There are many factors that affect in share price in DSE. The price of goods determined in market on the basis of Demand and Supply. Share market is also a market. Every Share has a face value and this value vary in market on the basis of demand and supply of share. In the share market everybody are buyer and everybody are seller. One sells a share and another purchase that, in the same way he sells a share and another purchase that. The share market is fully computerized digital market. The transaction of this market accomplish by online networking. Everybody can be a member of this market by open an account.
There are many kinds of reason and factor for increase and decrease of share price, some are related with company and some are related with market mechanism. There are two stock exchanges in Bangladesh. One is Dhaka Stock Exchange and another is Chittagong Stock exchange. We discuss here about Dhaka Stock Exchange (DSE). Bangladesh is a least developed country. Corruption is available here. So market mechanism is very strong here. Many bodies want to take a chance of market mechanism for earn profit. They are not actual investor. For these peoples share market is up-down.
Here we mention the determination of share price based on DSE. The Determination of Share price on basis of company policy ? Every Share has a face value. ? Company announce the dividend on the basis of face value. ? Company announce the share premium on share. ? Company issue the right share. ? Company issue the bonus share. ? The Earning revenue of company determined the share price. ? The Reputation of company determined the share price. ? The Consistency of company determined the share price. ? The Various kinds of offer of company determined the share price. The Determination of Share price on basis of Market mechanism ?
There are many factor that affect the share price in market. ? Original value are not stay in market Place because of market mechanism. ? The Ignorance about share market. ? The Syndicates affect on share market. ? False information is a factor to determination the share price. ? The inflation is a factor to determination the share price. ? The rate of Interest is a factor to determination the share price. ? The increase and decrease of investment in share market is a factor to determination the share price. ? Immoral Business man affect in the share market. ? The liquid capital are not stay in same position always. The policy of the authority of security exchange is a factor to determination the share price. ? The unconsciousness about money market is a factor to determination the share price. Introduction to DSE The Necessity Of Establishing A Stock Exchange In The Then East Pakistan Was First Decided By The Government When, Early In 1952. It Was Learnt That The Calcutta Stock Exchange Had Prohibited The Transactions In Pakistani Shares And Securities. The Provincial Industrial Advisory Council Soon Thereafter Set Up An Organizing Committee For The Formation Of A Stock Exchange In East Pakistan.
A Decisive Step Was Taken The Second Meeting Of The Organizing Committee Held On The 13th March ,1953. In The Cabinet Room, Eden Building ,Under The Chairmanship Of Mr. A . Khaleeli, Secretary Government Of East Bengal , Commerce, Labor And Industries Department At Which Various Aspects Of The Issue Were Discussed In Detail. The Then Central Governments Proposal Regarding The Karachi Stock Exchange Opening A Branch At Dhaka. , Did Not Find Favour With The Meeting Who Felt That East Pakistan Should Have An Independent Stock Exchange .
It Was Suggested That Dhaka Narayanganj Chamber Of Commerce & Industry Should Approach Its Members For Parchase Of Membership Cards At RS. 2000 Each For The Proposed Stock Exchange. The Location Of The Exchange It Was Thought Should Be Either Dhaka Narayanganj Or Chittagong . An Organizing Committee Was Appointed Consisting Of Leading Commercial And Industrial Personalities Of The Province With Mr. Mehdi Ispahani As The Convener In Order To Organize The Exchange. The Chamber Informed Its Members And Members Of Its Affiliated Associations
Of The Proceedings Of The Above Meeting ,Requesting Them To Intimate Whether They Were Interested In Joining The Proposed Stock Exchange. This Was Followed By A Meeting , At The Chamber Of About 100 Persons Interested In The Formation Of The Exchange On 07. 07. 1953. The Meeting Invited 8 Gentleman To Become Promoters Of The Exchange With Mr. M Mehdi Ispahani As The Convener And Authorized Them To Draw Up The Memorandum And Article Of Association Of The Exchange And Proceed To Obtain Register Under The Companies Act. 1913. The Other 7 Promoters Of The Exchange Were Mr. J M Addision-Scott, Mr. Mhodammed Hanif, Mr.
A C Jain, Mr. A K Khan , Mr M Shabbir Ahmed And Mr. Sakhawat Hossin. It Was Also Decided That Membership Fee Was To Be Rs. 2000 And Subscription Rate At 15 Per Month. The Exchange Was To Consist Of Not More Than 150 Members. A Meeting Of The Promoters Was Held At The Chamber On 03. 09. 1953 When It Was Decided To Appoint Orr Dignam & Co. , Solicitors To Draw Up The Memorandum And Articles Of Association Of The Stock Exchange Based On The Rules Of Stock Exchange Existing In Other Countries And Taking Into Account Local Conditions. The 8 Promoters Incorporated The Formation As The East Pakistan Stock Exchange Association Ltd.
On 28. 04. 1954. As Public Company. On 23. 06. 1962 The Name Aws Revised To East Pakistan Stock Exchange Ltd. Again On 14. 05. 1964 The Name Of East Pakistan Stock Exchange Limited Was Changed To “Dhaka Stock Exchange Ltd. ” At The Time Of Incorporation The Authorized Capital Of The Exchange Was Rs. 300000 Divided Into 150 Shares. Of Rs. 2000 each and by an extra ordinary general meeting adopted at the extra ordinary general meeting held on 22. 02. 1964 the authorised capital of the exchange was increased to Tk. 500000 divided into 250 shares of Tk. 2000 each. The paid up capital of the exchange now stoods at Tk. 60000 dividend into 230 shares of Tk. 2000 each. However 35 shares out of 230 shares were issued at TK. 80,00,000 only per share of TK. 2000 with a premium of TK. 79,98,000 . Although incorporated in 1954, the formal trading was started in 1956 at Narayanganj after obtaining the certificates of commencement of business. But in 1958 it was shifted to Dhaka and started functioning at the Narayangonj chamber building in Motijheel C/A. On 1. 10. 1957 the stock exchange purchase a land measuring 8. 75 Kattah at 9F Motijheel C/A from the Government and shifted the stock Exchange to its own location in 1959. Function of DSE
The major functions are: – Listing of Companies. (As per Listing Regulations). – Providing the screen based automated trading of listed Securities. – Settlement of trading. (As per Settlement of Transaction Regulations) – Gifting of share / granting approval to the transaction/transfer of share outside the trading system of the exchange (As per Listing Regulations 42) – Market Administration & Control. – Market Surveillance. – Publication of Monthly Review. – Monitoring the activities of listed companies. (As per Listing Regulations). – Investors grievance Cell (Disposal of complaint bye laws 1997). Investors Protection Fund (As per investor protection fund Regulations 1999) – Announcement of Price sensitive or other information about listed companies through online. Surveillance at DSE 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, with a view to minimizing the ability of the market participants to influence the price of the scrip/scrips in the absence of any meaningful information. By managing default risk by taking necessary actions timely.
