003
17/08/ 2003
18/09/ 2003
21/10/ 2003
19/11/ 2003
28/12/ 2003
28/01/ 2004
09/03/ 2004
11/04/ 2004
18/05/ 2004
17/06/ 2004
20/07/ 2004
17/08/ 2004
26/09/ 2004
27/10/ 2004
04/12/ 2004
05/01/ 2005
17/02/ 2005
21/03/ 2005
23/04/ 2005
28/05/ 2005
26/06/ 2005
27/07/ 2005
28/08/ 2005
03/10/ 2005
16/11/ 2005
26/12/ 2005
05/02/ 2006
15/03/ 2006
25/04/ 2006
01/06/ 2006
11/07/ 2006
15/08/ 2006
25/09/ 2006
09/11/ 2006
18/12/ 2006
29/01/ 2007
07/03/ 2007
15/04/ 2007
1610
1900
1410
1700
2002
1810
2006
2003
DSE perform ance from May 2002 to April 2007
1300
810
1100
610
900
410
700
210
500
10
300
DGEN
1010
2004
1210
2005
Trn in mn
Capital Market in Bangladesh
5 YEARS MARKET PERFORMANCE (DSE only)
Trn in mn
DGEN
2100
1500
Capital Market in Bangladesh
Sectoral Market Capitalization as of April 2007
Market
% of total
Capitalisation Tk
in mn(334,207)
Market Cap
177,636.36
53.15
Insurance
9,572.79
2.86
Investment
5,363.74
1.60
192,572.89
57.61
6,765.85
2.02
28,545.39
8.54
9,997.11
2.99
8,661.55
2.59
609.07
0.18
2,959.84
0.89
286.89
0.09
140.81
0.04
30,395.84
9.09
88,362.35
26.43
38,725.99
11.59
1,488.75
0.45
2,028.78
0.61
11,027.82
3.30
53,271.34
15.95
Sector
Financial Sector
Banks
Total
Manufacturing
Foods
Pharmaceuti cal s
Texti l e
Engi neeri ng
Cerami cs
Tannery
Paper & Pri nti ng
Jute
Cement
Total
Service & Miscellaneous
Fuel & Power
Servi ce & Real Estate
IT
Mi scel l aneous
Total
Capital Market in Bangladesh
Sectoral Turnover during 2006
Banks
Investment
Insurance
Total
Engineering
Foods
Jute
T extile
Pharmaceuticals
Paper & Printing
Cement
T annery
Ceramics
Total
Fuel & Power
Service & Real Estate
IT
Miscellaneous
Total
Volume(in mn) Value(Tk in mn)
Financial Sector
76.27
31,123.12
253.69
813.86
9.84
2,525.52
339.79
34,462.50
Manufacturing
16.93
2,427.31
74.42
764.71
0.76
13.47
106.63
2,998.60
77.40
4,869.96
1.04
11.67
20.77
3,567.90
14.13
678.29
0.32
31.21
312.39
15,363.13
Miscellaneous & Service
41.02
11,173.77
6.75
235.63
76.84
2,015.78
55.89
1,810.80
180.49
15,235.98
Turnover %
47.83
1.25
3.88
52.97
3.73
1.18
0.02
4.61
7.48
0.02
5.48
1.04
0.05
23.61
17.17
0.36
3.10
2.78
23.42
Capital Market in Bangladesh
Weighted Average Sectoral P/E during April, 2007
Market PE
15.03
10.66
14.51
13.85
Capital Market in Bangladesh
Dividend of Listed Companies over the Years by Sector
Sector
Bank
Dec 2003
Sector
Cement
Bank
Food & allied
Ceramics
Insurance
Food & allied
Fuel & Power
' Insurance
'Investment
Cement
Engineering
Fuel & Power
' Insurance
'Investment
IT
Jute'
IT
Miscellaneous
Jute'
Service & Real Estate
Miscellaneous
Pharmaceuticals
Service & Real
Estate
Tannery
Textile
Pharmaceuticals
Tannery
Dec 2005
%
December
2005
Dividend
Average
%
December
2006
25.22 0.99
11.14
5.05
8.22
18.25 9.42
8.83
19.38
18.25
20.81
12.44
24.21
24.21
22.24
22.2421.53
8.82
54.44
105.15
32.71
2.92
23.69
Average
Dividend
Dividend %a
December 2003
Average
Dividend %
December 2004
25.94
1.21
3.69
18.84
7.94
19.38
6.21
Engineering
Dec 2004
54.44
18.16
1.01
18.84
Average
6.25
105.15 6.68
13.6
1.56
5.70
10.26
18.16
13.56
13.612.84
12.84
8.92
10.63
5.15
6.15
30.26
2.61
8.57
8.92
18.58
2.61
1.97
16:66
Textile
20.57
5.08
Paper and Printing
0.31
19.58
2.17
7.07
21.12
1.97
20.1
38.56 3.97
2.89
10.6310.46
23.49
2.17 1:79
3.19
20.32
23.65
5.35
20.07 4.76
-
21.12 1.38
25.49
7.54
6.38
2.16
Dec 2006
34.98
35.05
5.99
6.56
25.31
20.31
20.81
12.44
21.53
18.32
32.71
27.92
19.28
18.33
50.39
40.24
22.57
9.33
7.50
2.89
18.96
23.49
22.62
25.49
6.00
5.97
10:79
12.19
16:66
21.61
23.65
7.54
5.08
5.35
4.76
6.38
Capital Market in Bangladesh
Market Development Over the Years
2500
Annual
Turno ver
(Tk. In
million)
2000
Taka
1500
M . cap
(Tk. in
billion)
1000
500
General
Index
0
30.06.03
30.06.04
30.06.05
30.06.06
01.05.07
Capital Market in Bangladesh
Statistics of IPO Subscription
Name of the Issue
Sonar Bangla Insurance
Islamic Finance & Investment
Premier Leasing Int.Ltd.
