What is stock?

Stock or Share is the smallest part of ownership of an

asset/company/firm………………………

HISTORY OF STOCK EXCHANGE

• The stock exchange was established by “East Indiacompany” in 18th century . In India it wasestablished in 1850 with 22 stock brokers oppositeto town hall Bombay .This stock exchange is knownas oldest stock exchange of Asia.

Types of stock

Stock typically takes the form of shares of either common stock and preferred stock.

As a unit of ownership, common stock typically carries voting rights that can be exercised in corporate decisions.

Preferred stock differs from common stock in that it typically does not carry

voting rights but is legally receive a certain level of dividend payments

before any dividends can be issued to other shareholders

What is stock exchange?

• Stock exchange is a organized place or arrangement where the buyer and seller is brought

together so they can buy sale their stocks/share. For example Dhaka Stock Exchange has a

electronic trading system called TESA and Chittagong Stock Exchange has an electronic trading

system called VECTOR. These two system work as an arrangement to help buy/sale of listed securities.

What is Securities and Exchange Commission (SEC)?It is the regulatory body of Bangladesh capital market. For your information stock exchanges arecalled capital market as companies raise capital from here. SEC defines working process andrules and policies under which the stock exchanges will operate.

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Dhaka Stock Exchange

ঢাকা স্টক এক্সচেঞ্জ

Type Stock Exchange

Location Dhaka, Bangladesh

Coordinates 23.722302°N 90.421295°E

Founded 1952

Owner Dhaka Stock Exchange Limited

Key people Mr. Md. Rakibur Rahman[president]

Currency Taka (৳)

No. of listings 750

Market cap US$ 50.28billion [1]

Volume US$ 1.43 billion

Indexes DSE 20 Index

Websitedsebd.org (Bangla)

dsebd.org (English)

HistoryFirst incorporated as East Pakistan Stock Exchange Association Ltd in 28 April 1954 and started formal

trading in 1956. It was renamed as East Pakistan Stock Exchange Ltd in 23 June 1962. Again renamed as Dacca Stock Exchange Ltd in 13 May 1964. After the liberation war in 1971 the trading was discontinued for five years.

In 1976 trading restarted in Bangladesh, on 16 September 1986 DSE was started. The formula for calculating DSE all share price index was changed

according to IFC on 1 November 1993. The automatedtrading was initiated in 10 August 1998 and started on 1

January 2001. A Central Securities Depository System was initiated in 24 January 2004.

Chittagong Stock

Exchange

েট্টগ্রাম স্টক এক্সচেঞ্জ

Type Stock Exchange

Location Chittagong, Bangladesh

Founded 1995

OwnerChittagong Stock Exchange

Limited

Key people Mr. Al Maruf Khan [President]

Currency Taka

No. of listings 250

Market cap US$ 30billion

Indexes

CSE30

CSCX

CASPI

Website www.cse.com.bd

The Chittagong Stock Exchange : is a stock exchange based in the port city of

Chittagong, Bangladesh. It is one of the twin financial hubs of the country,

alongside the Dhaka Stock Exchange. Established in 1991, the exchange is

located in the Agrabad business district in downtown Chittagong. It has a combined

market capitalization of US$ 30 billion as of 2013.

Largest stock exchanges IN THE WORLD

LONDON STOCK EXCHANGENEW YORK STOCK EXCHANGESHANHAI STOCK EXCHANGEAUSTRALIA STOCK EXCHANGETOKYO STOCK EXCHANGEHONG KONG STOCK EXCHANGETORONTO STOCK EXCHANGEDEUTSCHE BORSEBM&F BOVESPANASDAQ OMX STOCK EXCHANGE

IMPORTANT FUNCTION OF STOCK EXCHANGE

Provide central and convenient meeting places for sellers and buyer of securities

Increase the marketability and liquidity of securities Contribute to stability of prices of securities Equalization of price of securities Smoothen price movement Help the investors to know the worth of their holdings Promote the habit of saving and investment Help capital formation Help companies and government to raise funds from

the investors Provide forecasting service

Rule 144 stock

• "Rule 144 Stock" is a common name given to shares of stock subject SEC Rule 144: Selling Restricted and Control Securities. Under Rule 144, restricted and controlled securities are acquired in unregistered form

Stock Market Conditions

There are two ways to describe the generalconditions of the stock market:

1)BULL MARKET

2)BEAR MARKET

Bull Market -A Bull Market indicates the constant upwardmovement of the stock market. A particularstock that seems to be increasing in value isdescribed to be bullish.

BEAR MARKETA bear market indicates the

continuous downward movement of the stock market. stock that

seems to be decreasing in value is described to be bearish.

CAUSES OF PRICE FLUCTUATION

1.DEMAND AND SUPPLY2.BANK RATE3.SPECULATIVE PRESSURE4. ACTIONS OF UNDERWRITERS AND OTHER FINANCIAL INSTITUTIONS5.CHANGE IN COMPANY’S BOARD OF DIRECTORS

6. FINANCIAL POSITION OF THE COMPANY7. TRADE CYCLE8. POLITICAL FACTORS9. SYMPATHETIC FLUCTUATIONS10. OTHER FACTORS:

A. EXPECTED MONSOONB. PERSONAL HEALTH OF HEAD OF

GOVERNMENT OR CHAIRMAN OF THE COMPANY

C. OIL PRICES IN THE INTERNATIONAL MARKET

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BROKER AND JOBBER.

BROKER: He is one acts as a intermidiary on behalf of others. A broker in a stock exchange ,is a commission agent who transacts business in securities on behalf of non members.

JOBBER: He is not allowed to deal with the public directly .He deals with brokers who are engaged with the investors . Thus, the securities is bought by the jobber from members and sells to members who are operating on the stock exchange as broker…

Problems of Stock Markets in Bangladesh:

• The unexpected rise and fall in share prices mostly followed from the general confidence of the investors about political stability, euphoria of investment in shares, prospect of quick capital gains, a vacuum in respect of institutional presence in the share market, monopolistic dominance of member brokers, inefficiency of the SECS to cape with the developments, existence to Kerb market , absence of proper application of circuit breaker etc.

Suggestions to improve the activities of Stock Market

• To introduce automated monitoring system that may control price manipulation,

• malpractice’s and inside trading.

• To introduce full computerized system for settlement of transactions.

• To force the listed companies to publish their annual reports with actual and proper

• information that can ensure the interests of investors.

• To control and abolish kerb market form premises of stock market.

• To take remedial action against the issues of fake certificates.

• The composite Quotation system(CQS) should be introduced and implemented that