Market Abuse is a broad term which includes abnormal price/volume movement, artificial transactions, false or misleading impressions, insider trading, etc. In order to detect aberrant behavior/ movement, it is necessary to know the normal market behavior – The department carries out investigation, if necessary, based on the preliminary examination/analysis and suitable actions are taken against members involved based on the investigation. All the instruments traded in the market come under the Surveillance umbrella of DSE. Surveillance activities at the Exchange are divided broadly into two major segments –
Price Monitoring : Price monitoring is manly related to the price movement/ abnormal fluctuation in prices or volumes etc. Position Monitoring : The position monitoring relates mainly to abnormal positions of members, etc. in order to manage default risk. Price Monitoring The functioning of the Price Monitoring is broadly divided into following activities – 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 o unduly influence the price and volumes of the scrips traded at the Exchange, improve the risk management system and strengthen the self regulatory mechanism at the Exchange. The system provides facility to access trades and orders of members. 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 Top N scrips by Turnover over a week/ fortnight/ month Top N scrips by Volume over a week/ fortnight/ month Trading in infrequently traded scrips
Scrips hitting New High / Low etc. The Surveillance actions or investigations are initiated in the scrips identified from the above-stated reports. Investigations Conducting in-depth investigations based on preliminary enquiries/analysis made into trading of the scrip. In case of irregularities observed , necessary actions are initiated or investigation case forwarded to SEC, if necessary through the CEO. Surveillance Actions Warning to Members The department may issue verbal/ written warning to member/s when market irregularities in the scrip is suspected. Imposition of penalty/ suspension
The department,through the CEO, imposes penalty or suspend the member/s who are involved in market irregularities, based on the input/ evidence available from investigation report. Rumor verification Liaising with Compliance Officers of companies to obtain comments of the company on various price sensitive corporate news items appearing in selected News Papers. Comments received from the companies are disseminated to the market by way of online news bulletin. Investigations based on rumor verifications are carried out, if required, to detect cases of suspected insider trading. Position Monitoring
The Surveillance Department closely monitors outstanding exposure of members on a daily basis. For this purpose, it observes various off-line and on-line market monitoring reports. The reports are scrutinized to ascertain whether there is excessive purchase or sale position build up compared to the normal business of the member, whether there are concentrated purchases or sales, whether the purchases have been made by inactive or financially weak members and even the quality of scrips is considered to assess the quality of exposure. The following key areas are examined to assess the market risk involved –
Online monitoring of Brokers Position Surveillance closely monitors brokers gross turnover exposure for ensuring margin calls in time. B/S Statement of Trading Members Scrutinizing the statement on daily basis. It is for keeping a watch on the exposure of the members & ascertain the quality of exposures. A detailed report on the net outstanding positions of top purchasers and top sellers in individual scrips, is prepared, if considered necessary. Concentrated B/S It is considered a risky issue. In case, such a situation is noticed, fundamentals of the scrips, their daily turnover, their nature of transactions are ascertained.
Thereafter, based on the market risk perception appropriate surveillance actions are taken. B/S of scrips having thin trading It is closely scrutinized as comparatively high market risk is involved in trading in such scrips. Details of trades in such scrips, if necessary, are called from members to assess the market risk involved & decide on the appropriate surveillance action. Verification of Institutional Trade The institutional trades executed by the trading members are verified to ascertain the genuineness of trades. Verification of Foreign Trade
The foreign trades executed by the trading members are verified to ascertain the genuineness of trades. Verification of Cross Reporting Trade The report crossing trades executed by the trading members are verified to ascertain the genuineness of trades. Verification of Dealers own trades Trades executed by the trading members (Dealers) are verified to ascertain the genuineness of trades. Verification of Sponsor’s Trade The Sponsors trades executed by the trading members are verified to ascertain the genuineness of trades. Snap Investigation
To carry out, wherever considered necessary, preliminary investigation of certain dealings to verify irregularities. Further actions, viz. , referring the case for detailed investigation, referring the case to the Sec, depending on the findings of preliminary investigation. Market Intelligence The rumors floating in the market are verified with the data available with DSE,Newspapers, Television news channels ; Reuters to ascertain the national ; global factors affecting the market sentiments. This enables the Exchange to avert market problems before it causes a serious damage.
Review Block Trades To determine – whether the block was executed at a price, even if at a discount or premium which was in line with other trading of the stock. whether there was any news on the company which caused the price increase or decrease subsequent to the block transaction. Review List of Settlement Failures To identify – broker/s with frequent failures a particular stock with a pattern. Verify Company Accounts To scrutinize company announcements, company reports, auditors qualifications ; other notes of special interests in the published accounts of such company.
Review Media Information To scrutinize press articles or other media on the daily basis, the news relevant to the share prices of companies. Monitoring on Newly Listed Stock To review all activities of a newly listed stock for the first 1 / 2 weeks to identify any abnormal deal. Develop Good Liaison To develop ; maintain good liaison with staff members of SEC ; listed companies ; member firms as well. Develop market contacts ; to pick up Intelligence. DSE Automated Trading System Preamble TESA Functional Model Hardware TESA’s principal trading functions Network (LAN / WAN) Markets System Software
Trading Sessions Application Software Market Control TESA Architecture Market Information Solution Benefits Broker Support PREAMBLE Globally the developments in information & communication technologies (ICT) have created a new instance in the securities market operations. Stock Exchanges all over the world have realized the potentiality of ICT and inclined to the electronic trading systems. It was understood by DSE that technology would ensure transparency, timeliness and satisfaction in customer service. Considering those DSE introduced Automated Trading System on 10th August 1998.
