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Investment In Stock Market


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It tells u why and how to invest in stock market...........

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Investment In Stock Market

  1. 1. Chittagong Stock Exchange Welcome to Mohammed Kamal Uddin Jalal Manager, Market Development
  2. 2. Chittagong Stock Exchange is a <ul><li>Non-Profit Organization. </li></ul><ul><li>Public Limited company by guarantee. </li></ul>
  3. 3. The Mission <ul><ul><li>“ To create an effective, efficient and transparent market atmosphere of International standard to save and invest in Bangladesh in order to facilitate the competent entrepreneurs to raise fund and accelerate industrial growth for overall benefit of the economy.” </li></ul></ul>
  4. 4. Objectives Develop a strong platform for entrepreneurs raising capital; Provide an investment opportunity for small and large investors; Develop a transparent market thereby ensuring investor's interest; Provide a fully automated trading system with most modern amenities to ensure: quick, easy, accurate transactions and easily accessible to all; Attract non resident Bangladeshis to invest in Bangladesh stock market; Attract foreign institutional investors to invest in Bangladesh; Collect , preserve and disseminate data and information on stock exchange; Develop professional service culture through mandatory corporate membership; Maintain a research cell for analyzing status of the market and economy.
  5. 5. Brief Introduction to Chittagong Stock Exchange <ul><li>CSE started operations in 1995 with Cry out Trading System. </li></ul>In 2004, CSE Introduced Internet Trading System. After 2 years, in 1998 it switched to Automated Trading System for the first time in Bangladesh.
  6. 6. What is CSE for? <ul><li>CSE is a market place where securities are bought and sold by/through the members of the Exchange. </li></ul>
  7. 7. Tell me why I should invest in the stock market <ul><li>Your own benefit </li></ul><ul><li>(major benefits) </li></ul><ul><li>Gain from IPO </li></ul><ul><li>Earn Cash and Stock Dividend </li></ul><ul><li>Capital Gain </li></ul><ul><li>Get Tax exemption </li></ul><ul><li>Ownership of a company </li></ul><ul><li>Benefit of the Nation </li></ul><ul><li>(major benefits) </li></ul><ul><li>Industrialization </li></ul><ul><li>Infrastructure development </li></ul><ul><li>GDP growth </li></ul><ul><li>Per Capita Income </li></ul><ul><li>Standard of living </li></ul><ul><li>Employment </li></ul><ul><li>Asset Distribution </li></ul>
  8. 8. Commercial Banks Merchant Banks Broker/Dealer CSE Primary Market Secondary Market Investor Investor Investor LISTING SEC Investor
  9. 9. How transactions are executed?
  10. 11. CSE Trading Network
  11. 12. Trading Period Pre-opening Session: 09.40 - 09.55 Opening Session: 9.55 - 10.00 Continuous Trading Session: 10.00-14.15 Closing Session: 14.15 - 14.20 Close Price Trading Session: 14.20 - 14.30 Post Closing Session: 14.30 - 15.15
  12. 14. Category of listed securities <ul><li>A, B, G & N Categories </li></ul><ul><li>Z Categories </li></ul>
  13. 15. Clearing & Settlement Cycle (Day wise) T+0 Trading Day Broker / Dealers deposit share and / or Cheque Stock Exchange verifies / transport Certificates and cheques Brokers / Dealers receive Investors get shares/ Cheque T+2 T+1 T+3 T+4 T+5 T+6 T+7 Tue holiday holiday Sun Mon Tue Wed Thu Fri Sat Sun Mon
  14. 16. Internet Trading System
  15. 17. Internet Trading System (ITS) May be you are an executive, a teacher, a student, an entrepreneur, a housewife. All of you remain busy at your own jobs, you don’t have enough time to go and trade in the broker’s office. ….Don’t worry, stock market investment is still possible for you. No matter where you are staying right now, stock market is not away from you. It is now available everywhere in the globe. All you have to do is just browse -
  16. 18. Placing Buy/Sell order through ITS
  17. 19. Products in the Market As on 15 April 2009 <ul><li>Listed Securities: 244 </li></ul><ul><li>Equity (Share) : 226 </li></ul><ul><li>Mutual Funds : 17 </li></ul><ul><li>Corporate Bond : 1 </li></ul><ul><li>Issued Capital : Tk. 135.95 Billion </li></ul><ul><li>Market Capital: Tk. 754.79 Billion </li></ul>
