Capital Market in Bangladesh Background of the Market

Capital Market in Bangladesh Background of the Market DSE, the first stock exchange of the land was incorporated on April 28, 1954, while the second stock exchange – CSE was established in 1995 Ø After independence of Bangladesh, trading activities started in August 1976. Ø From 1998 automated screen based trading was introduced by both the exchanges through LAN and WAN connectivity and HP non stop trading platform is providing basic architecture.

Capital Market in Bangladesh Corporate Structures of the Exchanges Ø The Stock Exchanges are registered as Public Limited Companies under companies Act. Ø Presently DSE has 234 outstanding shares (members) while CSE has 140 shares outstanding. Ø The exchanges are Self Regulatory Organizations and their activities are regulated by - Articles of Association Own set of Rules, Regulations and Bye-laws Securities and Exchange Ordinance 1969 Securities and Exchange Rules 1987 Other relevant laws.

Capital Market in Bangladesh Basic Markets p Public Market : For general trading p Spot Market : For pre-book closer trading p Block Market : For bulk volume trading p Odd lot Market : For odd lot trading Trading Session Trading at DSE is performed through a non-stop platform in following sessions : Continuous Trading hours : 10. 00 AM to 2. 00 PM Trading day : Sunday To Thursday.

Capital Market in Bangladesh SETTLEMENT & CLEARANCE SYSTEM Primarily Settlement Period is T+1 and T+3 Days : ØAll the trades are cleared and settled, as per Settlement of Stock Exchange Transactions Regulations 1998. ØFrom functioning & transactions of all demated Securities are settled and registered through CDS ØA central clearing company is under process to ensure efficient financial settlement

Capital Market in Bangladesh Market Standard and Requirements q. Disclosure Requirements by the Listed Companies • Yearly Audited Financial Statement within four months of the year end. • Half-yearly Un-audited financial statements within one month of the first half-year end. • Price Sensitive disclosures q. It is mandatory to follow in preparation of the accounts • International Accounting Standard (IAS) • International Standards for Auditing (ISA) q Corporate Governance • All the listed companies are required to adopt the Corporate Governance Guidelines issued by SEC and required by Listing Regulation

Capital Market in Bangladesh Featured by: Low Ratio of Market Capitalization to GDP Country M. Cap (US $ bn) GDP (US $ bn) M. Cap to GDP ratio M. Cap to Transaction Bangladesh ( DGEN) 5. 96 63. 73 9. 35% 0. 17% India (BSE) 730. 00 854. 48 85. 43% 0. 61% Pakistan (Karachi SE) 46. 69 128. 99 36. 20% 0. 82% Sri Lanka (CSE) 8. 38 26. 18 32. 01% 0. 22% Source IMF World Economic Outlook & Website of Stock Exchanges : of Respective Countries.

Capital Market in Bangladesh Basic Market Statistics Total Issued Capital of all listed Securities US $ 2. 24 bn LISTED SECURITIES Market Capitalization of all listed Securities US $ As on April, 2007 5. 96 bn => Companies : Companies 258 ( A – 142 , B - 29, G-1, N-7, Z - 86) => Mutual Funds : 14 => Debentures : 08 All Securities are Distributed in 16 Sectors : => Govt. T. Bond : 42 1. Banks 2. Investment 3. Engineering 4. Food & Allied Products 5. Fuel & Power 6. Jute 7. Textile 8. Pharmaceuticals & Chemicals 9. Paper & Printing 10. Services & Real Estate 11. Cement 12. IT 13. Tannary Industries 14. Ceramic Industry

Capital Market in Bangladesh COMPANIES UNDER CDS Particulars No. Securities under the CDBL 153 111 3 Companies under the CDBL IPO (upcoming) Market Cap Tk. in mn % of total Market cap 268, 654 80. 39 --- 343, 315 83. 21 Multinational & Joint Venture Companies Listed Particulars No. of company Market Cap. in mn % of total market cap. Multinational Companies 12 80319. 16 19. 86 Joint Venture Companies 6 6101. 46 2. 25

Capital Market in Bangladesh 5 YEARS MARKET PERFORMANCE (DSE only)