In other words, the trading floor moved right into the member’s office premises where an investor started to place buy/sell orders. Considering market growth the Automated Trading System was upgraded two times. The recently Upgraded Trading System was started from 21st December, 2008. HARDWARE DSE Automated Trading System (HP NonStop S7806) is running on fault tolerant, high available, scalable and maintainable Mainframe Server. Previously DSE established the TANDEM NonStop K204 System on September 1998 and on August 2005 it was replaced with highly scaleable HP NonStop S7802. DSE upgraded the Trading System again on 21st December, 2008.
The existing HP NonStop S7806 Server is highly fault tolerant to the fact that no single component failure will halt the system. Its constituent parts are hot swappable, and upward compatible; components can be added or removed while the system is running and any compatible new upgraded will work with the system. All disk drives are mirrored so, if any of the disk crashes the exact copy of the data is available at online. Moreover the connecting path for every disk whether it is primary or mirror is also redundant. In every case, minimum two peripheral devices exist. All the components are working active – active load balancing procedure .
To ensure better power quality we have ensured high end UPS’s with long durable backup capability, two instant backup generations and other electrical devices. NETWORK (LAN / WAN) All the Member (238 members) Server Applications (MSA) are connected with NonStop HP S-Series Server through either DSE LAN or WAN connectivity. Each member has one or more Trader Work Station (TWS). The TWSs are being connected to the Trading Server via respective MSA through LAN and WAN connection. DSE outsourced MetroNet Ltd. , DNS Ltd. , X-Net Ltd. , Dhaka Com Ltd. , Ranks ITT, Link-3, Royal Green Online Ltd. tc Network Service Providers (NSP under WAN Expansion Project). Now a days members can establish a main office or branch offices to their remote location and can trade smoothly by using different media ADSL, Optical fiber and Radio Link from Dhaka and other important cities such as Gazipur, Narayanganj, Comilla, Hobiganj, Chittagong, Sylhet, Khulna, Barisal, Rajshahi, Bogra at the same time. Three DSE branch offices located at Chittagong, Sylhet and Khulna are connected via BTTB’s DDN link. We also used another connectivity for redundancy for the DDN link. We have a plan to reach the DSE branches in same way.
DSE LAN/WAN Expansion DSE LAN/WAN Expansion Within Dhaka City: Outside of Dhaka City: In case of trade interruption due to serious hardware, software, network failure or telecommunication disruption at the Brokerage houses, there is a provision to allow traders to trade at DSE Contingency Trading floor. SYSTEM SOFTWARE The system software is HP Proprietary NonStop KERNEL and includes the database as part of the operating system thereby eliminating the layer typically found in most Database Management Systems (DBMS).
The Database functionalities are handled by NONSTOP SQL, which is simply a different operational session for the operating system. The proprietary nature of the system software arguably enhances system security. Operating system is HP’s proprietary NonStop Kernel DBMS handled by NonStop SQL. The system software treats all its hardware resources as objects and is thus entirely message driven. This then allows application software to be deployed using client / server architecture providing shared data processing between the central server and the user workstation.
The central trading system resides in the Stock Exchange premises, which is running 24 hrs in a day & 365 days in a year. APPLICATION SOFTWARE The application, which runs in DSE for trading, is called TESA (The Electronic Securities Architecture). TESA has two parts: MSA (Member’s Server Application) ; TWS (Trader workstation). MSA is the “Gateway” between the traders and the Stock Exchange, which manages all the transactions and database operations between the traders and the Trading Engine. TWS is the Front-end Application closer to investors, where they can submit Buy/Sell orders for their desired securities
TESA (The Electronics Securities Architecture) is the Trading software (Based on HP proprietary O/S ; DBMS) It has developed in view of Distributed Database system In the client site it is being using SQL as local Database Trading Software is MSA ; TWS In STSD (Signal trader Single Database) system both MSA ; TWS are running on a Windows 2k Professional /XP Professional workstation and for MTSD (Multiple trader Single Database) MSA install in a Windows 2k Server ; the TWSs are in different Windows 2k Professional /XP Professional workstation-using members in house LAN
TESA ARCHITECTURE TESA software is built for the global securities markets. It uses fault tolerant computers, intelligent workstations and client / server design techniques. This provides co-operative processing, high message integrity, continuous operation and fully automatic recovery. This co-operative mechanism enables very high speed processing which is essential for today’s electronic markets. TESA’s Application Programmatic Interface (API) is the gateway to the TESA system from the outside world. All external devices connect through the API.
The API provides the translation between external devices and internal processes. This means that a new process does not need to be written to support each new device, only the API needs to be modified. back to top SOLUTION BENEFITS The TESA application suite derives significant advantages from being implemented on the HP NonStop platform. The HP NonStop customers have benefited from these advantages. Fault Tolerance: One of the most important automation requirements for any stock exchange system is continuous system availability.
With most systems Fault Tolerance is created at the application level. Fault Tolerance is a fundamental design feature of the HP NonStop architecture. Data Integrity: Data integrity is an integral feature of HP architecture. TESA employs standard HP tools to achieve exceptional data integrity. Scalability: The ability of an exchange to accommodate extraordinary increases in transaction volumes without loss of its Capital investment in automation is very important. The HP NonStop Server is massively scalable due to Parallel processors. TESA FUNCTIONAL MODEL
An overview of the TESA Functional Model Client / Server: TESA’s Client / Server architecture enables an efficient allocation of computing resources and provides easily modified user-friendly interfaces. TESA workstations operate under Windows 2K/ XP professional and can function either as servers on a broker’s network or as workstation. These are used to perform trading and settlement activity by the brokers. PRINCIPAL FUNCTIONS OF TESA Market Information: Supplying all market information needed to formulate the buy and sell decisions.
