Syed Kamal Uddin (Suman) [email protected]
INTERNSHIP REPORT ON HUMAN RESOURCE PROCESS OF DHAKA STOCK EXCHANGE LTD.
INTERNSHIP REPORT ON HUMAN RESOURCE PROCESS OF DHAKA STOCK EXCHANGE LIMITED
Professor M. Shahjahan Mina Advisor Faculty of Business and Economics Daffodil International University
Syed Kamal Uddin ID # 053-11-978 BBA (12th Batch) Major in Finance Faculty of Business & Economics Daffodil International University
Daffodil International University September 09, 2009
Letter of Transmittal 23th February 2009
To Professor M. Shahjahan Mina Advisor Faculty of Business and Economics Daffodil International University
Subject: Submission of Internship Report.
Dear Sir With proper honor I would like to state that I have completed the Internship Report assigned by you named “Human Resource Process of Dhaka Stock Exchange Ltd”. I have tried my best to fulfill all the requirements to make my Internship Report according to your expectation. Without the sincere co-operation and proper guidance of you, it is not possible for me to prepare the report. For this act of kindness I am grateful to you. So, I would like to request you to accept my Internship Report that is enclosed with this application for your kind consideration.
Syed Kamal Uddin ID # 053-11-978 BBA (12th Batch) Major in Finance Faculty of Business & Economics Daffodil International University
Daffodil International University
Certificate of Approval This is to certify that the Internship Report on “Human Resource Process of Dhaka Stock Exchange Ltd.” in the bona fide record at the report is done by Syed Kamal Uddin, ID # 053-11978, of the Department of Business Administration; Daffodil International University has been approved for presentation and defence/viva-voce. Under my supervision Syed Kanal Uddin worked with Dhaka Stock Exchange Ltd. as an Intern.
The Report has been prepared under my guidance and is a record of the bona fide work carried out successfully. It has indeed been a great pleasure working with him. I wish him all success in life.
…………………………………… Professor M. Shahjahan Mina Advisor Faculty of Business and Economics Daffodil International University …………………………………… Date
19th February 2009
Letter of Authorization
This is to certify that Mr. Syed Kamal Uddin has been doing Internship Program in Dhaka Stock Exchange Ltd under Human Resources Department. from 3 rd May 2009. He has been doing BBA from Faculty of Business and Economics, Department of Business Administration, Daffodil International University. ‘Internship’ is a part of his BBA program. We have tried our best to provide him all the assistance to complete his internship as a part of his BBA. I hope that the report of Mr. Syed Kamal Uddin will be effective for anybody and any organization to get proper knowledge about the Human Resources Management. I wish him all the success in his life.
Ms. Hosne Ara Pervin Assistant General Manger HRM, Administration & Training Affairs Dhaka Stock Exchange Limited.
I do hereby solemnly declare that the work presented in this Internship Report has been carried out by me and has not been previously submitted to any other University/College/Organization for an academic qualification/certificate/diploma or degree. The work I have presented does not breach any existing copyright and no portion of this report is copied from any work done earlier for a degree or otherwise. I further undertake to identify the Department against any loss or damage arising from breach of the foregoing obligations.
………………………………. Syed Kamal Uddin ID # 053-11-978 Batch: 12th, BBA (Finance) ………………………………. Date
Internship in BBA program is a scope of gathering practical knowledge on corporate environment by engaging in an organization for a certain period. This report on is the result of a survey that is conducted during the internship period in DSE. Several Multinational stock exchanges are operating their activities since long time. They are playing a very important role in enhancing the quality of the stock exchange service in the country. Basically these multinational stock exchanges are providing services to the local and Govt. stock exchange of our country regarding foreign trade transaction. In quality maintenance, stock exchange plays an important role. A good harmony between foreign and local stock exchange can ensure a quality service in international trade service. The position of the multinational stock exchange in this market gives us a view about their performance and overall market condition. In this report, an attempt has been made to portray a picture on market condition and service quality of institutional stock exchange organizations in our country.
ACKNOWLEDGEMENT Internship program in Dhaka Stock Exchange Ltd. has given me practical orientations with the real work life. One individual without the help of others can complete no work. In every step of this study many individuals and institutional experts supported me. It gives me an immense pleasure to acknowledge them with my gratitude. First of all, I want to express my heartfelt gratitude to Almighty Allah without whose help it would not have been possible for me to prepare this paper. I would like to express my deep sense of gratitude to all those who are always a source of inspiration for their involvement, unconditional cooperation and support in all my academic endeavors. Without their encouragement, I could not stand in pride as having done some academic work. I am indebted to all of them. It would be unthinkable to prepare such a paper and present it in a lucid manner without the help of my supervisor Professor M. Shahjahan Mina, Advisor, Daffodil International University. I would like to extent my gratitude to Ms. Hosne Ara Pervin, AGM, HRM, Administration & Training Affairs, Dhaka Stock Exchange Ltd, for her kind advice and suggestions. Then I would like to thanks Md. Saiful Islam, Executive, HRM, Administration & Training Affairs and Mr. Mohammad Ebna Reaz, Executive Officer, Merchant Banking Division, South East Bank Ltd. and all superior, subordinate and colleague of “Dhaka Stock Exchange Ltd.” for their advice and support and also the classmates of BBA, Daffodil International University who made it easy for me to complete university life. I would like to express my gratitude to Research, Development & Information, Public Relations & Publications Department, Monitoring, Investigation & Compliance, Market Operation, and other personnel of for their cooperation to make this report effective.
I would like to thank all those who contributed through their comments and suggestions to prepare this paper in a comprehensive manner. In order to prepare this paper I tried to devote my best effort and knowledge at a great extent. I beg pardon to my supervisor for my unintentional error, if any. Finally I would like to thank my family for their support and help during the entire tenure of BBA. II
EXECUTIVE SUMMARY It gives me immense pleasure that during internship period, as part of the BBA program. The internship report is prepared with respect to the two months internship program in Dhaka Stock Exchange Ltd. The internship program helped me a lot to learn about the practical environment and situation of a financial institution and also make up a bridge between the theoretical and practical aspects and also to implement my theoretical knowledge in to the practical and realistic work environment.
This report is composed of six chapters, which are further divided into different parts. In the first chapter the introductory portion has been presented along with background of the study, benefit of study and the objective of the study and the methodology, limitation and an overview of DSE, has been discussed in chapter two. Chapter three deals with the capital markets, primary market, secondary market, securities and exchange commission, functions of capital market, surveillance of DSE, instrument available in the capital market, share categorization: A, B, G, Z & N, total listed company, and Central Depository Bangladesh Limited (CDBL).
In Chapter four, discussed responsibilities of HR, admin & training affairs department, routine tasks, training activities, disciplinary procedure, employee benefits and HR policy for DSE employee. In chapter five, I have highlighted the recruitment and selection process of DSE. In chapter six, I have highlighted the, findings recommendation and conclusion, which includes details. I tried to bridge up all the findings based on analysis and discussions. While preparing the report I always tried my best level to make it authentic and at the same time easily understandable. For this, I came up with a number of reference books and journals to get the theoretical backup. In spite of my heart and soul effort there may be some mistakes and unforeseen errors, which may arise due to my naive or inexperience state.
The practical activities of different desks what I have done is outlined in this report. Various rules and regulations, policies and procedures relating to different activities have also been enumerated here
DSE has lots of scope to improve in this market as they have some competitive advantages as a world’s one of the largest Stock exchange .It has number of branches around the Bangladesh. Which can play an important role to create a positive impression in the market.
Chapter One: Introductory Part
1.2 Origin of the Study
1.3 Background of the study
1.4 Statement of the Problem
1.5 Objectives of the Study
1.5.1 Broad Objective
1.5.2 Specific objectives
1. 6 Benefit Of The Study
Chapter Two: Overview of Dhaka Stock Exchange Limited
2.1 DSE at a Glance
2.3 History of DSE
2.3.1 DSE Tower at Nikunja
2.4 Legal Control- DSE As An Organization
2.5 The Major Functions Of DSE
2.7 Policy Making Body: The Board Of Directors
2.8 DSE Management
2.8.1 DSE Board of Directors 2.9 Other Activities 2.10 Different Departments Of DSE 2.11 DSE Website 2.12 Organogram Of DSE
