Dhaka Stock Exchange

By: EconomyWatch   Date: 23 November 2010

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A Brief Introduction to the Dhaka Stock Exchange

The Dhaka Stock Exchange is the prime stock exchange of Bangladesh established in 1954 in Motijheel. Stock exchanges started in Bangladesh with the Dhaka Stock Exchange.

Evolution of the Dhaka Stock Exchange

The need to develop a new stock exchange in Bangladesh was realized by the government of Bangladesh ever since Calcutta Stock Exchanges had stopped the transactions in Pakistani shares and securities.

The Dhaka Stock Exchange basically started with the formation of the Provincial Industrial Advisory Council.

Initially it was named the East Pakistan Stock Exchange Association Ltd. It was revised in 1964 and since then it has used the present name.

Although the Dhaka Stock Exchange was incorporated in 1954 it started trading formally from 1956.

Trading in the Dhaka Stock Exchange discontinued for a span of five years following the liberation war of 1971. Trading was regained from 1976.

In 1976, there were nine listed companies in Dhaka Stock Exchange with a paid up capital of Tk 137.52 million.

The Dhaka Stock Exchange actually witnessed high growth in 1983 when the market capitalization reached Tk 812 million.

By 1987, there was a spurt in the market size with the number of listed companies shooting up to 92.

With the opening up of the economy in the 90s the Dhaka Stock Exchange also rapidly developed.

Structure of the Dhaka Stock Exchange

By 2001 the number of listed securities in the Dhaka Stock Exchange was 244, number of listed companies was 224, number of listed debentures was 10, the number of shares issued by the listed companies was 666,553. The number of Mutual Funds were 72,250 and the market capitalization was Tk 72,168 million.

Nature of Dhaka Stock Exchange

The Dhaka Stock Exchange was a physical stock exchange in its initial days when trading took place in the open outcry system. But with the advent of new technology, the traditional mode of trading was abolished and was replaced by a fully automated computerized Stock Exchange. The trading session occurs in Five parts- the pre-opening session, opening session, continuous or regular trading session, closing session or post-closing session.

Functions of the Dhaka Stock Exchange

The following are the functions of the Dhaka Stock Exchange:

  • Listing of Companies
  • Providing screen based automated trading of securities.
  • Settlement of trading following the Settlement of Transactions Regulation.
  • Market Administration and Control
  • Market Surveillance
  • Publication of monthly review
  • Monitoring the activities of the listed companies following the Listing Regulations.
  • Formation of the Investors' Grievance Cell
  • Formation of the Investors' Protection Fund
  • Online Notification of price sensitive and other information about the listed companies.

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