Order Management: Accept, validate and store orders and quotes from broker workstations and / or systems. Order Execution: Automatically executes orders when buy and sell prices match. Trade Reporting: Trade execution reports are provided to each trade participant, to the settlement system and / or the depository and to the market. Index Calculation: Calculates and publishes market indices (DSE General Index ; Weighted Average Index. ) Market Access: Provide exchange members with efficient affordable GUI-based tools for accessing the market. MARKETS Four types of market at DSE
Public Market: In this market instruments are traded in normal volume Spot Market: Instruments are traded in normal volumes under corporate action if any Odd lot Market: Odd lots of all Instruments are trade in this market Block Market: Instruments are traded in bulk volume TRADING SESSIONS TESA conducts trading in-5-phases. Enquiry: In this session Brokers can logon to the system. No order will be submitted in this session. No trade will be executed. Only previous orders can be withdrew in this session Opening: The Opening is a pure, single-price auction.
All buy and all sell orders are compared and calculate the open-adjust price. No trades will be executed in this session Continuous Trading: During this phase, participants enter orders and immediate execution or for inclusion in the book. Automatic matching and execution takes place based on best price/ first in, first out trading rules Closing: Closing prices are calculated and disseminated to market participants Enquiry: Market will be closed in this session ; other facilities like the previous enquiry session. MARKET CONTROL
The Market Control Workstation allows the exchange administrative staff to control the operation of the market, e. g. Session Control: Opening and closing the market via interactive control or by preset timers. Validation Parameters: Setting and viewing parameters that control the trading engine validation e. g. tick size, Circuit Breaker, Circuit Filter, Market lot, Price protection Percentage. Messaging: Allows the dissemination of company announcement data and general market administrative massages. MARKET INFORMATION Market Information is a real-time market data system.
It collects, manages, generates and stores information relating to trade instruments and issuing companies. Market Information is responsible for, Collecting Real-Time Market Information: Bids, offers, last sale (i. e. most recent trade price and volume), book and other data are gathered via the Trading engine. It supports TESA’s automated and manual trading modules and can process the trades of external and off-market systems. Collecting company Information: All information supplied by the listed companies are maintained in the TESA database.
Generating Market Statistics: TESA generates market indices on a real time basis. It generates other statistical information such as Price. BROKER SUPPORT Research and Enquiry: this module provides brokers access to the local Broker Support and TESA databases for enquiries and research purposes. Public Order Book Broker Order Book The multi-windows environment allows users to simultaneously view orders, market and trades. Broker Support offers Stock Exchange members two configurations; standalone and multi-user.
Both configurations maintain a database consisting of information generated by the TESA Server and the local system. Algorithm of DSE Indices Index Calculation Algorithm (according to IOSCO Index Methodology): Yesterday’s Closing Index X Current M. Cap Current Index = ————————————————————– Opening M. Cap Yesterday’s Closing Index X Closing M. Cap Closing Index = ————————————————————– Opening M. Cap Current M. Cap = ? ( LTP X Total no. of indexed shares )
Closing M. Cap = ? ( CP X Total no. of indexed shares ) There are three indices in the DSE as follows : Sl. No Index Name Base Index Remarks 1 DSI (all shares) 350 (as on 01-11-1993) 2 DGEN (A, B, G ; N) 817. 63704 (as on 24-11-2001) SEC directive regarding index was on 17-11-2001 3 DS20 1000 (as on 01-01-2001) Abbreviations and Acronyms M. Cap – Market Capitalization DSE – Dhaka Stock Exchange IOSCO – International Organization of Securities Exchange Commissions (IOSCO) LTP – Last Traded Price CP – Closing Price Performance of DSE at a glance Performance of DSE at a glance | | | | | | | | | |Years | | | |2006 | | | |2007 | | | |2008 | | | |2009** | | | | | | | | | | | | | | | | | | | | | | |Listed Issues | | | | | | | | | | | | | | | | | | | |No. f Securities | | | |310 | | | |350 | | | |412 | | | |443 | | | |% of Annual Growth | | | |8. 39 | | | |12. | | | |17. 71 | | | |7. 52 | | | |No. f Securities in mn | | | |1546. 05 | | | |2081. 00 | | | |2759. 00 | | | |3136. 0 | | | |% of Annual Growth | | | |24. 27 | | | |21. 83 | | | |32. 58 | | | |13. 6 | | | |Issued Capital ; Debentures | | | | | | | | | | | | | | | | | |-Tk. mn | | |118437 | | | |214472 | | | |372156 | | | |457944 | | | |-US$ mn | | | |1711. 52 | | | |3127. 33 | | | |5409. 4 | | | |6634. 95 | | | |% of Annual Growth | | | |68. 44 | | | |81. 9 | | | |73. 52 | | | |23. 05 | | | |Market Capitalisation | | | | | | | | | | | | | | | | | | |-Tk. mn | | | |323367. 94 | | | |742195. 7 | | | |1059530 | | | |1312773 | | | |-US$ mn | | | |4672. 95 | | | |10822. 34 | | | |15400 | | | |19020. 8 | | | |% of Annual Growth | | | |38. 74 | | | |135. 28 | | | |42. 76 | | | |23. 0 | | | |Conversion Rate | | | |69. 2 | | | |68. 58 | | | |68. 80 | | | |69. 2 | | | |Thrnover of Listed Securities | | | | | | | | | | | | | | | | | |Total Turnover | | | | | | | | | | | | | | | | | | |Volume in mn | | | |797. 77 | | | |2831. 23 | | | |4605. 38 | | | |3480. 4 | | | |Value (Tk. mn) | | | |65079. 11 | | | |322867. 07 | | | |667964. 2 | | | |565038. 22 | | | |Value (US$ mn) | | | |1099. | | | |4707. 89 | | | |9708. 79 | | | |8186. 9 | | | |% of Annual Growth | | | |0. 38 | | | |396. 11 | | | |106. 89 | | | |-15. 1 | | | |Daily Average Transaction | | | | | | | | | | | | | | | | | |Volume in mn | | | |3. 5 | | | |11. 5 | | | |19. 43 | | | |27. 84 | | | |Value (Tk. mn) | | | |285. 3 | | | |1362. 31 | | | |2818. 42 | | | |4520. 1 | | | |Value (,US$ mn). | | | |4. 82 | | | |19. 86 | | | |40. 97 | | | |65. 