1.

Dhaka stock exchange

1.1 Overview of DSE:

The Dhaka Stock Exchange (DSE) is located in Motijheel, Dhaka, is one of the two stock
exchanges of Bangladesh. In 2015, the combined market capitalization of listed companies on
the Dhaka bourse stood at over $40 billion. The Dhaka Stock Exchange is the prime bourse of
the country. Through its nonstop highly fault-tolerant screen based automated trading system, the
exchange can offer facilities for transparent and highly efficient mechanism provisions for
secondary market activities of shares, debentures and wide varieties of other securities. The
management and operation of Dhaka Stock Exchange is entrusted on a 25 members Board of
Director. 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.
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 (DCCI).

1.2 Department of Dhaka Stock Exchange (DSE):

The Various department of Dhaka stock exchange are as follows:

i. Listing and Membership Department

ii. Surveillance Department
iii. Inspection and Auditing

i. Listing and Membership Department:

Every company must be listed in the Stock market for working thereon and they have to fulfill
various formalities. The Listing and Membership department deals with the various formalities
of listing and membership with DSE. Now there are 559 companies are enlisted in DSE.
Listing Section:
If the companies willing to expand their market may apply for listing with the DSE, according to
the manner prescribed in the Listing Regulations. Listing Company means a corporation, which
has been listed in accordance with the regulations, and whose securities are listed and include
provisionally listed companies. If any company is unable to listing with DSE then no dealings in
securities of a company shall be allowed.
The Company has to be a Registered Public Ltd. that must be incorporated in Bangladesh under
the Companies Act.1994. Application for listing in the stock exchange should be under Section
(9) of the Securities and Exchange Ordinance -1969.The stock exchange shall grant permission
within a 3 months from the date of application.

ii. Surveillance Department:

Dhaka stock exchange has its own surveillance system to control and monitor the market
activities. The main objective of the Surveillance function of the Exchange is to promote market
integrity in two ways -

By monitoring price and volume movements (volatility) as well as by detecting potential

market abuses at a nascent stage.
By managing default risk by taking necessary actions timely.

Circuit Breaker Control:

To maintain the financial stability Circuit Breaker process is widely used in the Stock Exchange.
In case of Dhaka Stock Exchange circuit breaker isnt apply properly and thats why during 2010
the market was crash. The main activity of Circuit Breaker are given bellow:
Maintain a fixed percentage (10%) to control the share price
According to Dhaka Stock Exchange fluctuation of share price between 10% increase
or decrease.

On line Surveillance:
One of the most important tools of the Surveillance is the On-line Real Time Surveillance system
with main objectives of detecting potential market abuses at a nascent stage to reduce the ability

of the market participants to unduly influence the price and volumes of the scrips traded at the
Exchange and improve the risk management system.
Off-Line Surveillance:

The Off-Line Surveillance system comprises of the various reports based on different parameters
and scrutiny thereof

High/ Low Difference in prices

% change in prices over a week/ fortnight/ month

iii. Inspection and Auditing Department:

There are two types of inspection likely

1. Regular Inspection In a regular inspection, the inspectors check whether the brokers are
maintaining all the books of accounts.
2. Spot or Special Inspection In this sort of inspection the inspectors make a surprise visit
or it is done on a particular item.

We can write down the functions of this department as follows

Checking whether the brokers are maintaining rules and regulations under SEC.
Making physical visit to the broker houses as per the command of SEC or Surveillance
department of DSE.
Preparing internal report and forwarding to SEC if needed

1.3 Treading session:

Treading at DSE is performed in following session:

General treading hours : 10.30 A.M to 2.30 P.M
Working Days : Sunday to Thursday

1.4 Types of market at Dhaka Stock Exchange (DSE):

There are 4 types of market at Dhaka Stock Exchange (DSE). They are:
Public Market: In this market instruments are traded in normal value. Only trading of market lot
share is done through automatic matching.

