Trends of Securities Markets in Bangladesh.
Securities markets in Bangladesh were established about 48 years back in 1954. But formal trading began in 1956. Their activities are controlled and regulated by their Article of Association along with other government regulations subject to amendment from time to time.
The Capital Issue Act, 1954, however, is one of the pieces of legislation governing the stock exchange in the country. The then only securities market in Bangladesh, the Dhaka Stock Exchange Ltd. suspended its trading and other administrative activities in 1971 after the independence of the country. Later on, in 1976, it resumed its activities with the changes in government policies. Trends of Securities Markets in Bangladesh.
Activities of the securities markets improved since 1985 and gained momentum from early 1991, which would be shown in the findings of the study in a later section. As of 30th June 2000 there were 239 listed securities with Dhaka Stock Exchange while there were only 138 securities in 1991. Listed securities comprised shares of 219 companies, 10 mutual funds, and 10 debentures. During FY 1999-2000, 11 securities got listed with DSE, the issued capital of which was Tk. 2,046.5 million.
On the same date, the total number of tradable securities in DSE was Tk. 685.69 million with the total issued capital of Tk. 30,517 million. In this year the number of tradable securities was increased by 25.52% and the total issued capital increased by 6.39%. Total market capitalization as on 30th June 2000 of all listed securities in DSE amounted to Tk. 54,004 million as compared to Tk. 50,748.41 million as on 30th June 1999 with an increase in market capitalization of 6.425%[Annual Report of SEC, 1999-2000].
The present market capitalization is roughly 2% of Gross Domestic Product (GDP) of the country. In 1999-2000 turnover of shares and debentures recorded a decrease of 47% to Tk. 27.60 billion as against Tk. 51.90 billion from 1998-1999. The turnover volume registered a 51% decline from comparing the period of 1998-1999; 651.4 million from 1331.2 million.
The DSE all-share price index stood up to 561 points on 29th June from 484 points of 31st January 2000. This is undoubtedly the sign of reviving confidence from the investors.