9 | | | |% of Annual Growth | | | |13. 58 | | | |377. 28 | | | |106. 89 | | | |60. 8 | | | | | | | | | | | | | | | | | | | | | |Initial Public Offcring(IPO) | | | | | | | | | | | | | | | | | |NO. f Public Issues | | | |7 | | | |14 | | | |12 | | | |4 | | | |Size of Public Offer | | | | | | | | | | | | | | | | | | |~Tk. mn | | | |1433. 95 | | | |4638. 13 | | | |3043. 41 | | | |337. 0 | | | |-US$ mn | | | |24. 22 | | | |67. 63 | | | |44. 24 | | | |4. 8 | | | |% of Annual Growth | | | |13. 29 | | | |223. 45 | | | |-34. 38 | | | |-88. 3 | | | |Size of Pre IPO Placement | | | | | | | | | | | | | | | | | |-Tk. mn | | | |146. 72 | | | |1540. 00 | | | |800. 00 | | | |60. 0 | | | |-US$ mn | | | |2. 47 | | | |22. 46 | | | |11. 63 | | | |0. 7 | | | |% of Annual Growth | | | |0. 56 | | | |949. 62 | | | |-48. 05 | | | |-92. 0 | | | |Public Subscription | | | | | | | | | | | | | | | | | | | |-Tk. mn | | | |15241. 93 | | | |37937. 06 | | | |37821. 1 | | | |15477 | | | |-US$ mn | | | |257. 46 | | | |553. 18 | | | |549. 73 | | | |224. 4 | | | |% of Annual Growth | | | |;lt; (3. 50) | | | |148. 90 | | | |-0. 30 | | | |-59. 8 | | | |Over Subscriptions Times | | | | | | | | | | | | | | | | | |-Value (Tk. n) | | | |10. 62 | | | |8. 18 | | | |12. 43 | | | |45. 4 | | | |% of Annual Growth | | | |(14. 90) | | | |(22. 98) | | | |51. 96 | | | |268. 9 | | | | | | | | | | | | | | | | | | | | | | | |** Up to June 2009 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | General Information What is the Stock Exchange? The stock exchange provides a sound and stable securities market where shares can be bought and sold. What is the Role of the Stock Exchange?
The stock exchange provides listed companies with a channel seek capital fund from the public and at the same time It provides the investors a place to buy and sell shares of the listed companies. The exchange also monitors the market to ensure that it is working efficiently, fairly and transparently. How many Stock Exchanges in Bangladesh? There are Two stock exchanges in Bangladesh: 1. Dhaka Stock Exchange Ltd. – Established on 1954 2. Chittagong Stock Exchange Ltd. – Established on 1995 Of these, Dhaka Stock Exchange is the biggest stock exchange in the country. How do you select the company Before You Invest? Don’t put in your money until you have understood all relevant information regarding the investment.
Prepare yourself for the vigorous homework of analyzing company’s annual reports, EPS (Earning Per Share), accounts and other statements while keeping abreast of what’s happening in the industry, country and elsewhere that may affect your investment. Consult your investment adviser/broker to get latest market information about shares you intend to buy or sell. Be skeptical of any thing picked up from rumors, particularly if you cannot rationally explain their choice. Why Do Investors Think For Long-term Investment? Bear in mind that even in the best of securities/shares, there can be short-term aberrations. It is important to have the power to hold your investments for longer periods. Studies have shown that investments properly timed and based on strong fundamentals have been very profitable for investors in the longer term. What is ‘Book closure’ / ‘Record Date’?
While a company a dividend, right/ bonus shares or intends to hold any AGM/ EGM; it declares a book legislature closer provider/ Record Date to register the name of shareholders. Only shareholders whose names appear on the register after the book closure/ Record Date are eligible to attend in the AGM/ EGM and also to receive dividends & bonus shares and entitlement to right shares, if any. Market Related Information What is the trade time of DSE? Generally Trading Time is from 11:00 am to 03:00 pm. Working Days: Sunday to Thursday What are the measures of market performance? There are four indicators of market performance: Market Capitalization Value Turnover Traded Volume Index What Investment Products are Available?
The following types of securities are available on the stock market for investment: Ordinary shares of listed companies Mutual funds Debenture Bond What is ‘Share’ ? Each share represents a small stake in the total paid up capital of a company. In fact a public limited company is one that is formed to accumulate capital from a large pool of investors. Therefore total capital of such companies is divided into smaller equal denomination units represented by a share/ capital. One may buy large or small lots to match the amount of money that one wants to invest. A company’s share price can rise or fall as a result of its own performance or market conditions.
Once the shares are bought and transferred to new investors name, the name will be entered in the company’s share register, the new investors will then be entitled to receive all the benefits of share ownership including the rights to receive dividends, to vote at the company’s general meetings and to receive the company’s reports. What is ‘Market Capitalization’ ? Market Capitalization is the total market value, at the current stock exchange list price of the total number of equity shares issued by a company. Market Capitalization = ? (No. of Issued Share * Close Price) What is ‘IPO’ ? Initial Public offering. IPO means while a company wants to raise fund from the general public, it goes for public offering after completing necessary regulatory compliances. What is ‘Circuit Filter’ ? Circuit Filter is the maximum permissible deviation of the price (specified as percentage), of an aggressor order from the last trade price. What is ‘Circuit Breaker’ ?
Circuit Breaker is the maximum permissible deviation of the price (specified as percentage) of the incoming order from the Circuit Breaker Base Price for that instrument. Orders violating circuit breaker will result rejection of the order. What is ‘Market Lot’ ? A Market Lot is the smallest tradable unit for an instrument except those traded in the Oddlot book. All order quantities can only be an integral multiple of the Market lot. What is ‘Odd Lot’ ? Stock market shares are generally bought and sold in market lots, which are easy to trade. Any number of shares less than the market lot makes an odd lot. Odd lots typically arise from bonus or rights issues. What is ‘Touchline Price’ ?