Chapter-3: Capital Market: DSE
16 18 18 19 20
3.1 Capital Market
3.2 Primary Market
3.3 Secondary Market
3.4 Securities And Exchange Commission
3.5 DSE Ranked Fourth Best Performing Exchange In The World
3.6 Market Development
3.7 Surveillance Of DSE
3.7.1 Price Monitoring
188.8.131.52 Surveillance Actions
184.108.40.206 Rumor verification
3.7.2 Position Monitoring
3.8 Market Expansion
3.9 Technical Development
3.10 Global Economy
3.11 Bangladesh Economy
3.12 The Global Stock Market
3.13 Bangladesh Stock Market
3.14 Market Capitalization
3.15 Instrument Available In The Capital Market
3.16 Share Categorization: A, B, G, Z & N
3.17 Total Listed Company
3.17.1 Listed Sector Of DSE 3.18 Central Depository Bangladesh Limited 3.18.1 What Is A Depository?
41 41 42
Chapter-4: Human Resources Department of DSE
4.1 Present Organogram Of Human Resources Department
4.2 Responsibilities Of HRM, Admin & Training Affairs Department
4.3 Key Functions of HRD
4.3.3 Induction and Orientation
220.127.116.11 Local Training 18.104.22.168 Overseas Training
4.3.6 Performance Appraisal
22.214.171.124 Rewarding the Good Employees
4.3.8 Personnel Development
4.3.9 Recruitment of Intern
4.3.10 Human Rights at Work Place
126.96.36.199 Ordinary Leave
188.8.131.52 Extra-ordinary leave
4.3.13 Submission of Annual Confidential Report (ACR)
4.3.14 Preserve All Employees Personal File
4.3.15 Proper Implementation of DSE Service Rules
4.3.17 Employee Benefits
184.108.40.206 Festival Bonus
220.127.116.11 Employee Remuneration
18.104.22.168 Food Allowance
22.214.171.124 Special Bonus/Allowance
4.3.18 Payment of Compensation (Group Insurance)
126.96.36.199 Health Insurance
188.8.131.52 Provident Fund
Chapter- 5: Recruitment & Selection Process Of DSE
5.2 Sources of Recruitment
5.2.1 Recruitment process is as follows 5.3 Recruitment Procedure
5.3.1 External Recruitment
5.3.2 Media Advertisement
5.3.3 University Recruiting
5.3.6 Internal Recruitment
5.5 Selection Criteria
5.6 Categories of Criteria
5.6.1 Formal Education
5.6.2 Personal Characteristics and Personality Type
5.7 Selection Process
5.7.1 Step 1: Initial Screening
5.7.2 Step 2: Completing the Application Form
5.7.3 Step 3: Employment Written Test
5.7.4 Step 4: Cognitive Ability Test
5.7.5 Step 5: Employment Interview
5.7.6 Step 6: Reference & Medical Check Up
5.7.7 Step 7: Selection Decision
5.7.8 Step 8: Job Offer
5.9 Critical Aspects of Labor force of DSE
Chapter- 6: Findings, Recommendations and Conclusion
6.1 Findings on HRD
6.2 Staff or Personnel Planning
6.3 Lack of Forecasting of Internal and External Recruitments
6.4 Reference Checking
6.5 Equal Employment Opportunity Benefits
6.6 Absence of Diverse Workforce
7.1 Recommendations 7.2 Conclusion
1.1 Introduction Bangladesh capital market is one of the smallest in Asia but the third largest in the south Asia region. It has two full-fledged automated stock exchanges namely Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) and an over-the counter exchange operated by CSE. It also consists of a dedicated regulator, he Securities and Exchange Commission (SEC), since, it implements rules and regulations, monitors their implications to operate and develop the capital market. It consists of Central Depository Bangladesh Limited (CDBL), the only Central Depository in Bangladesh that provides facilities for the settlement of transactions of dematerialized securities in CSE and DSE.
1.2 Origin Of The Report This paper has been prepared as partial fulfillment of the internship program of the BBA Program, under Daffodil International University. This report “Human Resources Process of Dhaka Stock Exchange Ltd.” is the output of the 3 months long internship program at Dhaka Stock Exchange Ltd., Dhaka, Bangladesh. This report has been authorized by Ms. Hosne Ara Pervin, Assistant General Manager, HR, Admin & Training Affairs, Dhaka Stock Exchange Ltd and approved Professor M. Shahjahan Mina, Advisor, Daffodil International University.
1.3 Background Of The Study As a mandatory part of BBA program all the students have to undergo an internship program of three months duration in any organization with a view to acquiring practical knowledge. Theoretical Knowledge is not enough for a business student. There is a gap between the theoretical knowledge and practical knowledge. Our internship program has been launched mainly to bridge the gap. Dhaka Stock Exchange Ltd is the largest capital market in Bangladesh. The organization offers students the perfect opportunity to gain on-the-job experience by supporting and guiding them during their internship program in many business areas. After all they know that today’s students can be tomorrow’s most efficient employees. Through internship
students become aware of organization al culture and learn how to show professional excellence to a great extent. This learning helps them when they finally enter into practical field.
1.4 Statement Of The Problem In the context of Bangladesh now capital market is very much become large. So it is a challenge for any employees to survive successfully in this competitive environment. In order to survive, its human resource management must be effective and efficient. Now a day, Human Resources Department is an integral part of any organization as the success or failure of an organization depends to a large extent on its human resources. It is people who make things happen finally. Other factors of production are completely useless without people. It is the responsibility of HR department to recruit the right people at the right job at the right time. I have joined as an Intern in Dhaka Stock Exchange Ltd (DSE) and interviewed several Executives of Human Resource Department during my internship period. But while working on recruitment procedures of this organization.
I have observed some limitations
like- absence of equal employment benefits, absence of diverse workforce, absence of staff planning, lack of forecasting of internal and external recruitment, absence of inter organizational communication and interpersonal skill etc. So the purpose of my report to view and analyze the Human Resources Process of DSE, identify problems areas and recommend the ways to overcome.
1.5 Objectives Of Study In this study I have chosen Human Resources Process of Dhaka Stock Exchange Ltd as my assignment topic. I have collected the information related to the topic through the Internet and personal interview. As a student of BBA I was encouraged to find the similarities between my learning and real world situation. So, this can also be considered as the objective of the paper in a broader sense.
1.5.1 Broad Objective Objective of this report is to evaluate the activities of overall Human Resources Process of the Dhaka Stock Exchange Ltd and derive findings concentrating on problem areas. 1.5.2 Specific objectives Following specific objectives are identified: To study and analyze Dhaka Stock Exchange Ltd., with special emphasis on its background, functional environment, & HRM.
Overview of the organization and their HR Policies and Procedures.
How does the organization monitor the implementation.
To study and analyze the current recruitment and selection process.
Detail analysis of sources of potential candidates.
Derive lessons learnt during the whole process.
To have an overall idea by linking the theoretical concept of hiring Process with compensation strategy
To focus on the significance of doing the compensation strategy during the hiring Process in the organization
To find problem areas and recommend suggestions to overcome.
1.6 Benefit Of The Study The report provides the necessary information of the HR department and recruitment and selection process of Dhaka Stock Exchange Ltd. The information will be very helpful for the HR department to overcome the weak areas and determine necessary adjustment to increase the efficiency of HR personnel. The study especially focuses on the recruitment and selection process and has a brief idea about other HR related aspects. The most likely benefits are:
The study provides an insight to understand HR activities of Dhaka Stock Exchange Ltd.
The study reveals the overall guideline of a standard recruitment and selection procedure
The study provides necessary information regarding the difficulties faced by the organization.
1.7 Methodology The report is prepared on the basis of overall performance of DSE. Different record, statement, Annual report has helped me preparing this report. The subject material of this report is on primary and secondary sources of data and information.
Sources of information Primary source
Observation of various departments.
Interview of different employees. Secondary source
Annual report of DSE.
Extensive literature search on the basis of document and publication from DSE library.
Journal & publication from different local and International organization
DSE Website: www.dsebd.org
It’s a great pleasure for me to work on this report. During preparing my report I will learn lots of new things, which are much related to my report materials. It helps us to fulfill my study, which is really needed for me. But still I face some problem for my report.
Due to the time constraints it’s really hard for us to collect all the data. Time is so limited and I do not have enough time to collect the data.
Still I have tried our best to add more authentic information as much as possible for us. I think that my report will be helpful for those people who are interested to know about the compensation process.
I have also information limitations because the people I have interviewed they did not disclose information as I needed. Moreover, they skipped much information technically likeinternal and external recruitment budgeting process. 1. Improper combination among various departments. 2. Due to the lack of time I could not acquire in depth knowledge of the activities of different department perfectly and clearly. 3. Adequate book, publication and journals were not available. 4. Insufficiency of necessary information and data.
Overview of Dhaka Stock Exchange Limited
DSE New Building at Nikunja, Uttara
2.1 DSE At A Glance Incorporated as East Pakistan Stock Exchange Association Ltd.:
28th April 1954
Start of Formal Trading:
Renamed as East Pakistan Stock Exchange Ltd.:
23rd June 1962
Renamed as Dacca Stock Exchange Ltd.:
13th May 1964
Trading Suspended under new State Policy:
16th December 1971
Trading Resumed in Bangladesh:
16 August 1976
Starting Of All Share price Index calculation:
16th September 1986
Share price Indices calculation on basis of IFC Designed formula:
1st November 1993
Starting of Automated trading:
10th August 1998
Starting Of DSE-20 Index calculation:
Starting Of DSE General Index calculation:
27th November 2001
Start of CDS through CDBL:
24th January 2004
DSE All share price Index (DSI) Re introduced:
28th March 2005
2.2 Preamble The Dhaka Stock Exchange is the prime bourse of the country. Through its nonstop highly fault-tolerate screen based automated trading system the exchange has been offering facilities for transparent and highly efficient provisions for secondary market activities of securities. The management of the Exchange is vested with the Board of Directors comprising 12 members elected from the shareholders of DSE, 12 non-elected independent Directors representing different Institutions, Chambers and Professional bodies and the CEO of the Exchange A team of qualified executives runs the overall operations of the exchange. The bourse at present offers trading facilities for 401 securities worth Tk. 10110.30 billion-market capitalization, which contributes 18.20% of the total GDP of the country. With a nationwide coverage through branches of brokers and dealer, DSE espouse shared vision of Bangladesh business all over the country. The exchange maintains the lead in providing a launching pad for mobilizing saving of Bangladesh living home and abroad. Besides Bangladesh, nonresident & foreign institutional investors have been showing growing interest in this market over the years.
2.3 History Of DSE The Necessity Of Establishing A Stock Exchange In The Then East Pakistan Was First Decided By The Government When, Early In 1952.It Was Learnt That The Calcutta Stock Exchange Had Prohibited The Transactions In Pakistani Shares And Securities. The Provincial Industrial Advisory Council Soon Thereafter Set Up An Organizing Committee For The Formation Of A Stock Exchange In East Pakistan. A Decisive Step Was Taken The Second Meeting Of The Organizing Committee Held On The 13th March 1953. In The Cabinet Room, Eden Building, Under The Chairmanship Of Mr. A. Khaleeli, Secretary Government Of East Bengal, Commerce, Labor And Industries Department At Which Various Aspects Of The Issue Were Discussed In Detail. The Then Central Governments Proposal Regarding The Karachi Stock Exchange Opening A Branch At Dhaka. , Did Not Find Favour With The Meeting Who Felt That East Pakistan
Should Have An Independent Stock Exchange. It Was Suggested That Dhaka Narayanganj Chamber of Commerce & Industry Should Approach Its Members For Parchase Of Membership Cards At RS.2000 Each For The Proposed Stock Exchange. The Location Of The Exchange It Was Thought Should Be Either Dhaka Narayanganj Or Chittagong. An Organizing Committee Was Appointed Consisting Of Leading Commercial And Industrial Personalities Of The Province With Mr. Mehdi Ispahani As The Convener In Order To Organize The Exchange. The Chamber Informed Its Members And Members Of Its Affiliated Associations Of The Proceedings Of The Above Meeting, Requesting Them To Intimate Whether They Were Interested In Joining The Proposed Stock Exchange. This Was Followed By A Meeting, At The Chamber Of About 100 Persons Interested In The Formation Of The Exchange On 07.07.1953. The Meeting Invited 8 Gentleman To Become Promoters Of The Exchange With Mr. M Mehdi Ispahani As The Convener And Authorized Them To Draw Up The Memorandum And Article Of Association Of The Exchange And Proceed To Obtain Register Under The Companies Act.1913. The Other 7 Promoters Of The Exchange Were Mr. J M Addision-Scott, Mr. Mhodammed Hanif, Mr. A C Jain, Mr. A K Khan, Mr M Shabbir Ahmed And Mr. Sakhawat Hossin. It Was Also Decided That Membership Fee Was To Be Rs.2000 And Subscription Rate At 15 Per Month. The Exchange Was To Consist Of Not More Than 150 Members. A Meeting Of The Promoters Was Held At The Chamber On 03.09.1953 When It Was Decided To Appoint Orr Dignam & Co., Solicitors To Draw Up The Memorandum And Articles Of Association Of The Stock Exchange Based On The Rules Of Stock Exchange Existing In Other Countries And Taking Into Account Local Conditions. The 8 Promoters Incorporated The Formation As The East Pakistan Stock Exchange Association Ltd. On 28.04.1954. As Public Company. On 23.06.1962 The Name Was Revised To East Pakistan Stock Exchange Ltd. Again On 14.05.1964 The Name Of East Pakistan Stock Exchange Limited Was Changed To "Dhaka Stock Exchange Ltd."