  18. 20. CSE Milestones <ul><li>12th Feb 1995: </li></ul><ul><ul><li>Bangladesh Government approved CSE </li></ul></ul><ul><li>1st April, 1995: </li></ul><ul><ul><li>Incorporated as a limited company </li></ul></ul><ul><li>10 th October 1995 </li></ul><ul><ul><li>Floor Trading Started </li></ul></ul><ul><li>1 st January 1996: </li></ul><ul><ul><li>became corresponding member of World Federation of Exchanges (Formerly FIBV) </li></ul></ul><ul><li>2 nd June 1998: </li></ul><ul><ul><li>Automated Trading on WAN starts </li></ul></ul><ul><li>16 th January 2000 </li></ul><ul><ul><li>Convened SAFE </li></ul></ul><ul><li>26th January, 2004 </li></ul><ul><ul><li>Central Depository Bangladesh Ltd. (CDBL) opened </li></ul></ul><ul><li>30th May, 2004 </li></ul><ul><ul><li>Internet Trading Service (ITS) introduced </li></ul></ul><ul><li>4th July, 2004 </li></ul><ul><ul><li>Over-the-Counter (OTC) market opened </li></ul></ul>
  19. 21. Listed Securities
  20. 22. De-listed Securities 2002 1 2003 Nil 2004 6 2005 2 2006 6 2007 Nil 2008 Nil 2009 Nil
  21. 23. Market Capital
  22. 24. Market Cap to GDP 2007 11% 2008 14.32% 2009 15.5%(app)
  23. 25. Turnover ( BDT ) 2007 52,363,148,495.00 Daily Highest Turnover in CSE BDT 109 Crore on 16 October 2008 2008 100,747,000,000.00
  24. 26. Indices In CSE <ul><li>All Share Price Index </li></ul><ul><li>CSE-30 Index </li></ul><ul><li>CSCX </li></ul><ul><li>Sector Index </li></ul>
  25. 27. Approach followed for construction of CSE Indices There are many different ways of constructing an index. Value-weighted method may be considered as a most appropriate method than others. The computation of a value-weighted index is similar to that of a Laspayres index. The only index the CSE has been maintaining since 10 th October 1995 is a ALL SHARE PRICE INDEX using Chained Paasche method. It faces question of clarity. This index was subject to unusual ups and downs and without a distinct base value. So, in need of a clean slate CSE introduced new indices from 1 January 2000 using the Laspayers Method. We have studied index of a number of bourses and found that the Laspayers Method to calculate index is regarded as the most transparent and scientific method. Today’s Market Capital Today’s Index = ------------------------------------------------- x Previous day’s Index Previous day’s Market Capital
  26. 28. Factors considered for construction of CSE indices All Share Price Index Inactive stocks not being traded for consecutive six months will not be considered in the calculation. Mutual Funds and Debt securities will not be considered in calculating index. A newly listed scrip will be included in the index after five consecutive trading days. Only normal trades should be considered in calculating index. All share price index will be calculated only once in a day – after the trading hour in the on line system. No changes in number of shares will be allowed during VECTOR session. Index committee will review the index – its criteria, performance, calculation method after every six month. Index Base Date is 30 th December 1999 Base Day index 1000
  27. 29. Factors considered for construction of CSE indices CSE-30 Selective Index BASIC CRITERIA 1. Must be listed with the Chittagong Stock Exchange. 2. In case of IPO/New Issue, this should be on listing either with DSE or CSE for a minimum period of 2 years or remained in Commercial Production for the minimum same period prior to its listing. 3. Companies that did not hold their Annual General Meetings regularly will not be considered. 4. Minimum market capitalization must be Tk. 200 million. 5. Must have at least 20% free floating share capital. Free floating share capital shall mean the share capital which will exclude Govt's holding (other than ICB), Sponsors/Directors & their Associates' holding plus other locked-in portions. 6. Must have positive revenue reserve/ retained earnings. 7. Must be traded for at least 20% days in trading. 8. Paid dividend in any of the last 2 years. 9. Company having negative Earning Per Share (EPS) for last two consecutive years will not be considered. 10. Company falling under settlement category 'Z' will not be considered. 11. Financial Institution falling under the problem list of Bangladesh Bank will not be considered provided such information is available from an acceptable source. 12. Company failing to pay the listing fees and/or penalty imposed under the Listing Regulations of CSE for a period of 2 years will not be considered. 13. At least one company from each sector will be taken in the index if the scrip satisfies the above criteria and achieves the minimum point as evaluated on the basis of the following Selection Criteria