Spot market: instruments are traded in normal value under corporate action if any. Spot
transactions are done through automatic matching which must be settled within 24 hours.

Public Market Sopt Market

Dhaka Stock
Exchange (DSE)

Block Market Odd lot Market

Figure: Types of market at DSE

Odd lot market: Odd lots of all instruments are trade in this market. Odd lot spices are trade
here based on pick and fill basis.

Block market: instruments are traded in bulk volume. It is a plea where bulk quantities of share
are traded through pick and fill basis.

1.5 DSE General Index

 Year General Index

2013 8290.41

2014 5257.61

2015 4219.31

2016 4342.31

DSE General Index was introduced in 27th November, 2001. This index excludes the companies
of Z categories and calculated on the basis of price movements. It has a base index of 817.62
points. Here we can see that apart from 2012 the general index has increased.

1.6 DSE 30 Index (DS 30)

DS 30 Index

Year Closing Index

2013 1466.25

2014 1803.06

2015 1756.56

2016 ( up to July 27) 1771.93

DS30 is price indices, where thirty companies will be selected based on profitability, market
capitalization and share size and the companies will be changed every six months based on the
performance. The companies included in DS30 will be considered as a good company for
investment. It was introduced in 28th January, 2013

1.7 DSE Broad Index (DSEX)

DSEX will be considered as the benchmark general index of the market as it shows the exact
price movements of the listed companies. The index has a base value of 2951.91 points. Here we
can see that the closing index has been decreased in 2015 and 2016 but increased in 2014.

DSEX

Year Closing Index

2013 4266.55

2014 4864.96

2015 4629.64

2016 (Up to July 27) 4538.21

2.Chittagong stock exchange

2.1 Overview of CSE

The Chittagong Stock Exchange (CSE) is a nonprofit making organization. It was incorporated
on 1st April 1995 as a limited company by guarantee. After six month, on 10th October 1995
floor trading was started with open cry-out auction system. In the backdrop of a strong need to
institute a dynamic automated and transparent stock exchange in the country, seventy reputed
business personalities under the leadership of Mr. Amir Khosru Mahmud Chowdhury MP, the
founder president established this bourse in the commercial capital Chittagong. Only 30
securities were listed on the first day trade when market capitalization stood at US$ 0.2 Billion.
Now CSE is a completely automated exchange with screen based trading facility on
countrywide communication network.

2.2 CSE AT A GLANCE

Type of Organization Non-Profit Public limited Company by
guarantee having share capital.
Authorized Capital Tk. 150 Million

Paid-Up Capital Tk. 38.4 Million

No. of Members 130

No. of listed Securities 213

No. of listed companies 199
No. of listed Mutual Funds 9
No. of listed Debentures 5
Trading Days Sunday to Thursday
Settlement system Daily netting, T+2 to T+4

Cost of trade Commissions-025% of the Transacted

value from both Buyer & seller, Contract
Charge -Tk. 3 from both Buyers &
sellers.

2.3 Types of indices of CSE

All Share Price Index

CSE-30 Index
CSCX
Sector Index

Factors Considered For Construction Of CSE Indices:

The following conditions are followed while calculating the All Share Price Index:
 All Share Price Index does not necessarily mean that all the listed stocks should be
considered for calculating the index. Inactive stocks not being traded for consecutive six
months will not be considered in the calculation.
Only the active scripts will be considered for calculating the index.

Mutual Funds and Debt securities will not be considered in calculating index.

A newly listed scrip will be included in the index after one consecutive trading days.

All share price index will be calculated only once in a day after the trading hour in the
on line system.
Index committee will review the index its criteria, performance, calculation method
after every six months.
Index Base Date is 30th December 1999

Base Day index 1000

The following conditions are followed while calculating the All Share Price Index:
All Share Price Index does not necessarily mean that all the listed stocks should be
considered for calculating the index. Inactive stocks not being traded for consecutive six
months will not be considered in the calculation.
Only the active scrips will be considered for calculating the index.