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At The Time Of Incorporation The Authorized Capital Of The Exchange Was Rs. 300000 Divided Into 150 Shares. Of Rs. 2000 each and by an extra ordinary general meeting adopted at the extra ordinary general meeting held on 22.02.1964 the authorized capital of the exchange was increased to Tk. 500000 divided into 250 shares of Tk. 2000 each. The paid up capital of the exchange now stoods at Tk.460000 dividend into 230 shares of Tk. 2000 each. However 35 shares out of 230 shares were issued at TK. 80,00,000 only per share of TK. 2000 with a premium of TK. 79,98,000. Although incorporated in 1954, the formal trading was started in 1956 at Narayanganj after obtaining the certificates of commencement of business. But in 1958 it was shifted to Dhaka and started functioning at the Narayangonj chamber building in Motijheel C/A. On 1.10.1957 the stock exchange purchase a land measuring 8.75 Kattah at 9F Motijheel C/A from the Government and shifted the stock Exchange to its own location in 1959.
2.3.1 DSE Tower At Nikunja DSE has undertaken the construction work for its Second 14-storied 3 level basement building at Nikunja with all the state of the art commercial facilities; it is expected to be a landmark building. It will be a modern building with all modern amenities. It is to be mentioned here that the Hon’ble Prime Minister Sheikh Hasina specially allotted this piece of land reigned in 1998. Dhaka Stock Exchange took over possession of the four-bigah land on 25th November 1997 from RAJUK. Construction of DSE Tower is expected to be completed in three years. The need for construction of DSE Tower at Nikunja was felt necessary to meet the growing demand of facilities from all the parties involved with this market, which by the existing one may not be fulfilled. As the activities of the prime bourse is expanding rapidly in the last decade, this existing premise cannot accommodate all the facilities in its present establishment at Motijheel for which DSE appealed to the then Government for a big plot showing the justification. The Government was pleased and allocated the 4 bigah land in the name of Dhaka Stock Exchange Ltd. Dhaka Stock Exchange on 30th April, 2006 signed an agreement with Development Design Consultants Ltd. for architectural and engineering consulting services for construction of multi-storied DSE Tower. To mention, DSE Tower will be set up on 1.33 acres (57,600 sfts) of land. The projected building area will be 741,109
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square feet. DSE signed a contract with GBB Limited on February 28, 2007 for the first phase construction work of 14 storied with 3-basement DSE Tower building for Taka 89.97 crore. The contractor, GBB Limited, has started the construction work in the month of April 2007 and the construction work is in progress and is expected to be completed by 2010.The basement work of the DSE Tower has already been completed. By end of December 2008, 15% of the work is reported to have been completed as against target progress of 39.79% as per original program.
Regulating the market structure through proper rules and strict compliance by members.
Expansion of DSE trading network to cover 504 thanas. Introduce Book Building system in Bangladesh capital market.
Introducing derivative market
Continuous promotion of stock investment throughout the country.
Create opportunity to cross border trading with SAFE countries.
Introduce Global Depository Receipts (GDR) 2.3.3 Mission To create an efficient and transparent Market facilitating entrepreneurs to raise capital, so that it accelerates industrial growth for overall benefit of the economy of the country.
Develop a strong platform for entrepreneurs for raising capital;
Provide an investment opportunity for small and large investors;
Develop a transparent market 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;
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Attract foreign institutional investors to invest in Bangladesh;
Collect, preserve, disseminate data and information on stock exchange;
2.4 Legal Control- DSE As An Organization The Dhaka Stock Exchange Ltd is registered as a Public Limited Company. It is a self-regulatory organization and its activities are regulated by: - Articles of Association - Own rules, regulations and byelaws - Companies Act 1994 - Securities and Exchange Ordinance 1969 - Securities and Exchange Rules 1987
2.5 The Major Functions Of DSE
Listing of Companies. (As per Listing Regulations).
Providing the screen based automated trading of listed Securities.
Settlement of trading. (As per Settlement of Transaction Regulations)
Gifting of share / granting approval to the transaction/transfer of share outside the trading system of the exchange (As per Listing Regulations 42)
Market Administration & Control.
Publication of Monthly Review.
Monitoring the activities of listed companies. (As per Listing Regulations).
Investor’s grievance Cell (Disposal of complaint bye laws 1997).
Investors Protection Fund (As per investor protection fund Regulations 1999)
Announcement of Price sensitive or other information about listed companies
2.6 Membership The DSE Currently has 238 members who are the shareholders of the public Limited Company. Membership is open to foreigners. The Securities and Exchange Commission
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(SEC) licenses members for conducting trading as Stock Brokers, Dealer or both all Brokerage house have been corporatized in 2006.
2.7 Policy Making Body: The Board Of Directors Through continuous reforms, Dhaka Stock Exchange has emerged into a modern Exchange. The day-to-day affair of the DSE is run by a highly qualified and trained executive team who works independently under polices set by the Board of Directors.
The DSE Board comprises of 25 members of whom 12 are elected through direct from the 235 shareholders of DSE. The remaining 13 Board Members are Ex-Officio. They include 12 members representing distinguished personalities from different key economic and social arena of the country. The CEO of the Exchange is also a Director of the Board. One councilor to be nominated by the ministry of Finance not below the rank and status of Joint Secretary. One councilor to be nominated by the Bangladesh Bank from amongst its officers of or above the rank of General Manager. President of Institute of Chartered Accountants of Bangladesh, Ex-officio Member. President of Federation of Bangladesh Chamber of Commerce and Industry, Exofficio Member. President of Metropolitan Chamber of Commerce and Industry, Ex-officio Member. President of Dhaka Chamber of Commerce and Industry, Ex-officio Member. One councilor to be nominate by the Ministry of Commerce not below the rank and status of joint Secretary as member. One councilor to be nominate by the Ministry of Law not below the rank and status of joint Secretary as member.
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One councilor to be nominate by the Ministry of Industry not below the rank and status of joint Secretary as member. President of Supreme Court Bar Association, Ex-officio Member. Head of the Department Finance /Economics, Dhaka
2.8 DSE Management A highly qualified and trained team of Executive report to the CEO about the day-to-day affairs of DSE. The management team runs independently under polices set by the Board of Directors. A Chief Operating Officer, Chief Financial Officer, and Chief Technology officer assists the CEO to manage day-to-day affairs of the bourse.
Chief Financial Officer & Acting CEO Satipati Moitra, M.Com, FCMA PABX : 9564601,7175705-9, Ext-107 Mobile: 01713425800 Email : mailto:[email protected] [email protected]
Chief Technology Officer A. S. M. Khairuzzaman Phone: 9564601,7175703-11, Ext-123 Email : mailto:[email protected]
mailto:[email protected] [email protected]
General Manager & Secretary Shaikh Mohammadullah, MBA (IBA), FCS Phone: 9564601,7175705-9, Ext-102 Mobile: 01713333224 Email : [email protected]
, [email protected]
2.8.1 DSE Board of Directors
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Mr. Md. Rakibur Rahman
Room No - 508 , Stock Exchange Building , 9/F , Motijheel C.A., Dhaka-1000 Ph: 9551960, 9559925, PABX : 9564601, 7175705-9 Ext. 508
Navana Villa Flat No. 201, Plot No. 10 Road No. 118 Gulshan, Dhaka Phone: 8823500, 9895837 Mobile: 01819-219396
Suite No. 1002-3 9/E, Motijheel C/A, Dhaka-1000 Phone: 9561070, 9561232, 9564959, 9569302 Fax: 9562254, 9564991
Apartment 2B, House No.16, Road No. 01, Baridhara Diplomatic Zone, Dhaka-1212 Res: 8859055 Mobile : 01711-546802
Room No: 905, DSE Annex Building (8th Floor) 9/E, Motijheel C/A, Dhaka-1000 Phone: 7175716, 9570985, 7166096, 7170993-4 PABX :9564601, 7175705-9 Ext- 429
Phone: Mobile: 01715864740
Room No - 618, 619, 709, 715 Stock Exchange Building 9/F, Motijheel C.A. Dhaka-1000 Phone: 9551815, 9564573,9568417 PABX : 9564601,7175705-09 Ext-715/709
9/2, Bagabati Banerjee Road Hatkhola Dhaka - 1203 Mobile: 01711-537753
Room no. 704 (6th Floor), Modhumita Building, 158-160,Motijheel C.A., Dhaka-1000. Ph: 9557677 PABX : 9557677, 7168345
Road No. 104, House No. 5/F Flat No. A-4/S Gulshan -2, Dhaka - 1212 Phone: 8814385 Mobile: 0175212755
Mr. Saiful Islam Senior VicePresident, DSE
Mr. Md. Shakil Rizvi Vice-President, DSE
Mr. Abdul Haque Director, DSE
Mr. M.A. Quayum Director, DSE
Mr. Md. Hanif Bhuiya Director, DSE
Room no. 620 , 621 & 635 Stock Exchange Building 9/E, Motijheel C/A, Dhaka-1000 Mobile: 01713033829 Phone:9553321, 9563287,9554712 PABX :9564601, 7175705-09, Ext:620, 621, 635
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Ms. Lailun Nahar Ekram Director, DSE
Mr. Masudul Haque Director, DSE
Mr. Mohammad Nasir Uddin Chowdhury Director, DSE
Mr. Md. Rafiqul Islam Director, DSE
Mr. Md. Feroz Khan Director, DSE
Mr. Md. Shahjahan Director, DSE
House No. - 8A, Road No. - 50, Gulshan-2, Dhaka - 1212 Phone: 9887423, 9892714 Fax: 9894877
House No. 14 (5th Floor), Road No.- 140, Gulshan - 01, Dhaka - 1212 Res: 8855098 Mobile: 01711-567122
Suite No. - 603 (5th Floor), Modhumita Building, 158-160 Motijheel C/A, Dhaka-1000 Phone: 7174368, 7174451, 9561993
116, Bashir Uddin Road, Kalabagan, Dhanmondi, Dhaka-1205 Res: 9115571, 8144836 Mobile: 01711-542131
Room No. 322 9/E, Motijheel C/A, Dhaka-l000 Phone: 9561868, 9570496, 7174256, 7174315, 9556792 Fax: 9555384, 9562207
4/404, Eastern Point 8-9, Shantinagar, Dhaka Res: 8354163 Mobile: 01819-213180 Email: [email protected] [email protected]
Room No - 901 (8ht floor) 9/E, Motijheel C/A, Dhaka-l000 Phone: 9666927,9667011 PABX: 9564601 Ext-524
Phone: 9341147 Mobile: 01711-526213
Room No - 313 (2nd Floor) Stock Exchange Building 9/F, Motijheel C/A, Dhaka-l000 Phone: 9552390,9561667 PABX: 9564601 Ext-313
Phone: 8810256 Mobile: 01711-548744
Room No - 213 Stock Exchange Building 9/F, Motijheel C/A, Dhaka-l000 Phone: 9551403 PABX:9564601,7175705-09 Ext213
Phone: 9882204 Mobile: 01711 536876
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2.9 Other Activities DSE Publishes Monthly Review to keep investors community informed on the overall development in securities market. DSE also publishes a Bengali fortnightly and Information Booklet regularly. Besides publication of a Stock Market Terminology in both Bengali an English is in the offing. DSE has an arbitration system to resolve disputes or claims against members through a panel judges compromising 5 retried districts judges. Investors Protection Fund, which is contributed by the Brokers of the Exchange for the benefits of investors and managed by s board of trusty who are independent body from outside the Exchange.
