Stock Market of Bangladesh

December 29, 2011

To,

Md. Ishtiak Uddin

University of Asia Pacific, DBA

Dhanmondi, Dhaka

Subject: Submission of a report on "stock market of Bangladesh"

Dear Sir,

We are presenting a report on "Stock Market of Bangladesh" as you asked us to conduct.

Working on a practical field with theories helped us to build our theories strong and specific. We believe that this report will help the reader to know about the performance and efficiency of the stock market.

During preparing this report we have enforced our best effort. Surely, it enriches our knowledge and promotes our study. Thank you for giving us such an opportunity for working on the topic. We will be honored to provide you any additional information, if necessary.

Sincerely Yours,

Group 5

Course Code: FRL 409

Executive Summary

Nowadays, capital market is a most common phenomenon in Bangladesh. Capital market (Stock Market) represents the economic stability of a country. Stock market growth also plays an important role in predicating future economic growth. Bangladesh stock market is still at an early stage of its growth and stock market size is small.

In this report we've tried to demonstrate the total image of Bangladesh stock market including DSE (Dhaka Stock Exchange) &CSE (Chittagong Stock Exchange), the major events of BD stock market, the major up trends and down trends, the current situation of stock market and also the possible recommendation to overcome this situation.

We start our journey since 1996. In 1996 Bangladesh capital market experienced an unprecedented surge in market prices and volume of activity. Both the DSE & CSE all-Share Price Index rose from 967.70 recorded on 1, July 1996 to a peak of 3648.75 registered on 5 November 1996, a jump of 277 percent in the index. Subsequent crash in November of 1996 was mainly due to "speculative bubble" based on rumors and dishonest trading activities.

The bear market that started with the busting of the bubble lasted for seven years, the DSE general index rarely crossing the 1000-point mark during this period. The market started a recovery from April 2004, when it was fairly underpriced with the average price-earnings ratio at about 10, and thereafter the DSE index steadily gained through July 2009.

But the old proverb 'History Repeats Itself' will be true again, because