Mutual Funds and Debt securities will not be considered in calculating index.

A newly listed scrip will be included in the index after one consecutive trading days.

All share price index will be calculated only once in a day after the trading hour in the
on line system.
Index committee will review the index its criteria, performance, calculation method
after every six months.
Index Base Date is 30th December 1999

Base Day index 1000

CRITERIA OF LISTED COMPANIES FOR INCLUSION IN THE SELECTIVE INDEX

(CSE-30)
Two layer methods are followed for selection of listed companies in the CSE-30 Index. In the
first layer method, basic criteria are considered for primary selection.

Basic Criteria
1. Must be listed with the Chittagong Stock Exchange.
2. In case of IPO/New Issue, this should be on listing either with DSE or CSE for a minimum
period of 2 years or remained in Commercial Production for the minimum same period prior
to its listing.
3. Companies that did not hold their Annual General Meetings regularly will not be considered.
4. Minimum market capitalization must be Tk. 200 million.
5. Must have at least 20% free floating share capital. Free floating share capital shall mean the
share capital which will exclude Govt.'s holding (other than ICB), Sponsors/Directors & their
Associates' holding plus other locked-in portions.
6. Must have positive revenue reserve/ retained earnings.
7. Must be traded for at least 20% days in trading.
8. Paid dividend in any of the last 2 years.
9. Company having negative Earning per Share (EPS) for last two consecutive years will not be
considered.
10. Financial Institution falling under the problem list of Bangladesh Bank will not be considered
provided such information is available from an acceptable source.
11. Company failing to pay the listing fees and/or penalty imposed under the Listing Regulations
of CSE for a period of 2 years will not be considered.
12. At least one company from each sector will be taken in the index if the scrip satisfies the
above criteria and achieves the minimum point as evaluated on the basis of the following
Selection Criteria.
On being qualified on the basis of the Basic Criteria, the companies are required to meet the
following further Selection Criteria to have the final berth in CSE-30 Index.

Selection Criteria
1. Higher Net Assets Value (NAV) per share
 2. Higher rate of Earning per Share (EPS)
3. Higher rate of dividend
4. Higher rate of free floating in equity.
5. Larger number of shareholders.
6. Higher liquidity in terms of trading day.
7. Higher percentage of market cap in terms of Paid-up Capital.
8. Longer duration of continuous remaining in the CSE-30 Index.
9. Regular payment of listing fees.

3. Bangladesh securities and exchange commission

3.1 Overview of BSEC

The Bangladesh Securities and Exchange Commission (BSEC) was established on 8th June,
1993 as the regulator of the countrys capital market through enactment of the Securities and
Exchange Commission Act 1993. Through an amendment of the Securities and Exchange
Commission Act, 1993, on December 10, 2012, its name has been changed as Bangladesh
Securities and Exchange Commission from previous Securities and Exchange Commission. The
Commission consists of a Chairman and four Commissioners who are appointed for fulltime by
the government for a period of four years and their appointment can be renewed only for further
one term, but the condition is that age cannot exceed 65 in position during the tenure. The
Chairman acts as the Chief Executive Officer (CEO) of the Commission. The Commission has
overall responsibility to formulate securities legislation and to administer as well. The
Commission is a statutory body and attached to the Ministry of Finance.

3.2 Mission of the BSEC is to:

Protect the interests of the investors in securities.

Develop and maintain fair, transparent and efficient securities markets.

Ensure proper issuance of securities and compliance with securities laws.