2.10 Different Departments Of DSE Information & Communication Technology (ICT) Division
System & Market Admin
Web Dev & Int. trading
Network Local Com
Network Distance Com
MIS & Development
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Back Office Dev.
Clearing Accounts & Exchange DP
HRM, Administration & Training
Protocol, Logistics & Maintenance
Publication & Public Relations
Resources & Development &Library
Operation Division & CEOs Secretariat Surveillance
Internal Control & Audit
Monitoring, Investigation & Legal Affairs
PS of CEO
Listing Affairs & Market operation
2.11 DSE Website DSE has been introduced a data integrated website www.dsebd.org with real time market data where an investor can get basic information of all listed companies as well as associated trading information on securities arena.
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2.12 Organogram Of DSE ORGANOGRAM OF DSE Board of Directors
CEO - Chief Executive Officer
CTO-Chief Technical Officer
CFO-Chief Financial Officer
Internal Audit, Control & Compliance Committee
COO-Chief Operating Officer
ICT Division Administration Division
• System & Market Admin
• Web Dev & Int. trading • Network Local Com • Network Distance Com • Application Support • MIS & Development • Hardware Support • Back Office Dev.
•General Accounts •Clearing Accounts & Exchange DP
•DSE Clearing House & Special Clearing
•Board Affairs •Membership Affairs •HRM, Administration & Training
•Protocol, Logistics & Maintenance
•Publication & Public Relation
•Research developments &Information
•Security Section • Reception • Legal
• Surveillance • Internal Control & Audit
• Monitoring, Investigation & Legal Affairs
• PS of CEO • Listing Affairs & Market operation
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Capital Market: DSE
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3.1 Capital Market Sources from which long-term capital is raised for the setting up and sustained growth of companies. The Stock Exchange is a part of the capital market, not only because it readily provides money for new or existing ventures, but also because it helps investors to trade in their shares and maintains the liquidity of investment. Investment in further public and rights issues, convertible and non-convertible debentures, there the resources they need. A market in which long-term capital is raised by industry and commerce, the government and local authorities. The money comes from private investors, insurance companies, pension funds and bank and is usually arranged by issuing houses and merchant banks. Stock exchanges are also part of the capital marketing that they provide a market for the shares and loan stocks that represent the capital once it has been raised. It is the presence and sophistication of their capital markets that distinguishes the industrial countries from the developing countries, in that this facility for raising industrial and commercial capital is either absent or rudimentary in the letter.
3.2 Primary Market Primary market comprises of a market for new issue of shares, and debentures, where investors apply directly to the issuer/company for allotment & pay application money to the issuer‟s/company account. Primary market is where a issuer /company makes its contact directly with the public at large in search of capital distinguished from the secondary market. Where investors buy /sell listed shares on the stock exchange.
3.3 Secondary Market Secondary market comprises of the buyer and seller of shares and debentures subscribed to the share or debenture of the company. If one wishes to sell the same, it will be done in the secondary market similarly one can also buy the shares or debentures of a company from the secondary market (if the company is listed on the stock exchange) without having to wait for the company to come out with a new public issue.
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3.4 Securities And Exchange Commission The Securities and Exchange Commission (SEC) was established on 8 th June 1993 under the Securities and Exchange Commission Act, 1993. The Chairman and Members of the Commission are appointed by the government and have overall responsibility to administer securities legislation. The Commission, at present has three full time members, excluding the Chairman. The Commission is a statutory body and attached to the Ministry of Finance.
3.5 DSE Ranked Fourth Best Performing Exchange In The World While the global stock markets have taken a beating, the DSE has performed reasonably well. According to Bloomberg, the New York-based prestigious information services company, the DSE was the fourth best performing exchange in the world on a currencyadjusted basis in 2008. According to the 23 world indices, the Dhaka Stock Exchange has performed the best in comparison with the other important stock exchanges. I, therefore, congratulate all of you for the resounding success. I also congratulate the new government elected by the peoples of Bangladesh and I hope our securities market will see further growth during the tenure of the new government which assumed office on January 6,2009. The new government will hopefully stress the need for raising funds from the securities market, which will ultimately help industrialization of the country as well as mobilization of internal resources. We firmly believe in teamwork and excellent loyal, efficient and motivated team of employees is our harmonious strength. With a firm commitment to achieve an excellence in service, DSE has always tried for creating wide array of products and offer superior value proposition. To strengthen our technological platform, we have already installed state of the art technology. The resounding success that we have achieved last year was possible because of your relentless support to the DSE. Our commitment to you for making your investment to have an ever-increasing value has made possible to reach a commendable level of success.
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Securities market as a vital sector of the national economy continues to be very important particularly in the backdrop of keen competition and continuous globalisation process. We play a crucially important role in creating employment through investment.
3.6 Market Development DSE continued its efforts to develop the market through taking various reforms and programmes throughout the year. Since the inception of the DSE Training Academy on September 10, 2007, many training programmes for investors, authorised representatives, seminar on Derivatives, Financial Options and Futures for DSE officials and professionals took place during the period. Apart from DSE head office, many brokers and institutional investors are arranging awareness programmes in the newly opened Training Academy. Honorable Adviser to the Caretaker Government Dr. A.B Mirza Md. Azizul Islam inaugurated the DSE Academy aiming to help create a pro-active atmosphere in the securities market and thus build up a strong human resource for the growing market. Removing the prevailing weakness in fixed IPO Shares Pricing Method, DSE has been closely working with SEC to introduce Book-Building, alternative method of share price valuation. Under this method entrepreneurs will be encouraged to get their business ventures into the bourses as it will ensure them expected level of price of their shares. DSE as part of spreading awareness about the Book-Building method to extract time-bound opinion from the experts in Financial Markets including regulators and Academics arranged a workshop on “Book Building Method” on February 17, 2008 at its Boardroom. SEC Chairman Mr. Faruq Ahmad Siddiqi was the chief guest of the function. It is assumed that after the introduction of proposed Book Building Method profitable and fundamentally sound companies will come forward to the capital market. Direct listing of Jamuna Oil Company, Meghna Petroleum Ltd, Titas Gas Transmission and Distribution Co. Ltd, ACI Formulations and Shinepukur Ceramics fulfilled the investors‟ demand in the securities market. Of them, ACI Formulations and Shinepukur Ceramics were the first private companies to get direct listing. In another development DSE arranged investors‟ awareness programme of home and abroad during the year. To attract the Non-Resident Bangladeshis‟ investment in Australia to the country‟s capital market, a DSE delegation
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visited two major cities in Australia in April 2008. Meanwhile, DSE arranged a roundtable titled „global financial crisis and its impact on financial markets in Bangladesh‟ at Sonargaon Hotel in Dhaka on November 15,2008. Securities and Exchange Commission Chairman, Mr Faruq Ahmad Siddiqi was the chief guest in the programme while Deputy Governor of Bangladesh Bank Mr Ziaul Hasan Siddiqui was the special guest. DSE Senior Vice-president Mr Saiful Islam chaired. Mr MA Baqui Khalily, Professor of Department of Finance and Chairman of Centre for Corporate Governance and Finance Studies of Dhaka University presented a keynote paper. DSE also arranged the Second Conference of South Asian Federation of Exchanges (SAFE) during January 31 and February 01 in 2008 in Dhaka. The then Finance and Planning Adviser, Dr. A.B Mirza Md. Azizul Islam inaugurated the 2-day conference. While inaugurating the programme the Finance Adviser emphasised on joint and coordinated effort for strong and vibrant securities market. Top management officials including the CEOs of member exchanges from the SAARC regions participated the conference.
3.7 Surveillance Of DSE The main objective of the Surveillance function of the Exchange is to promote market integrity in two ways
By monitoring price and volume movements (volatility) as well as by detecting potential market abuses at a nascent stage, with a view to minimizing the ability of the market participants to influence the price of the scrip/scrips in the absence of any meaningful information.
By managing default risk by taking necessary actions timely.
Market Abuse is a broad term, which includes abnormal price/volume movement, artificial transactions, false or misleading impressions, insider trading, etc. In order to detect aberrant behavior/ movement, it is necessary to know the normal market behavior - The department carries out investigation, if necessary, based on the preliminary examination/analysis and suitable actions are taken against members involved based on the investigation.