Capital Market in Bangladesh Sectoral Market Capitalization as of April 2007

Capital Market in Bangladesh Sectoral Turnover during 2006

Capital Market in Bangladesh Weighted Average Sectoral P/E during April, 2007

Capital Market in Bangladesh Dividend of Listed Companies over the Years by Sector Bank Dec 2003 Sector Cement Bank Food & allied Ceramics Insurance Food & allied ' Insurance 'Investment IT Jute' Miscellaneous Pharmaceuticals Service & Real Estate Tannery Textile Cement Engineering Fuel & Power ' Insurance 'Investment IT Jute' Miscellaneous Pharmaceuticals Service & Real Estate Tannery Dividend Dec 2005 Dec 2006 % December 2005 Dividend Average % December 2006 34. 98 35. 05 5. 99 6. 56 25. 22 0. 99 11. 14 5. 05 25. 31 20. 81 12. 44 21. 53 18. 32 32. 71 27. 92 19. 28 18. 33 50. 39 40. 24 22. 57 9. 33 7. 50 2. 89 18. 96 23. 49 22. 62 25. 49 18. 84 Average Dividend %a December 2003 Average Dividend % December 2004 25. 94 1. 21 3. 69 18. 84 7. 94 19. 38 8. 22 18. 25 9. 42 8. 83 19. 38 18. 25 20. 81 12. 44 24. 21 22. 24 21. 53 22. 24 8. 82 54. 44 105. 15 32. 71 2. 92 6. 21 Engineering Fuel & Power 23. 69 Average Dec 2004 54. 44 18. 16 1. 01 6. 25 105. 15 6. 68 13. 6 1. 56 5. 70 10. 26 18. 16 13. 56 12. 84 13. 6 12. 84 8. 92 10. 63 5. 15 6. 15 30. 26 2. 61 8. 57 8. 92 2. 17 7. 07 18. 58 21. 12 2. 61 1. 97 16: 66 20. 1 Textile 20. 57 5. 08 Paper and Printing 0. 31 19. 58 38. 56 3. 97 10. 46 10. 63 2. 89 23. 49 20. 32 25. 49 2. 17 1: 79 3. 19 23. 65 7. 54 5. 35 20. 07 4. 76 - 21. 12 1. 38 6. 38 2. 16 6. 00 5. 97 10: 79 12. 19 16: 66 21. 61 23. 65 7. 54 5. 08 5. 35 4. 76 6. 38

Capital Market in Bangladesh

Capital Market in Bangladesh Statistics of IPO Subscription

Capital Market in Bangladesh DIRECT LISTING Provisions Issuer Paid up Capital Total Offloading For General Public/Ins Tk. in mn Dhaka electric Supply Co. Ltd. (DESCO) 1, 271 317 286 Power Grid Co. of BD. Ltd. (POWERGRID) 3, 643 910 865

Capital Market in Bangladesh Future Prospects The capital market in Bangladesh yet far from its real potentials. From present stage, the major future events that will change the market are highlighted as: Ø Within 3 to 6 months 8 large profitable government enterprises are going to be listed under Direct Listing Method adding value worth another 1 billion Dollar. Ø The Telecom Giants in Bangladesh are finalizing their offers for IPO in the market. Ø Power and energy sectors demand for capital is 5 to 10 billion dollar within short time to meet the immediate needs of 5000 MW power demand. (Contd. )

Capital Market in Bangladesh Future Prospects (contd. ) Ø A deep sea port requiring 1 billion dollar is going to start with a policy decision that it will also be listed. Ø The Pharmaceutical sector and API enjoying WTO benefit is growing sharply. Ø Textile sector as backward linkage to thriving export oriented garments industries is booming. Ø Export oriented food processing industry needs huge capital and technical capacity to meet the growing standards in global market for marine food, fruits and poultry. Ø IT sector with our talented developers, yet to demonstrate the massive potentials of software industry of the country.

Capital Market in Bangladesh Future Programs for Further Development 1. Active market of government, municipal and corporate bonds beside the corporate bonds to create alternative investment. 2. All securities to be brought under CDS within 2 years. 3. All major infrastructure companies, specially those in power, telecommunication and energy sector are to be listed ensure to broaden the market depth with at least US$ 15 billion market cap by 2009 having daily average turnover from current level of average of 10 to 15 million dollar to a level of 70 to 100 million dollar 2 years. 4. To strengthen merchant banks’ capacity to be more active. 5. Ensuring speedy disposal of decisions for market operation. 6. Ensuring greater degree of transparency in financial disclosure and management structure for better corporate governance.