The Touchline Price for an instrument is the best offer (sell) and best bid (buy) price amongst all orders in the order book. The touchline buy price is the highest price amongst all buy orders and the touchline sell price is the lowest price amongst all sell orders. How orders are queued for trading? Orders are queued and traded according to first on price and then time priorities. Best-priced orders traded first. If there is more than one order at the same price, the order is placed by time priority. What are the groups of instruments in DSE? The groups of instruments in DSE are: A, B, G, N and Z . What are the Settlement Rules for different categories instruments? Settlement (Pay Cycle) Rules for different categories instruments are: Rule |Group |Howla Type |Market Type |Pay In |Pay Out | |Rule 1 |- |DVP |- |5 |6 | |Rule 2 |- |- |Spot |0 |1 | |Rule 3 |A |- |- |1 |3 | |Rule 4 |B |- |- |1 |3 | |Rule 5 |G |- |- |1 |3 | |Rule 6 |N |- |- |1 |3 | |Rule 7 |Z |- |- |3 |7 | ICT Related Information What does TESA mean?
TESA (The Electronic Security Architecture) is The DSE trading system and is used to trade Ordinary shares of listed companies, Mutual funds, Bonds and Debentures. What are MSA & TWS? MSA ( Member Server Application ) : Brokers can use MSA to monitor and control their trader(s). There can be only one MSA per broker house. All the traders (TWS) have to connect to the trading system through MSA. TWS (Trader Workstation) : Traders can trade on the stock exchange using either TESA supplied workstation software or through their own custom developed broker system. TESA supplied workstation is referred to as TESA trading workstation in this document.
TESA provides traders with trading services such as entering orders and viewing orders. What is the time interval of the data update at DSE website? Using the real time data DSE upgraded its official website (www. dsebd. org) where trade data updates in every 1 to 3 minutes interval. How can I observe some specific instrument’s current traded information from the DSE website in a page? You can make a Portfolio on the DSE official website (www. dsebd. org) to observe your desired specific instrument’s current traded information all at once. (If you are a new user you have to signup first. ). Right now, the registration is free. Does DSE offer any SMS facility? Yes, DSE is offering SMS services.
You can get Latest Trade Information of any DSE Listed Company you desire by sending SMS. Write DSE XXXXX & send it to 4636 Example: Write DSE DESCO & send it to 4636 You will get the value of the share for 3 times in a working day. To Start Subscription Service: write DSE SUB & send it to 4636 To Add Company at Subscription Service: write DSE sadd XXXXX & send it to 4636 To Delete Company from Subscription Service: write DSE sdel XXXXX & send it to 4636 To View Your Companies at Name at Subscription Service: write DSE mystock XXXXX & send it to 4636 To Stop Subscription Service: write DSE UNSUB & send it to 4636 To Start Alert Service for DSE: write DSE alert XXXXX, PPP & send it to 4636
Write the Instrument name at the space of XXXXX & the desired share price at the space of PPP. To View Information of DSE : To View DSE All Share Price Index write DSE INDEX & send it to 4636 To View DSE 20 Index write DSE 20 & send it to 4636 To View DSE Selected Index write DSE GEN & send it to 4636 To View Top 5 (Gainer) Companies write DSE top & send it to 4636 To View Bottom 5 (Loser) Companies write DSE bottom & send it to 4636 Does DSE offer any GPRS facility? Yes, DSE is offering GPRS services. For GPRS users to make use of the BULL software you have to register first. Then you can access the software by mobile through GPRS to get a variety of Latest Trade Information of DSE. The application requires login before using it.
Only GrameenPhone Users can register and login right now. If the user is not registered then he/she can request for a PIN from the application. A PIN will be sent to the user through SMS. The user has to send the PIN through SMS to the BULL registration server to verify authenticity. SMS format is, BULL PINCODE has to be sent to a number, e. g. 4636 After getting the correct PIN from the user a password will be sent through SMS and the user can login to BULL Application using the mobile number as username and password (sent through SMS). Is Dhaka Stock Exchange Ltd. offering Internet / Web based trading? No, just now Dhaka Stock Exchange Ltd. s not offering Internet / Web based trading. Stock price fluctuations The price of a stock fluctuates fundamentally due to the theory of supply and demand. Like all commodities in the market, the price of a stock is sensitive to demand. However, there are many factors that influence the demand for a particular stock. The field of fundamental analysis and technical analysis attempt to understand market conditions that lead to price changes, or even predict future price levels. A recent study shows that customer satisfaction, as measured by the American Customer Satisfaction Index (ACSI), is significantly correlated to the market value of a stock.
Stock price may be influenced by analyst’s business forecast for the company and outlooks for the company’s general market segment. Share price determination At any given moment, an equity’s price is strictly a result of supply and demand. The supply is the number of shares offered for sale at any one moment. The demand is the number of shares investors wish to buy at exactly that same time. The price of the stock moves in order to achieve and maintain equilibrium. When prospective buyers outnumber sellers, the price rises. Eventually, sellers attracted to the high selling price enter the market and/or buyers leave, achieving equilibrium between buyers and sellers.
When sellers outnumber buyers, the price falls. Eventually buyers enter and/or sellers leave, again achieving equilibrium. Thus, the value of a share of a company at any given moment is determined by all investors voting with their money. If more investors want a stock and are willing to pay more, the price will go up. If more investors are selling a stock and there aren’t enough buyers, the price will go down. Note: “For Nasdaq-listed stocks, the price quote includes information on the bid and ask prices for the stock. “ Of course, that does not explain how people decide the maximum price at which they are willing to buy or the minimum at which they are willing to sell.