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All the instruments traded in the market come under the Surveillance umbrella of DSE. Surveillance activities at the Exchange are divided broadly into two major segments
Price Monitoring: Price monitoring is manly related to the price movement/ abnormal fluctuation in prices or volumes etc.
Position Monitoring: The position monitoring relates mainly to abnormal positions of members, etc. in order to manage default risk.
3.7.1 Price Monitoring The functioning of the Price Monitoring is broadly divided into following activities – 184.108.40.206 Investigations Conducting in-depth investigations based on preliminary enquiries/analysis made into trading of the scrip. In case of irregularities observed, necessary actions are initiated or investigation case forwarded to SEC, if necessary through the CEO.
220.127.116.11 Surveillance Actions
Warning to Members The department may issue verbal/ written warning to member/s when a market irregularity in the scrip is suspected.
Imposition of penalty/ suspension The department, through the CEO, imposes penalty or suspend the member/s who are involved in market irregularities, based on the input/ evidence available from investigation report.
18.104.22.168 Rumor verification
Liaising with Compliance Officers of companies to obtain comments of the company on various price sensitive corporate news items appearing in selected News Papers.
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Comments received from the companies are disseminated to the market by way of online news bulletin.
Investigations based on rumor verifications are carried out, if required, to detect cases of suspected insider trading.
3.7.2 Position Monitoring The Surveillance Department closely monitors outstanding exposure of members on a daily basis. For this purpose, it observes various off-line and on-line market monitoring reports. The reports are scrutinized to ascertain whether there is excessive purchase or sale position build up compared to the normal business of the member, whether there are concentrated purchases or sales, whether the purchases have been made by inactive or financially weak members and even the quality of scrips is considered to assess the quality of exposure.
3.8 Market Expansion DSE opened its office in Sylhet on March 30, 2008. SEC Chairman Mr. Faruq Ahmad Siddiqi inaugurated the office. DSE is also working to open its branch offices in Khulna and Rajshahi to fulfill the demand of the investors across the country. We are in progress to establish four branch network offices in Dhaka.
3.9 Technical Development Considering recent market growth, the Automated Trading Server was upgraded twice during 2008. Firstly it was upgraded from HP NonStop S7802 to HP NonStop S7804 by adding 2 CPU during March 2008 and the capacity was upgraded from 50,000 trades per day to 1,00,000 trades per day. The total Trader Ids supported by the upgraded System was 3000. This highly scalable Trading Server was further upgraded to HP NonStop S7806 by adding another two CPU on December 21, 2008. The new HP NonStop S7806 is capable to handle approximately 1,50,000 trades per day. WAN (Wide Area Network) setup was further expanded by incorporating another three vendors (Network Service Provider) along with existing three vendors. Presently more than 165 Member firms are operating trading
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activities approximately from 480 remote locations of 14 districts. Two DSE Branch offices were running very smoothly at Chittagong and Sylhet. We are in progress to establish two new DSE branch offices at Khulna and Rajshahi as well as DSE network branches in Dhaka. Besides providing online trade data from MDS (Market data server) to DSE official website, Mobile phones, ETV, etc, DSE is in process to provide DSE online trade data to many renowned national/international companies like Bloomberg, Mubasher Trades and to some of the online edition of the national print media.
3.10 Global Economy The global financial crisis of 2008 was the worst of its kind since the Great Depression of 1930s. It became prominently visible in September, 2008 with the failure of several large United States-based financial firms. The underlying cause of the financial instability was the sub prime mortgage crisis. The financial crisis began in July 2007 (then referred to in the media as a "credit crunch" or "credit crisis"), when a loss of confidence by investors in the value of securitized ortgages in the United States resulted in a liquidity crisis. This prompted a substantial injection of capital into financial markets by the United States Federal Reserve, Bank of England and the European Central Bank. The TED (an acronym of T-Bill and Euro Dollar futures contract) spread, an indicator of perceived credit risk in the general economy, spiked up in July 2007, remained volatile for a year, then spiked even higher in September 2008, reaching a record 4.65% on October 10, 2008. In September 2008, the crisis deepened, as stock markets worldwide crashed and entered a period of high volatility, and a number of banking, mortgage and insurance company failures in the following weeks. Although America's housing collapse is often cited as having caused the crisis, the financial system was vulnerable because of intricate and highly-leveraged financial contracts and operations. In fact, U.S. monetary policy made the cost of credit negligible, therefore, encouraging high levels of leverage, and generally a "hypertrophy of the financial sector". After affecting banking and credit in the United States, the situation evolved into a global general financial crisis verging on a systemic crisis. Domino effect, as many institutions had
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financial links, and also psychological contagions made it spread at the same time worldwide and to many financial and economic areas, including financial markets (stock exchanges and derivative markets notably) where it resulted into a market crash, various equity funds and hedge funds that went short of cash and had to get rid of assets, insurance activities and pension funds, facing a receding asset portfolio value to cover their commitments, incidences on public finance due to the bailout actions, increased volatility for Forex (e.g., currencies of Iceland, various Eastern Europe and Latin American countries). The Economic crisis of 2008 ensued also in various countries and inflicted various industries, as the financial crisis was a factor for making borrowing and equity rising harder for them. By September 2008, the financial crisis entered into an acute phase marked by bankruptcy of Lehman Brothers and failures of prominent American banks and efforts by the American governments to rescue distressed financial institutions, by passing the Emergency Economic Stabilization Act of 2008. Iceland almost claimed to go bankrupt. Many financial institutions in Europe also faced the liquidity problem that they needed to raise their capital adequacy ratio. European government infused capital into major banks to keep them afloat. As the crisis deepened, stock markets fell worldwide, and global financial regulators attempted to coordinate efforts to contain the crisis. The US government composed a $700 billion plan to purchase nonperforming collaterals and assets. However, the plan was initially vetoed by the US congress because some members rejected the idea that the tax payer‟s money be used to bail out the Wall Street investment bankers. The stock market plunged as a result; the US Congress amended the $700 billion bail out plan and passed the legislation. The market sentiment continued to deteriorate and the global financial system almost collapsed. While the market turned extremely pessimistic, the British government launched a 500 billion pound bail out plan aimed at injecting capital into the financial system. The British government nationalized most of the financial institutions in trouble. Many European governments followed suit, as well as the US government. Stock markets appeared to have stabilized by the end of October 2008. The year 2008 was perhaps one of the worst years after the great depression of 1930s for a global equity investor. In the first part of the year, the global credit crisis took its toll and
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equity prices had started to fall. In the later months, when it was evident that the world was heading for a recession, stock prices started to plummet like a sack of potatoes. According to the Economist, the UK-based prestigious magazine, “American mutual-fund assets have declined by USD 2.4tn - a fifth of their value - since the start of 2008; in Britain, the drop is more than a quarter, or almost BP 130bn (USD 195bn). The value of global stock markets has shrunk by USD 30tn, or roughly half. These figures put the losses on credit-related securities, where the financial crisis began, into the shade”. Indeed, it was a bad year for equity investors.
3.11 Bangladesh Economy Bangladesh economy grew 6.2 per cent during the year 2007-08 as compared to 6.4 per cent in 2006-07. The economy performed well overcoming the damage and dislocation caused by the two floods and the cyclone SIDR. Nearly all sectors contributed to the GDP growth, particularly export-oriented sectors, remittance and also some service sectors like transport and communications. Inflation which rose to 9.8 per cent from 7.2 per cent in 2006-07, was caused mostly by the increase in international prices of energy, food grains and fertilizers. In FY2008, economic performance was better than expected considering the effects of natural disasters in the first half of the fiscal year and higher international commodity prices. The recovery in agriculture and services and the rebound in exports in the second half contributed to the reasonable 6.2% growth of GDP. Growth was supported by a steady flow of bank credit and a surge in workers‟ remittances. The economy during the year witnessed a rare achievement when the National Board of Revenue (NBR) for the first time achieved the target to earn Tk 374.79 billion as revenue. Agriculture grew at 3.6% in FY2008, after recovering from losses caused by the two floods and the cyclone in the first half of the fiscal year. The recovery was led by a bumper boro (harvested in Spring) crop helped by good weather conditions and timely Government support. Potato and wheat production also fared well. Industry sector growth in FY2008 declined to 6.9% from 8.4% in FY2007.
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3.12 The Global Stock Market MSCI International Equity Indices are the most widely used global benchmarks in the industry. They are used to benchmark more than an estimated USD 3tn in assets, by over 2,200 institutions globally and for over 90% of all international equity assets under management in the US. Calculated since 1969, the indices have become integral tools in the investment process of international investors and are used for research, in asset allocation models, to benchmark and conduct performance measurement analysis. Worldwide stock markets performed poorly. In many regions, the drop in some equity values were in excess of 50%, and all the indices lost more than one-third of their value. Notwithstanding intermittent volatility, decline was observed in almost all major stock markets during 2007-2008. The Dow Jones composite Index and the New York Stock Exchange (NYSE) composite index of USA witnessed decrease at the end of June 2008 as compared to those at the end of June 2007. Similar trends were observed with regard to Nikkei 225 (Tokyo, Japan) Composite Index (Kuala Lumpur) & Straits Times Index (Singapore). Only Hang Seng Index (Hong Kong) closed on high notes. South Asian stock markets also witnessed volatility, but closed on low notes. During the said period, however, general index of DSE in Bangladesh showed an increase by 39.60 percent. The following table shows the price trends in the major stock exchanges of the South Asian Region:
3.13 Bangladesh Stock Market 3.13 Bangladesh Stock Market In absolute terms, Dhaka Stock Exchange had a mixed year. In the first half of the year, the stock exchange went up significantly. This rise was due to a number of factors. The year end for banks and other financial institutions is December. They started to declare their results in the first few months of the year. As their results came in, and the results were very healthy,
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these stock prices started to go up, which was reflected in the rise of the index. The role of regulation cannot be ignored here. It was expected that reforms would take place in the nonbank financial institutions, and the insurance sector, which spurred the sharp rise in prices in these sectors. The banks were already expected to give heavy stock dividends as a requirement to be compliant with Basel II. All these factors meant that the index was on the up. The second half of the year was a time of decline. True that the stock and cash dividends were adjusted, however, the correction in the stock prices was much larger. There is little dispute that the market had been overheated in the first six months, and a correction was long overdue. At the same time, some other factors also started to concern the retail investors. Retail investors started to worry about the foreign portfolio investors pulling out their money as they did in Russia, India, China, and many other countries. The news coming from the developed and the developing world about the ramifications of the credit crunch and the overall downturn in the global economy exacerbated their fears. At the same time, the uncertainty about the political situation started to put off investors in investing money in the bourses. Also, the second half of the year celebrated two major religious festivals, which is generally a slag time for investors. All these factors culminated into the down turn in the second of the year. However, in the last month of the year, we find retail investors again finding interest to invest. A large part of this renewed interest can be attributed to the prudent actions of our regulators and the media. They rightly stressed that the current credit crunch in the global economy will not impact us greatly as we are not that leverage, and complex instruments do not exist here. They also rightly stressed that; the global recession will not affect us in a large way, as our economy is largely insulated from the negative aspects of the downturn. While the global stock markets have taken a beating, the Dhaka and Chittagong stock exchanges have performed reasonably well. According to Bloomberg, New York- based information Services Company; the DSE was the fourth best performing exchange in the world on a currency-adjusted basis in 2008. According to the 23 indices, the Dhaka Stock Exchange has performed the best in comparison with the other important stock exchanges.