Progressive Life Insurance
Bergers Paints Bangladesh Ltd.
Pragati Life Insurance
Jamuna Bank Ltd.
S. Alam Cold Rolled Steel Ltd
Lankabangla Finance
BIFC
IPDC
BRAC Bank Ltd.
Prime Islami Life Ins. Com.
Shahjalal Islami Bank
ICB AMCL 1st NRB MF
Total
Public Offer
Taka in mn
90.00
100.00
100.50
45.00
11.60
45.00
386.1
108
90.00
110.95
139.00
500.00
45.00
935.85
100
Public Subs. Over Subscription
Taka in mn
in times
360.56
4.01
1,597.14
15.97
1,059.90
10.55
1,643.58
36.52
1,227.96
105.90
1,734.95
38.55
3896.51
10.09
442.07
4.09
1483.24
16.48
1569.64
14.15
2261.88
15.27
4171.54
7.34
1417.04
30.49
4025.65
4.3
944.56
9.45
2,807.00
27,836.20
US$41mn
US$403mn
9.96
Capital Market in Bangladesh
DIRECT LISTING Provisions
Issuer
Paid up
Capital
Total
Offloading
For General
Public/Ins
Tk.in mn
Tk.in mn
Tk.in mn
Dhaka electric Supply
Co. Ltd. (DESCO)
1,271
317
286
Power Grid Co. of BD.
Ltd.(POWERGRID)
3,643
910
865
Capital Market in Bangladesh
Future Prospects
The capital market in Bangladesh yet far
from its real potentials. From present
stage, the major future events that will
change the market are highlighted as:
 Within 3 to 6 months 8 large profitable government
enterprises are going to be listed under Direct
Listing Method adding value worth another 1
billion Dollar.
 The Telecom Giants in Bangladesh are finalizing
their offers for IPO in the market.
 Power and energy sectors demand for capital is 5
to 10 billion dollar within short time to meet the
immediate needs of 5000 MW power demand. (Contd.)
Capital Market in Bangladesh
Future Prospects (contd.)
 A deep sea port requiring 1 billion dollar is
going to start with a policy decision that it
will also be listed.
 The Pharmaceutical sector and API enjoying
WTO benefit is growing sharply.
 Textile sector as backward linkage to
thriving export oriented garments industries
is booming.
 Export oriented food processing industry
needs huge capital and technical capacity to
meet the growing standards in global market
for marine food, fruits and poultry.
 IT sector with our talented developers, yet
to demonstrate the massive potentials of
software industry of the country.
Capital Market in Bangladesh
Future Programs for Further Development
1.
Active market of government, municipal and corporate bonds beside the
corporate bonds to create alternative investment.
2.
All securities to be brought under CDS within 2 years.
3.
All major infrastructure companies, specially
those in power,
telecommunication and energy sector are to be listed ensure to broaden
the market depth with at least US$ 15 billion market cap by 2009 having
daily average turnover from current level of average of 10 to 15 million
dollar to a level of 70 to 100 million dollar 2 years.
4.
To strengthen merchant banks’ capacity to be more active.
5.
Ensuring speedy disposal of decisions for market operation.
6.
Ensuring greater degree of transparency in financial disclosure and
management structure for better corporate governance.