In professional investment circles the efficient market hypothesis (EMH) continues to be popular, although this theory is widely discredited in academic and professional circles. Briefly, EMH says that investing is overall (weighted by a Stdev) rational; that the price of a stock at any given moment represents a rational evaluation of the known information that might bear on the future value of the company; and that share prices of equities are priced efficiently, which is to say that they represent accurately the expected value of the stock, as best it can be known at a given moment. In other words, prices are the result of discounting expected future cash flows. The EMH model, if true, has at least two interesting consequences.
First, because financial risk is presumed to require at least a small premium on expected value, the return on equity can be expected to be slightly greater than that available from non-equity investments: if not, the same rational calculations would lead equity investors to shift to these safer non-equity investments that could be expected to give the same or better return at lower risk. Second, because the price of a share at every given moment is an “efficient” reflection of expected value, then—relative to the curve of expected return—prices will tend to follow a random walk, determined by the emergence of information (randomly) over time.
Professional equity investors therefore immerse themselves in the flow of fundamental information, seeking to gain an advantage over their competitors (mainly other professional investors) by more intelligently interpreting the emerging flow of information (news). The EMH model does not seem to give a complete description of the process of equity price determination. For example, stock markets are more volatile than EMH would imply. In recent years it has come to be accepted that the share markets are not perfectly efficient, perhaps especially in emerging markets or other markets that are not dominated by well-informed professional investors.
Another theory of share price determination comes from the field of Behavioral Finance. According to Behavioral Finance, humans often make irrational decisions—particularly, related to the buying and selling of securities—based upon fears and misperceptions of outcomes. The irrational trading of securities can often create securities prices which vary from rational, fundamental price valuations. For instance, during the technology bubble of the late 1990s (which was followed by the dot-com bust of 2000-2002), technology companies were often bid beyond any rational fundamental value because of what is commonly known as the “greater fool theory”.
The “greater fool theory” holds that, because the predominant method of realizing returns in equity is from the sale to another investor, one should select securities that they believe that someone else will value at a higher level at some point in the future, without regard to the basis for that other party’s willingness to pay a higher price. Thus, even a rational investor may bank on others’ irrationality. Nine Laws of Price Sensitivity In their book, The Strategy and Tactics of Pricing, Thomas Nagle and Reed Holden outlined 9 laws or factors that influence a buyer’s price sensitivity with respect to a given purchase:  1. Reference Price Effect Buyer’s price sensitivity for a given product increases the higher the product’s price relative to perceived alternatives. Perceived alternatives can vary by buyer segment, by occasion, and other factors. 2.
Difficult Comparison Effect Buyers are less sensitive to the price of a known / more reputable product when they have difficulty comparing it to potential alternatives. 3. Switching Costs Effect The higher the product-specific investment a buyer must make to switch suppliers, the less price sensitive that buyer is when choosing between alternatives. 4. Price-Quality Effect Buyers are less sensitive to price the more that higher prices signal higher quality. Products for which this effect is particularly relevant include: image products, exclusive products, and products with minimal cues for quality. 5. Expenditure Effect Buyers are more price sensitive when the expense accounts for a large percentage of buyers’ available income or budget. 6.
End-Benefit Effect The effect refers to the relationship a given purchase has to a larger overall benefit, and is divided into two parts: Derived demand: The more sensitive buyers are to the price of the end benefit, the more sensitive they will be to the prices of those products that contribute to that benefit. Price proportion cost: The price proportion cost refers to the percent of the total cost of the end benefit accounted for by a given component that helps to produce the end benefit (e. g. , think CPU and PCs). The smaller the given components share of the total cost of the end benefit, the less sensitive buyers will be to the component’s price. 7. Shared-cost Effect The smaller the portion of the purchase price buyers must pay for themselves, the less price sensitive they will be. 8.
Fairness Effect Buyers are more sensitive to the price of a product when the price is outside the range they perceive as “fair” or “reasonable” given the purchase context. 9. The Framing Effect Buyers are more price sensitive when they perceive the price as a loss rather than a forgone gain, and they have greater price sensitivity when the price is paid separately rather than as part of a bundle. Price mechanism From Wikipedia, the free encyclopedia Jump to: navigation, search |[pic] |This article does not cite any references or sources. | | |Please help improve this article by adding citations to reliable sources. Unsourced material may be | | |challenged and removed. (December 2009) |
A price mechanism or market-based mechanism refers to a wide variety of ways to match up buyers and sellers through price rationing. It also describes the price of goods and services based on the demand and supply. An example of a price mechanism uses announced bid and ask prices. Generally speaking, when two parties wish to engage in a trade, the purchaser will announce a price he is willing to pay (the bid price) and seller will announce a price he is willing to accept (the ask price). The main advantage of such a method is that conditions are laid out in advance and transactions can proceed with no further permission or authorization from any participant.
When any bid and ask pair are compatible, a transaction occurs, in most cases automatically. |Contents | |[hide] | |1 Stock market | |2 Auctions | |3 Other Applications | |4 See also | [pic] Stock market When trading in a stock market, a person who has shares to sell may not wish to sell them at the current market price (quote). Likewise, a person who wishes to buy shares may not wish to pay the current market price either. Some negotiation is necessary in order for a transaction to occur.
The negotiation often comes in the form of adjusting the bid prices and the ask prices as the value of the share goes up and down. For example, if the share is worth $10, a buyer may “bid” $9. 97 (3 cents less), and a seller may ask for $10. 02 (2 cents more). If the value of the stock goes down, a seller may be forced to reduce his asking price. Conversely, if the value of the stock goes up, a buyer may be forced to increase his bidding price. Most of the time, the bid and ask prices remain very close to the market value of the share, often separated by only a couple of cents. The difference between the bid and ask price is called the Bid/ask spread. In actual trading, the parties involved might use a limit order to specify which bid or ask price he wishes to trade at.
The trader specifies the number of shares and his bid/ask price (depending on whether he is buying or selling). Such orders can have execution limits, such as “by end of day” or “all or nothing”.  Auctions Main article: Auction An auction is a price mechanism where bidders can make competing offers for a good. The minimum bid may or may not be set by the seller, who may choose to predetermine an ask price. The highest bidder, or the first one to reach a preset ask price, would be awarded the transaction.  Other Applications If the terms “pay” and “sell” are understood very generally, then, a very broad range of applications and different market systems can be enabled this way.