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3.14 Market Capitalization The
country’s prime bourse DSE whopped to Tk 931.03 billion on June 30, 2008 as against Tk. 475.86 billion of 30th June 2007,showing a 95.66
Capitalisation/GDP ratio as on June 30, 2008, which determines the size of a securities market
domestic product in an economy in a given period of time, was still low when compared with the same with other countries. On June 30, 2008, the market capitalisation to GDP ratio rose to 19.92 ____________________________________
per cent against 10.18 per cent on June 2007. The Month-End movement of market capitalisation is shown in the above graph. The
capitalisation of listed securities of DSE increased significantly to Tk 931.03 billion till June 30, 2008 from Tk 475.86 billion of the corresponding period of the previous fiscal year showing a Tk 455.17 billion rise. The market capitalization continued to rise upto December, 2008 reflecting the investors’ growing enthusiasm on the securities
capitalization stood at Tk 1043.80 billion on December 30,2008.
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DSE Turnover marks 230% rise During 2007-2008, the total annual turnover of securities at DSE stood at Tk 543.29 billion against Tk. 164.67 billion
whopping 229.93 per cent rise. A total of 3,761.11
million shares were
transacted in the period of 2007-08 from a total volume of 1982.96 million shares in the year 2006-2007 recording a 89.68 per cent rise. In 2005-06, the volume was 592.76 million.
3.15 Instrument Available In The Capital Market Govt.Bonds-Govt.notes and bonds. Govt. Agency debts. Municipal bonds. Corporate bonds Asset backed securities. Preference shares/preferred stock. Ordinary shares /common stocks Unit trust /close end mutual fund. Derivatives, Loan etc.
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3.16 Share Categorization: A, B, G, Z & N The prime bourse of the country introduced “Group A” and “Group B” from July 2,2000 based on its financial strength and performance to give clear information to investors for taking informed decision. DSE has further categorized the securities by introducing “Group Z” which came into effect from September 26,2000. The Stock Exchange introduced another company category “Group G” on June 30, 2002. The categorization helps a lot the investors in choosing companies before making investment decision. N category the newest one was launched through an order of SEC on July 3,2006.
Criteria of the share category is as follows:
“A” Category Companies Companies which are regular in holding the Annual General Meetings and have declared dividend at the rate of 10 percent or more in a Calendar year. (Mutual Funds, Debentures & Bond are being traded in this Category) “B” Category Companies: Companies which are regular in holding the Annual General Meetings but have failed to declare dividend at least at the rate of 10 percent in a Calendar year. “Z” Category Companies: Companies which have failed to hold the Annual General Meetings or failed to declare any dividend or which are not in operation continuously for more than six months or whose accumulated loss after adjustment of revenue reserve, if any, is negative and exceeded its paid up capital. “G” Category Companies: Green field Companies: Newly listed green field companies shall be grouped under this category.
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“N” Category Companies: All newly listed companies except Greenfield Companies will be placed in this category and their settlement system would be like B-Category Companies.
3.17 Total Listed Company
BANK SL 1 ABBANK (AB BANK LIMITED) 2 ALARABANK (AL-ARAFAH ISLAMI BANK) 3 BANKASIA (BANK ASIA LTD. ) BAYLEASING( BAY LEASING & 4 INVESTMENT LIMITED ) BDFINANCE (BANGLADES FINANCE AND 5 INVESTMENT CO.LTD. ) BIFC( BANGLADESH INDUSTRIAL FIN. 6 CO. LTD. ) 7 BRACBANK( BRAC BANK LTD. ) 8 CITYBANK( CITY BANK ) 9 DHAKABANK( DHAKA BANK ) 10 DUTCHBANGL( DUTCH-BANGLA BANK ) 11 EBL( EASTERN BANK ) EXIMBANK( EXPORT IMPORT (EXIM) 12 BANK OF BANGLADESH ) FIDELASSET( FIDELITY ASSETS & 13 SECURITIES COMPANY LTD ) FIRSTSBANK( FIRST SECURITY ISLAMI 14 BANK LIMITED ) FLEASEINT( 1ST LEASE 15 INTERNATIONAL ) 16 ICBIBANK( ICB ISLAMIC BANK LIMITED ) 17 IDLC( IDLC FINANCE LTD. ) 18 IFIC( IFIC BANK ) ILFSL( INTERNATIONAL LEASING & 19 FINANCIAL SERV.L ) IPDC( INDUSTRIAL PROM. & DEV. CO. OF 20 BD LTD. ) 21 ISLAMIBANK( ISLAMI BANK ) ISLAMICFIN( ISLAMIC FINANCE & 22 INVESTMENT LTD. ) 23 JAMUNABANK( JAMUNA BANK LTD. ) LANKABAFIN( LANKABANGLA FINANCE 24 LTD. ) MERCANBANK( MERCANTILE BANK 25 LTD. )
SLS FOOD & ALLIED L 154 ALPHATOBA (ALPHA TOBACCO) 155 AMAMSEAFD( AMAM SEA FOOD ) 156 AMCL(PRAN)( AMCL (PRAN) ) 157 APEXFOODS( APEX FOODS ) 158 BANGAS( BANGAS ) 159 160 161 162 163 164
BATBC( BATBC ) BDPLANT( BANGLADESH PLANTATION ) BEACHHATCH( BEACH HATCHERY LTD. ) BENGALBISC( BENGAL BISCUITS ) BIONICFOOD( BIONIC SEA FOOD ) BLTC( BLTC )
165 CTGVEG( CHITTAGONG VEGETABLE ) 166 DHAKAFISH( DHAKA FISHERIES ) 167 FINEFOODS( FINE FOODS LIMITED ) 168 169 170 171
FUWANGFOOD( FU WANG FOOD ) GACHIHATA( GACHIHATA AQUACULTURE ) GBJVFOOD( GERMAN BANGLA FOODS ) GEMINISEA( GEMINI SEA FOOD )
172 GULFOODS( GULF FOODS ) 173 HILLPLANT( HILL PLANTATION ) 174 MEGCONMILK( MEGHNA CONDENSED MILK ) 175 MEGHNAPET( MEGHNA PET INDUSTRIES ) 176 MEGHNASHRM( MEGHNA SHRIMP ) 177 MODERNIND( MODERN INDUSTRIES ) 178 MONAFOOD( MONA FOOD )
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26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
MIDASFIN( MIDAS FINANCING LTD. ) MTBL( MUTUAL TRUST BANK LTD. ) NBL( NBL ) NCCBANK( NCCBL ) ONEBANKLTD( ONE BANK LIMITED ) PHOENIXFIN( PHOENIX FINANCE AND INVESTMENTS LTD. ) PLFSL( PEOPLES LEASING AND FIN. SERVICES LTD. ) PREMIERBAN( THE PREMIER BANK LTD. ) PREMIERLEA( PREMIER LEASING & FINANCE LIMITED ) PRIMEBANK( PRIME BANK ) PRIMEFIN( PRIME FINANCE & INVESTMENT LTD. ) PUBALIBANK( PUBALI BANK ) RUPALIBANK( RUPALI BANK ) SHAHJABANK( SHAHJALAL ISLAMI BANK LTD. ) SOCIALINV( SOCIAL INVESTMENT BANK ) SOUTHEASTB( SOUTHEAST BANK ) STANDBANKL( STANDARD BANK LIMITED ) TRUSTBANK( TRUST BANK LIMITED ) UCBL( UCBL ) ULC( UNITED LEASING ) UNIONCAP( UNION CAPITAL LIMITED ) UTTARABANK( UTTARA BANK ) UTTARAFIN( UTTARA FINANCE ) FINIX FINANCE
49 50 NATIONAL HOUSING FINANCE
CEMENT SL 51 ARAMITCEM( ARAMIT CEMENT ) 52 CONFIDCEM( CONFIDENCE CEMENT ) HEIDELBCEM( HEIDELBERG CEMENT 53 BD. ) LAFSURCEML( LAFARGE SURMA 54 CEMENT LTD. ) 55 MEGHNACEM( MEGHNA CEMENT ) 56 MODERNCEM( MODERN CEMENT ) 57 NILOYCEM( NILOY CEMENT ) 58 PADMACEM( PADMA CEMENT )
179 180 181 182 183
NTC( NATIONAL TEA ) RAHIMAFOOD( RAHIMA FOOD ) RANGAFOOD( RANGAMATI FOOD ) RASPIT( RASPIT INC.(BD.) ) SHYAMPSUG( SHAYMPUR SUGAR )
184 TULIPDAIRY( TULIP DAIRY & FOOD ) 185 YOUSUFLOUR( YOUSUF FLOUR ) 186 ZEALBANGLA( ZEAL BANGLA SUGAR )
TANNERY INDUSTRIES APEXADELFT( APEX ADELCHI FOOTWEAR 187 LTD. ) 188 APEXTANRY( APEX TANNERY ) 189 BATASHOE( BATA SHOE ) SL
190 EXCELSHOE( EXCELSIORSHOES ) 191 LEGACYFOOT( LEGACY FOOTWEAR ) 192 LEXCO( LEXCO ) 193 PHENIXLETH( PHOENIX LEATHER ) 194 SAMATALETH( SAMATA LEATHER ) PHARMACEUTICALS & CHEMICALS SL 195 ACI( ACI LIMITED. ) 196 ACIFORMULA( ACI FORMULATIONS LIMITED ) 197 ALAMINCHEM( AL-AMIN CHEMICALS ) 198 AMBEEPHA( AMBEE PHARMA ) 199 BANGLAPRO( BANGLA PROCESS ) 200 201 202 203