3.3 The Commission's main functions are:

Regulating the business of the Stock Exchanges or any other securities market.
 Registering and regulating the business of stock-brokers, sub-brokers, share transfer
agents, merchant bankers and managers of issues, trustee of trust deeds, registrar of an
issue, underwriters, portfolio managers, investment advisers and other intermediaries in
the securities market
Registering, monitoring and regulating of collective investment scheme including all
forms of mutual funds.
Monitoring and regulating all authorized self-regulatory organizations in the securities
market.
Prohibiting fraudulent and unfair trade practices relating to securities trading in any
securities market.
Promoting investors education and providing training for intermediaries of the securities
market.
Prohibiting insider trading in securities.
Regulating the substantial acquisition of shares and take-over of companies.
Undertaking investigation and inspection, inquiries and audit of any issuer or dealer of
securities, the Stock Exchanges and intermediaries and any self-regulatory organization
in the securities market.
Conducting research and publishing information.

3.4 Stock exchanges

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.

Dhaka Stock Exchange

Chittagong Stock Exchange

Each Stock Exchange:

o establishes listing requirements
 o approves, suspends or removes listing privileges of companies

o monitors listed companies in compliance with legal regulatory provisions

o permits dual listing

4.New York Stock Exchange

4.1 Overview of NYSE

The New York Stock Exchange (NYSE) is a stock exchange based in New York City that is
considered the largest equities-based exchange in the world, based on total market capitalization
of its listed securities. Formerly run as a private organization, the NYSE became a public entity
in 2005 following the acquisition of electronic trading exchange Archipelago. The parent
company of the New York Stock Exchange is now called NYSE Euronext, following a merger
with the European exchange in 2007; the NYSE Euronext was acquired by Intercontinental
Exchange.

4.2 How does it work:

Stock, bonds, mutual funds, exchange-traded funds (ETFs) and derivatives all trade on the
NYSE. The exchange also offers electronic trading products, historical trading information, and
order-execution products.
The NYSE is an auction market where brokers and specialists buy and sell securities for people
by matching the highest bidding price with the lowest selling price. This is one of the most
distinguishing characteristics of the NYSE -- unlike the Nasdaq or other electronic exchanges,
the NYSE has an actual trading floor at 11 Wall Street in New York.
Stocks, bonds, warrants, options, and rights are traded at 22 horseshoe-shaped installations,
called trading posts, on the floor of the exchange. On the trading floor, the NYSE works in
continual auction mode, where traders working on behalf of investors execute stock transactions.
Traders congregate around a pre-ordained trading post where a specialist broker employed by an
NYSE member firm behaves as an auctioneer in an "open outcry" auction environment, bringing
buyers and sellers together.

The NYSE traces its origins to 1792, when 24 stockbrokers signed the so-called "Buttonwood
Agreement" near Wall Street. The first company listed on the exchange was the Bank of New
York. Today, the NYSE is operated by NYSE Euronext, formed by the 2007 merger of the NYSE
and Euronext, an all-electronic stock exchange. In 2011, the NYSE and the Deutsche Brse
merged.

4.3 The NYSE today

The NYSE is open for trading Monday through Friday, between 9:30 a.m. - 4:00 p.m. U.S.
Eastern Time (ET), excluding holidays designated in advance by the Exchange (click here to see
the list of the NYSE Holidays). More than 1,600 companies are listed on the NYSE, and the
average daily trading value hovers around $153 billion. Operating divisions of the NYSE are
broken down as follows: member firm regulation and surveillance; market operations; financial
and office services; product development and planning; and market services and customer
relations. Specialized staff groups are assigned to other functions, such as government relations,
economic research, and legal and liability problems.
A series of mergers have given the New York Stock Exchange its massive size and global
presence. The company started as NYSE before adding the American Stock Exchange and
merging with the Euronext. The NYSE was purchased in an $11 billion deal by the
Intercontinental Exchange in 2013.

DESCRIPTIO LAST
CHANGE(%)

NYSE COMPOSITE INDEX NEW 11744.7306 +65.7806

(+0.56%)

NYSE US 100 FUND 9444.7638 +86.554 (+0.92%)

DOW-JONES INDUSTRIALS 30 STOCK 21271.97 +89.44

(+0.42%)

S & P 500 INDEX 2431.77 -2.02 (-0.08%)

4.4 NYSE market trend