Tasnia Ahmed (B1506027)

Comparative Analysis of Index of 3 Industries

Plato Khisa (B1506035)
(Publicly Listed Companies) with DSEX Index
MD Raad Sharar Chow. (B1506079)
 Introduction

Industry Overview

Methodology Overview
Findings & Analysis

Conclusion
 Introduction

Ceramic Industry

Dhaka Stock
Cement Industry
Exchange Index

IT Industry
Value Weighted Index
• A capitalization-weighted index is a type of market index with individual components that are
weighted according to their total market capitalization. Also known as Value Weighted
Index.
• larger components carry higher percentage weightings, while the smaller components in the
index have lower weights.

• Most of the indexes that are used nowadays are Cap-weighted index.
• Example of Cap-weighted index: The Standard and Poor's (S&P) 500 Index, the Nasdaq
Composite Index, the Wilshire 5000 Total Market Index, the Hang Seng Index and the MSCI
EAFE Index.
• In a cap-weighted index, large price moves in the largest components can have a dramatic
effect on the value of the index.
• Many things Cap-weighted index distorts the perception about market as it over weighs the
bigger companies.
• But bigger companies have bigger shareholder base and thus it is considered to be more
relevant.
 DSEX Index

DSEX is considered as the benchmark general index of the market as it

shows the exact price movement of the listed companies. This index
reflects around 97% of the total equity market capitalization. The base
value for DSEX is 2951.91.
Company Overview
• 45 factories are in operation, including 5 multinational companies.

• The cement sector accounted for 3.2 percent of the day's total turnover on
the Dhaka Stock Exchange (DSE) of Tk 4.35 billion in the end of September,
2015.
Cement • Overall price earning (PE) ratio stood at 35.38.
Industry • The cement sector accounted for 6.90 percent of the DSE's total market
capitalization of Tk 3,364 billion as on the end of September, 2015.

• The listed cement companies witnessed mixed trend in their profits in the
first half in 2015, compared to the same period last year as businesses
faced disruption due to political turmoil in the first quarter.
Company Overview

• Currently, there are more than 60 ceramic manufacturers in the country.

Another 20 will hit the market by June 2018.
Ceramic • The yearly production capacity of the local ceramics industry is as follows:

Industry tableware (250 million pieces), tiles (120 million square meters) and sanitar
ware (7.5 million pieces).

• Value addition in ceramics stands at nearly 65 percent.

 Company Overview • Large IT companies are opening around the world, and nations are building
up IT platforms, developing and promoting their IT industries.

• Asian countries are also becoming stakeholders in this boom by creating

conducive environments, drawing global IT companies to invest there.

• Existing giants like Microsoft, Apple, Samsung, etc. are making massive
IT Industry investments in Asian countries to utilize the cost advantage.

• Bangladesh, with its huge under-utilized manpower (cheaper than India,

Malaysia and China), can also benefit from these initiatives

• Considerable achievements in the IT sector have already been made over

several years towards building a 'Digital Bangladesh' and more initiatives
are coming.
 Methodology

σ 𝐏𝐭 𝐐𝐭
𝐈𝐧𝐝𝐞𝐱 𝐭 = × 𝐁𝐞𝐠𝐢𝐧𝐧𝐢𝐧𝐠 𝐈𝐧𝐝𝐞𝐱 𝐕𝐚𝐥𝐮𝐞
σ 𝐏𝐛 𝐐𝐛
𝑃𝑡 = ending prices for stocks on day t

𝑄𝑡 = number of outstanding shares on day t Base: 1st Jan 2018

𝑃𝑏 = ending prices for stocks on base day

𝑄𝑏 = number of outstanding shares on base day

Timeline: 1st Jan 2018- 30th October 2018
 Methodology

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠

𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠 =
1 + 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝑏𝑜𝑛𝑢𝑠 𝑠ℎ𝑎𝑟𝑒𝑠
Findings & Analysis
Cement Industry

• From 1st Jan to 30th October, there hasn’t been much changes shown in the performance of
the cement industry index.

• The cement industry index went the highest at the beginning of the year 2018 (in 2 nd Jan the
index went up to 100.75).

• After that it always underperformed in comparison with the market and it performed better
at 3 points in this time period.

• Other than that the industry experienced lower deviations in performance.

• But the industry started to show huge decline at the end of our research period and at the
end October the index has fallen to 75.21991, almost 25% fall in the index.
Findings & Analysis

Cement Industry index (from 1st Jan’ 18 to 30th October’ 18)

Opening Closing Highest Lowest

index index index index
100 75.21991 100.75 74.27269
Beta of Cement industry: We haven’t seen much correlation between the cement industry
index and the DSEX index. Seemingly the cement industry runs in its own place. Our beta
calculation for cement industry was 0.083 during this period.
Findings & Analysis
Ceramic Industry

• The ceramic industry’s has been preforming very inconsistently during the research time
period.

• For the first two months it performed in alignment with the market and seemed like
outperforming the market.

• However, when it seemed like it was going to outperform, the index fell and continued to
perform underneath the DSEX index for the next 4 months.

• At the end of June it started outperforming the market and reached its highest peak on July
22nd (Index 106.732.

• After the peak at June, ceramic industry performed above the DSEX index but inconsistently.
Findings & Analysis

Ceramic Industry index (from 1st Jan’ 18 to 30th October’ 18)

Opening Closing Highest Lowest

index index index index
100 92.7608 106.732 79.58335
Beta of Ceramic industry: The companies in the ceramic industry have moved more or less
along the market in the first 6 months of the year. Then they began to outperform the market.
The beta is 0.267 which means that the ceramic industry is not volatile either
Findings & Analysis
IT Industry
.
• IT sector’s performance has been in alignment with the market for the first 6
months with a few highs during this period

• But at the end of 6 months it has significantly outperformed the DSEX index
and reached its peak at the time period. But at the end it declined and seemed
to have another peak after October
Findings & Analysis

IT Industry index (from 1st Jan’ 18 to 30th October’ 18)

Opening Closing Highest Lowest

index index index index
100 97.66127 115.9385 91.0888
Beta of IT industry: The stocks in the Information Technology Industry have significantly outperformed
the market this year. There is an upward trend in the IT sector. The beta is 0.942503 which indicates that
the IT Industry is slightly more volatile than the market.
Conclusion

• From the index calculations of these three industries, we came to

know about how they have performed during these time periods.

• The IT industry and Ceramic industry has shown the potential of

growth, though they lack the consistency.

• Cement industry seemed non- reactant with respect to the market.

Thank You