BCIL( BCIL ) BXPHARMA( BEXIMCO PHARMA ) BXSYNTH( BEXIMCO SYNTHETICS ) GLAXOSMITH( GLAXO SMITHKLINE )
204 IBNSINA( THE IBN SINA ) 205 206 207 208
IMAMBUTTON( IMAM BUTTON ) KEYACOSMET( KEYA COSMETICS ) KEYADETERG( KEYA DETERGENT ) KOHINOOR( KOHINOOR CHEMICALS )
209 LIBRAINFU( LIBRA INFUSIONS LIMITED ) 210 ORIONINFU( ORION INFUSION )
211 PERFUMCHM( PERFUME CHEMICALS )
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59 60 61 62 63 64
AFTABAUTO( AFTAB AUTOMOBILES ) ANWARGALV( ANWAR GALVANIZING ) ATLASBANG( ATLAS BANGLADESH ) AZIZPIPES( AZIZ PIPES ) BDAUTOCA( BD.AUTOCARS ) BDLAMPS( BANGLADESH LAMPS )
212 213 214 215 216 217
65 66 67 68 69
BDTHAI( BD.THAI ALUMINIUM ) BEMCO( BEMCO ) BSRMSTEEL( BSRM STEELS LIMITED ) ECABLES( EASTERN CABLES ) GOLDENSON( GOLDEN SON LTD. )
70 71 72 73 74 75 76 77 78 79 80 81
PETROSYNTH( PETRO SYNTHETIC ) PHARMACO( PHARMACO INTERNATIONAL ) PHARMAID( PHARMA AIDS ) RAHMANCHEM( RAHMAN CHEMICALS ) RECKITTBEN( RECKITT BENCKISER(BD.)LTD. ) RENATA( RENATA LTD. ) SQURPHARMA( SQUARE PHARMACEUTICALS 218 LTD. ) 219 TBL( THERAPEUTICS ) 220 WATACHEM( WATA CHEMICALS )
INVESTMENT 1STBSRS( 1ST BANGLADESH SHILPA RIN KAY&QUE( KAY AND QUE ) 221 SANGSTHA M.F. ) METALEXCR( METALEX CORPORATION ) 222 1STICB( 1ST ICB M.F. ) 1STPRIMFMF( PRIME FINANCE FIRST MUTUAL MONNOJTX( MONNO JUTEX ) 223 FUND ) MONNOSTAF( MONNO JUTE STAFFLERS ) 224 2NDICB( 2ND ICB M.F. ) NPOLYMAR( NATIONAL POLYMER ) 225 3RDICB( 3RD ICB M.F. ) NTLTUBES( NATIONAL TUBES ) 226 4THICB( 4TH ICB M.F. ) OLYMPIC( OLYMPIC INDUSTRIES ) 227 5THICB( 5TH ICB M.F. ) QSMDRYCELL( QUASEM DRYCELLS ) 228 6THICB( 6TH ICB M.F. ) RANFOUNDRY( RANGPUR FOUNDRY ) 229 7THICB( 7TH ICB M.F. ) RENWICKJA( RENWICK JAJNESWAR ) 230 8THICB( 8TH ICB M.F. ) SALAMCRST( S. ALAM COLD ROLLED STEELS LTD. ) 231 AIMS1STMF( AIMS 1ST M.F. ) SINGERBD( SINGER BANGLADESH ) 232 GRAMEEN1( GRAMEEN MUTUAL FUND ONE )
82 WONDERTOYS( WONDERLAND TOYS )
FUEL & POWER
BDWELDING( BD. WELDING 83 ELECTRODES ) 84 BOC( BOC BANGLADESH ) DESCO( DHAKA ELECTRIC SUPPLY 85 COMPANY LTD. ) 86 EASTRNLUB( EASTERN LUBRICANTS ) JAMUNAOIL( JAMUNA OIL COMPANY 87 LIMITED ) MPETROLEUM( MEGHNA PETROLEUM 88 LIMITED ) 89 PADMAOIL( PADMA OIL CO. ) POWERGRID( POWER GRID COMPANY 90 OF BANGLADESH LTD. ) SUMITPOWER( SUMMIT POWER 91 LIMITED )
233 GRAMEENS2( GRAMEEN ONE : SCHEME TWO ) 234 ICB( ICB ) ICB1STNRB( ICB AMCL 1ST NRB MUTUAL 235 FUND ) ICB2NDNRB( ICB AMCL 2ND NRB MUTUAL 236 FUND ) 237 ICBAMCL1ST( ICB AMCL 1ST M.F. ) ICBISLAMIC( ICB AMCL ISLAMIC MUTUAL 238 FUND )
239 JUTESPINN( JUTE SPINNERS ) 240 NORTHERN( NORTHERN JUTE ) 241 SALEHCARPT( SALEH CARPET ) 242 SONALIANSH( SONALI AANSH )
92 TITASGAS( TITAS GAS TRANSMISSION &
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DIST. CO. LTD. ) SL 93 94 95 96 97 98 99 100 SL
SL 243 PAPER & PRINTING AZADIPRIN( AZADI PRINTERS ) 244 HAKKANIPUL( HAKKANI PULP & PAPER ) 245 MAQENTER( MAQ ENTERPRISES ) 246 MAQPAPER( MAQ PAPER ) 247 MONOSPOOL( B.MONOSPOOL PAPER ) 248 PADMAPRINT( PADMA PRINTERS ) 249 PAPERPROC( PAPER PROCESSING ) SL SONALIPAPR( SONALI PAPER ) 250 251 TEXTILE
101 AL-HAJTEX( AL-HAJ TEXTILE ) 102 ALLTEX( ALLTEX IND. LTD. )
103 104 105 106 107 108 109 110
ANLIMAYARN( ANLIMA YARN ) APEXSPINN( APEX SPINNING. ) APEXWEAV( APEX WEAVING ) ARBEETEX( ARBEE TEXTILE ) ASHRAFTEX( ASHRAF TEXTILE ) BDDYE( BD.DYEING ) BDZIPPER( BD. ZIPPER IND. ) BEXTEX( BEXTEX LTD. )
254 255 256
111 112 113 114 115 116
CHICTEX( CHIC TEX LTD. ) CMCKAMAL( CMC KAMAL ) DANDYDYE( DANDY DYEING ) DELTASPINN( DELTA SPINNERS LTD. ) DSHGARME( DESH GARMANTS ) DULAMIACOT( DULAMIA COTTON )
117 DYNAMICTEX( DYNAMIC TEXTILE ) 118 EAGLESTAR( EAGLE STAR TEXTILE ) 119 GMGIND( GMG IND. CORP. ) 120 HRTEX( H.R.TEXTILE ) MAKSONSPIN( MAKSONS SPINNING 121 MILLS LIMITED ) 122 METROSPIN( METRO SPINNING ) 123 MHOSSAIN( M. HOSSAIN GARMENTS ) 124 MITATEX( MITA TEXTILE ) 125 MITHUNKNIT( MITHUN KNITTING ) 126 MODERNDYE( MODERN DYEING ) 127 MONNOFABR( MONNO FABRICS )
IT SECTOR AGNISYSL( AGNI SYSTEMS LTD. ) BDCOM( BDCOM ONLINE LTD. ) BDONLINE( BANGLADESH ONLINE ) DAFODILCOM( DAFFODIL COMPUTERS LTD. ) INTECH( IN TECH ONLINE LTD. ) ISNLTD( INFORMATION SERVICES NETWORK ) RASPITDATA( RASPIT DATA MANAGEMENT ) SERVICES & REAL ESTATE BDHOTELS( BANGLADESH HOTELS ) BDSERVICE( BANGLADESH SERVICES ) DBH( DELTA BRAC HOUSING FINANCE CORP. LTD. ) EHL( EASTERN HOUSING ) NHFIL( NATIONAL HOUSING FIN. AND INV. LTD. ) SAMORITA( SAMORITA HOSPITAL ) SAPORTL( SUMMIT ALLIANCE PORT LIMITED )
CERAMICS SECTOR SL 257 BENGALFINE( BENGAL FINE CERAMIC ) 258 FUWANGCER( FU-WANG CERAMIC ) 259 MONNOCERA( MONNO CERAMIC ) SPCERAMICS( SHINEPUKUR CERAMICS 260 LIMITED ) 261 STANCERAM( STANDARD CERAMIC ) INSURANCE SL 262 AGRANINS( AGRANI INSURANCE CO. LTD. ) 263 ASIAINS( ASIA INSURANCE LIMITED ) ASIAPACINS( ASIA PACIFIC GENERAL 264 INSURANCE CO. LTD. ) 265 BGIC( BGIC ) 266 CENTRALINS( CENTRAL INSURANCE ) CITYGENINS( CITY GENERAL INSURANCE CO. 267 LTD. ) 268 269 270 271
CONTININS( CONTINENTAL INSURANCE LTD. ) DELTALIFE( DELTA LIFE INSURANCE ) EASTERNINS( EASTERN INSURANCE ) EASTLAND( EASTLAND INSURANCE ) FAREASTLIF( FAREAST ISLAMI LIFE 272 INSURANCE CO. LTD. ) 273 FEDERALINS( FEDERAL INSURANCE ) 274 GLOBALINS( GLOBAL INSURANCE LTD. )
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128 PRIMETEX( PRIME TEXTILE ) 129 QSMSILK( QUASEM SILK ) 130 QSMTEX( QUASEM TEXTILE ) 131 132 133 134 135 136 137 138 139 140 SL 141 142 143 144 145 146 147 148 149 150 151 152 153
275 GREENDELT( GREEN DELTA INSURANCE ) 276 JANATAINS( JANATA INSURANCE ) 277 KARNAPHULI( KARNAPHULI INSURANCE ) MEGHNALIFE( MEGHNA LIFE INSURANCE CO. RAHIMTEXT( RAHIM TEXTILE ) 278 LTD. ) MERCINS( MERCANTILE INSURANCE CO. SAFKOSPINN( SAFKO SPINNINGS ) 279 LTD. ) SAIHAMTEX( SAIHAM TEXTILE ) 280 NATLIFEINS( NATIONAL LIFE INSURANCE ) SAJIBKNIT( SAJIB KNITWEAR ) 281 NITOLINS( NITOL INSURANCE CO. LTD. ) NORTHRNINS( NORTHERN GENERAL SONARGAON( SONARGAON TEXTILES ) 282 INSURANCE COMPANY LTD. ) PARAMOUNT( PARAMOUNT INSURANCE SQUARETEXT( SQUARE TEXTILE ) 283 COMPANY LTD. ) SREEPURTEX( SREEPUR TEXTILE ) 284 PEOPLESINS( PEOPLES INSURANCE ) STYLECRAFT( STYLECRAFT LIMITED ) 285 PHENIXINS( PHOENIX INSURANCE ) TALLUSPIN( TALLU SPINNING ) 286 PIONEERINS( PIONEER INSURANCE ) POPULARLIF( POPULAR LIFE INSURANCE CO. TAMIJTEX( TAMIJUDDIN TEXTILE ) 287 LTD. ) 288 PRAGATIINS( PRAGATI INSURANCE ) MISCELLANEOUS ARAMIT( ARAMIT ) 289 PRAGATILIF( PRAGATI LIFE INSURANCE LTD. ) BDLUGGAGE( BANGLADESH LUGGAGE ) 290 PRIMEINSUR( PRIME INSURANCE ) BERGERPBL( BERGER PAINTS PRIMELIFE( PRIME ISLAMI LIFE INSURANCE BANGLADESH LTD. ) 291 LTD. ) PROGRESLIF( PROGRESSIVE LIFE BEXIMCO( BEXIMCO ) 292 INSURANCE CO. LTD. ) BSC( BSC ) 293 PURABIGEN( PURABI GEN. INSURANCE ) ENGINEER( THE ENGINEERS ) 294 RELIANCINS( RELIANCE INSURANCE ) REPUBLIC( REPUBLIC INSURANCE COMPANY GQBALLPEN( GQ BALL PEN ) 295 LIMITED ) HIMADRI( HIMADRI ) 296 RUPALIINS( RUPALI INSURANCE ) MIRACLEIND( MIRACLE IND. ) 297 SANDHANINS( SANDHANI LIFE INSURANCE ) SONARBAINS( SONAR BANGLA INSURANCE ROSEHEAVEN( ROSE HEAVEN BALL ) 298 LTD. ) STANDARINS( STANDARD INSURANCE SAVAREFR( SAVAR REFRACTORIES ) 299 LIMITED ) SINOBANGLA( SINOBANGLA TAKAFULINS( TAKAFUL ISLAMI INSURANCE INDUSTRIES ) 300 LIMITED ) USMANIAGL( USMANIA GLASS ) 301 UNITEDINS( UNITED INSURANCE )
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3.17.1 Listed Sector Of DSE Sector
Number of Companies
Food & Allied Products
Fuel & Power
Pharmaceutical & Chem.