  28. 30. Factors considered for construction of CSE indices SELECTION CRITERIA 1. Higher Net Assets Value (NAV) per share 2. Higher rate of Earning Per Share (EPS) 3. Higher rate of dividend 4. Higher rate of free floating in equity 5. Larger number of shareholders 6. Higher liquidity in terms of trading day 7. Higher percentage of market cap in terms of Paid-up Capital 8. Longer duration of continuous remaining in the CSE-30 Index 9. Regular payment of listing fees
  29. 31. Factors considered for construction of CSE indices <ul><li>Conditions to be followed while forming the selective Index: </li></ul><ul><ul><li>Only the active scrips will be considered for calculating the index. </li></ul></ul><ul><ul><li>Mutual Funds and Debt securities will not be considered in this index. </li></ul></ul><ul><ul><li>Only normal public market trades will be considered. </li></ul></ul><ul><ul><li>Selective Index will be refreshed after 3 minutes time interval during online trade. </li></ul></ul><ul><ul><li>At the time of update the Selective Index will consider the Weighted Average Price for each constituent stock. (Example annexed) </li></ul></ul><ul><ul><li>No changes in number of shares will be allowed during the business sessions. </li></ul></ul><ul><ul><li>Index committee will review the index – its criteria, performance, calculation method after every six month. </li></ul></ul><ul><ul><li>Index Base Date is 30 th December 1999 </li></ul></ul><ul><ul><li>Base Day index is set to be 1000 </li></ul></ul>
  30. 32. Factors considered for construction of CSE indices CSE Selective Categories Index - CSCX Chittagong Stock Exchange (CSE) launched a new index named CSCX (CSE Selective Categories' Index) comprised A, B & G category companies from 14th February 2004 to replace the earlier CSE Trade Volume Weighted Index. The Base Date of this index is 15th April 2001 (when A, B & Z category were introduced) and Base Value is set to 1000. The new index includes all but not the Z category companies. This also excludes the companies/scrips which are debt securities, mutual funds, suspended for indifinte period and non-traded for preceding six months of review meeting. The index will be reviewed in the Index Committee Meeting after every six months like other two indices of CSE. This index will be disseminated on line to all the Brokers' Work Stations (BWSs) during trading sessions and after every three minutes the index value will be refreshed. According to the said bases of this index the value of the index on 11th February 2004 stands at 1165.3754.
  31. 33. CSE indices 2008-2009
  32. 34. CSE’s on going development programme <ul><ul><ul><li>Enhancement of regional Co-operation </li></ul></ul></ul><ul><ul><ul><li>Training Institute </li></ul></ul></ul><ul><ul><ul><li>Invite private companies to go public </li></ul></ul></ul><ul><ul><ul><li>Market Development Programs </li></ul></ul></ul><ul><ul><ul><li>Introduce Derivatives in the market </li></ul></ul></ul>
  33. 35. SAFE Members <ul><li>Colombo Stock Exchange </li></ul><ul><li>Chittagong Stock Exchange </li></ul><ul><li>Dhaka Stock Exchange </li></ul><ul><li>Islamabad Stock Exchange </li></ul><ul><li>Karachi Stock Exchange </li></ul><ul><li>Lahore Stock Exchange </li></ul><ul><li>Mauritius Stock Exchange </li></ul><ul><li>National Stock Exchange of India </li></ul><ul><li>Nepal Stock Exchange </li></ul><ul><li>OTC Exchange of India </li></ul><ul><li>Royal Securities Exchange of Bhutan </li></ul><ul><li>The Stock Exchange, Mumbai </li></ul>
  34. 36. CSE Help-Center
  35. 37. Thank you for attending with patience and we invite you all - Please know the market, get in and help yourself and your beloved motherland towards strong economic growth. Bcoz, A strong capital market is good for you and good for Bangladesh. Thank you