History, development and present condition of capital market in Bangladesh
Capital Market mainly refers to the Stock and Share market of the country. When banking system cannot totally meet up the need for funds to the market economy capital market stands up to supplement it. Companies and the government can raise funds for long-term investments via the capital market. The capital market includes the stock market, the bond market, and the primary market. Securities trading on organized capital markets are monitored by the government; new issues are approved by authorities of financial supervision and monitored by participating banks. Thus, organized capital markets are able to guarantee sound investment opportunities. This assignment reveals the various aspects of the Capital Market in Bangladesh
Bangladesh capital market has achieved some major milestone events in the recent past. The capital market operations in this part of the country started in mid-fifties with the establishment of East Pakistan Stock Exchange Association in 1954, which started trading in 1956. Initially it was a mutual organization (cooperative body) which was corporatized in recent activity of the Dhaka Stock Exchange (DSE) in term of turnover in the name of Dacca Stock Exchange Ltd. During those early periods until 1971, all trades in the exchange were conducted using trading data collected over telephone from Karachi Stock Exchange. After independence of Bangladesh, the operations of the stock exchange remained suspended until August 1976. At that time market trading started with only 14 listed companies having market value of only taka 90 million. The trade volume was very thin and could not attract investors. Over time some reform initiatives were taken to strengthen the market. First time Tk. 1crore daily trades were recorded in April 1992. Government adopted the Securities and Exchange Commission Act 1993 and established the SEC as the regulatory authority for the market and the Securities and Exchange Commission (SEC), established in 1993 under this Act, as the central regulatory agency oversees the activities of the entire capital market including issue of capital, monitoring the issue of stocks and operation of the stock markets including regulating of portfolio market. The Chittagong Stock Exchange (CSE) began its journey in 10th October of 1995 from Chittagong City through the cry-out trading system with the promise to create a state-of-the art bourse in the country. The automated trading was initiated in 10 August 1998 and started on 1 January 2001. Central Depository System was initiated in 24 January 2004. As of November 16, 2009, the benchmark index of the Dhaka Stock Exchange (DSE) crossed 4000 points for the first time, setting another new high at 4148 points. In 2010, the index crossed 8500 points and finally crashed in the first quarter of 2011. Millions of investors lost their money and came out onto the street blaming the speculators and regulators for the bubble that finally burst.
Status of the capital market of Bangladesh
Bangladesh capital market is one of the smallest in Asia but within the south Asian region it is the third largest one. It has two full-fledged automated stock exchanges name Dhaka stock exchange (DSE) and Chittagong stock exchange (CSE) and an OTC exchange operated by CSE, It also consists of a dedicated regulator the securities exchange commission (SEC) since it implements rules and regulation monitors their implication to operate and develop the capital. It consists of central depository Bangladesh limited (CDBL) the only central depository in Bangladesh that provide facilities for the...