Internet dating for instance could be based on offers to talk for a period of time, accepted by those who are compensated not in money but in additional credits to keep using the system. Or, a political party could trade support for different measures in a platform, perhaps using allocation voting to “bid” a certain amount of support for a measure that a leader has “asked” them to support: if the measure has enough support in the party, the leader will proceed; a very explicit model of so-called “political capital”. Though there are many concerns about liquidating any given transaction, even in a conventional market, there are ideologies which hold that the risks are outweighed by the efficient rendezvous.
In greenhouse gas emissions trading, companies doing the “bidding” argue that the whole of Earth’s atmosphere can be seen as one uniform body affected almost equally by emissions anywhere on Earth. [neutrality is disputed] They argue further that, as a result, there are almost no local effects, and only a measurable and widely agreed climate change effect, of a greenhouse gas emission, justifying a “cap and trade” approach. Somewhat more controversially, the approach was applied even earlier to sulfur dioxide emissions in the United States, and was quite successful in reducing overall smog output there. In most applications of such methods, however, the comprehensive outcome of the transaction is not so easily measured or universally agreed.
Some theorists assert that, with appropriate controls, a market mechanism can replace a hierarchy, even a command hierarchy, by ordering actions for which the highest bid is received: An infamous example is the assassination market proposed by Timothy C. May, which were effectively bets on someone’s death. This has since been generalized into the prediction market idea which the Pentagon proposed to operate as part of Total Information Awareness; however, this proved controversial as it would theoretically let assassins predict and then benefit from their predictions, which they would cause to come true. This is a problem even with the commodity markets and any other financial markets, where a single person’s choices or fate might be influenced, predicted, or decided by someone already in the market.
Less controversial applications of bid and ask matching include: • industrial process control • various applications in social networks (including dating above) • calculating interest in court judgments or homestead credit • determining which of several assets in a divorce are most prized by each party, and accordingly, who should receive what for maximum amiability and minimum capital asset sale and lifestyle disruption Price system From Wikipedia, the free encyclopedia Jump to: navigation, search In economics, a price system is any economic system that effects its distribution of goods and services with prices and employing any form of money or debt tokens.
Except for possible remote and primitive communities, all modern societies use price systems to allocate resources. However, price systems are not used for all resource allocation decisions today. Contents •1 Fixed price versus free price systems •2 History •3 Friedrich A. Hayek on the price system •4 See also •5 References Fixed price versus free price systems A price system may be either a fixed price system where prices are set by a government or it may be a free price system where prices are left to float freely as determined by unregulated supply and demand. Or it may be a combination of both with a mixed price system. History Fundamentally, price systems have been around as long as there has been trade or money.
The institutional economist Torstein Viable wrote a tract which was seminal in development of the term as discussed in this article: The Engineers and the Price System. Its chapter VI, A Memorandum on a Practicable Soviet of Technicians discusses the possibility of socialist revolution in the United States comparable to that then occurring in Russia (the Soviets had not yet at that time become a state (USSR formed in 1922)). From its beginnings, the price system has evolved into the system of global capitalism that is present in the early 21st century.  The Soviet Union and other communist nations with a centralized planned economy were controlled price systems.
Whether the ruble or the dollar is used in the economic system, the criteria of a price system are the use of money as an arbiter and usual final arbiter of whether a thing is done or not. In other words, few things are done without consideration for the costs and the potential making of a profit in a price system. Friedrich A. Hayek on the price system For more details on this topic, see Price signal. Austrian School economist Friedrich A. Hayek argued that a free price system allowed economic coordination via the price signals that changing prices sent, which is regarded as one of his most significant and influential contributions to economics. From “The Use of Knowledge in Society”… The price system is just one of those formations which man has learned to use (though he is still very far from having learned to make the best use of it) after he had stumbled upon it without understanding it. Through it not only a division of labor but also a coordinated utilization of resources based on an equally divided knowledge has become possible. The people who like to deride any suggestion that this may be so usually distort the argument by insinuating that it asserts that by some miracle just that sort of system has spontaneously grown up which is best suited to modern civilization. It is the other way round: man has been able to develop that division of labor on which our civilization is based because he happened to stumble upon a method which made it possible.
Had he not done so, he might still have developed some other, altogether different, type of civilization, something like the “state” of the termite ants, or some other altogether unimaginable type’… Friedrich A. Hayek Investment Terminology The following is an non-exhaustive list of terms commonly used in investing. Annual Report: A report that public companies are required to file annually. It describes past years’ financial results and plans for the coming year. Annual reports include information about a company’s assets, liabilities, earnings, profits, and other year-end statistics. Annuity: A contract by which an insurance company agrees to make regular payments to someone for life or for a fixed period in exchange for a lump sum or periodic deposits.
Asset Allocation: The placement of a certain percentage of investment capital within different types of assets (such as 50 percent in stock, 30 percent in bonds, and 20 percent in cash). Asset Allocation Fund: Mutual fund that holds varying percentages of stock, bonds, and cash in its portfolio. Automatic Investment Plan: An arrangement where investors agree to have money regularly and automatically withdrawn from a bank account to purchase stock or mutual fund shares. Automatic Reinvestment: An option available to stock and mutual fund investors where fund dividends and capital gains distributions are automatically reinvested to buy more shares and thereby increase holdings.
Balanced Fund: Mutual fund that holds bonds and/or preferred stock in a certain proportion to common stock to obtain both current income and long-term growth of principal. Bear Market: Term used to describe a prolonged period of declining stock prices. Before-Tax (or Pre-Tax) Dollars: Money contributed to a tax-deferred savings plan that you do not have to pay income tax on until withdrawal at a future date. Beta: A measure of a stock’s volatility; the average beta for all stocks is + 1. Blue-Chip Stock: Indicates the stock of companies with long records of growth and profitability. The term is derived from the most expensive chips in a poker game. Bond: A debt instrument or IOU issued by corporations or