Paper & Printing
Service & Real Estate
3.18 Central Depository Bangladesh Limited Central Depository Bangladesh Limited (CDBL) was incorporated as a limited company on 20th August 2000 to operate and maintain the central depository system (CDS) of electronic book entry, recording and maintaining securities accounts and registering transfer of securities, changing the ownership without an physical movement or endorsement of certificates and execution of transfer instruments, as well as various other investor services including facilitation of the secondary market trading of treasury bills and Government bonds issued by the Bangladesh Bank.
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3.18.1 What Is A Depository? A depository is like a bank for shares instead of money. Instead of holding shares in the form of certificates, investors have accounts in the depository and are able to move securities and settle stock exchange transactions by an electronic update of their accounts. Virtually all established markets have depositories including India, Japan, Malaysia, Pakistan, Srilanka and Thailand, UK and USA. The core service of a depository is the efficient delivery, Settlement and transfer of securities through a computerized.
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CHAPTER- 4 to 5
Human Resources Process Of Dhaka Stock Exchange Ltd.
Human Resources Department of Dhaka Stock Exchange Ltd.
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4.1 Present Organogram Of Human Resources Department
AGM (1) Head of HR
Senior Executive (1) Compensation & Benefits
Jr. Executive (1)
Senior Executive (1) Compliance & Daily affairs
Sr. Office Asstt. Record Mgmt.
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4.2 Responsibilities Of HRM, Admin & Training Affairs Department The Human Resources Department was started their activities in early 2006 and there was only two employees in this Department. At this moment there are eleven employees working in this department. Day bay day these department activities are enhancing rapidly. The Human Resources Department is concerned with the selection, recruitment, training of employees, maintenance of employee database, employee leave maintenance, etc. Job Responsibilities of HRD is directly guided by the AGM.
Assist to the administrative activities to GM to smooth operates for Dhaka Stock Exchange.
To take necessary actions to make it possible for employees to contribute to his best to the performance of the group or department
To plans, organizes, coordinates, and supervises the activities of one or more functional areas within the Human Resource Department,
Provides consultation and technical direction within the assigned functional areas of Human Resources including: recruitment/selection, classification /compensation, employee relations, training and organizational development, benefits, equal employment opportunity & refreshment.
Monitoring attendance and tardiness policies, Leave record
Notice of Absence or Late ness,
Contact with the CEO and arrange to set up the schedule of committees meeting like as Selection & Disciplinary Committee, Organogram Implementation Committee, and HR Committee.
Performs other related duties as required.
Maintain Supporting Papers of the following committee. A. Selection & Disciplinary Committee for Officers. B. Selection Committee for Staff of the Exchange. C. HR Management Committee. D. Organogram Committee.
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4.3 Key Functions of HRD Key functions involve following phases:
4.3.1 Recruitment Being the first integrated Capital Market plant in the country DSE faced a great challenge in recruiting experienced and qualified people for the project, Based on the skill requirement, the senior care technical staffs are being recruited from abroad. They are having on overage 15 years experience of this operation and some of them having experience in commissioning green field project. Keeping in mind the commitment on the local employment and future stuff costs the company management is recruiting potential Bangladeshi people.
4.3.2 Selection After successful recruitment an employee goes for medical test and salary negotiation. After that he/she is finally selected for DSE having completed necessary formalities.
4.3.3 Induction and Orientation Induction and orientation is concerned with new employee who is being made aware of the company‟s philosophy, policies, objectives as related to him, company‟s place in the industry or economy, The product, service performed, his/her job and per development etc. This is also involved with introducing him to the people with whom he is to come in contact in his/her job performance, rear, subordinates and supervisor. Also familiarizing him/her with social and community studies. DSE follows a high degree of cultural value and philosophy. Also conduct a thorough induction program/orientation to a newly selected employee.
4.3.4 Training “Dhaka Stock Exchange Ltd” conducts a rigorous training to its employees. It includes basic trade trainings, advance training etc. Training is conducted both home and abroad. As the training is conducted both home and abroad it helps both the employee and organization. A
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well-trained employee is an asset to the organization and also employee can develop him/herself. DSE has taken a good number of steps to develop its employees.
Local training can be both-Inside DSE and Outside DSE Induction/Orientation training Program falls under inside DSE training category. After joining, it is the responsibility of the HR to conduct induction /orientation training to the newly recruited personnel to provide a general introduction of the company. To prepare training plan, participant's list, and training schedule for induction training - HR department does all. Inside DSE training will cover Management training. Out side DSE training means to take part in training programs offered by different training institutions/universities on different subjects. DSE follow this type of training such are;
Authorized Representative Training
Training as per requirements of department
Company Secretary Training
Investors Awareness Training
DSE Employee Training.
22.214.171.124 Overseas Training After need assessment employees who need overseas training are sent abroad. For overseas training. Expenses of overseas training are generally borne by DSE. The particular employee who has been selected for training has to sign a surety bond for specific period of time for overseas training. In the process more than 43 local employees, have been sent overseas, in China, Singapore, and Malaysia on India or training assignments. Apart from the senior staffs on training assignments, training of the other staffs has been planned and under implantations at DSE guidelines.
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4.3.5 Placement Once candidate is finally selected he/she is placed to the concerned department for his/her actual job. It is normally decided earlier, for which post or vacancy the candidate is selected. Employee transfer is one of the important activities of Human Resources Division.
4.3.6 Performance Appraisal It is furnished annually. The concerned department and HR department are responsible for necessary performance appraisal .f the performance of any employee is not up to the standard than necessary corrective/disciplinary procedure is followed against that employee. 126.96.36.199 Rewarding the Good Employees Having rewards leads to increased job satisfaction. People do what they do to satisfy some need. Before they do anything they look for a payoff or rewards. The obvious reward employees' get from work is in the form of salary. They expect good job performance to lead to organizational rewards, and they further seek rewards that will satisfy their individual goals or needs. Organization use rewards to motivate their employees. They rely on rewards to motivate job candidate s to join the organization. They certainly rely on rewards to get employees to come to work and perform effectively once they arc hired. Popular criteria that influence the distribution of rewards arc: •
The employees of DSE ate even rewarded at the end of the year, cither increased, or appreciation
for any outstanding performance.
Effort and various facilities ate given to high post officials.
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4.3.7 Promotion: An employee may be eligible for consideration of promotion to next higher grade when he completes a minimum 3 years service in his existing post and if he is found suitable for promotion subject to the availability of the post. Promotion from a lower post to higher post shall be based on seniority, fitness and performance subject to fulfillment of the specified qualification for the “post”. No employee shall have a claim to be promotes as a right by virtue of seniority only.
4.3.8 Personnel Development Personnel development is mainly concerned with the enlarging on improving the employees‟ capacity. This will enable him/her to successfully and more effectively handling greater responsibilities DSE looks ahead for all possible steps to develop its personnel by.
Looking ahead for the growth and expansion of the individual employee.
Provide training to upgrade skills and knowledge to make him/herself fit occupy higher position.
Pursuance of the project Leader for Tomorrow (LFT) and motivate each employee to follow the “DSE way”.
4.3.9 Recruitment of Intern Intern is also another important part of their recruiting process. A learner who is paid an allowance or stipend during the period of work experience. All intern contracts will be prepared by HRD. The contract will specify all terms and conditions including period of internship, including remuneration, working hours, duration, supervision etc. Working hours, leave and holidays for the intern shall be the same as it applies in case of other employees.
4.3.10 Human Rights at Work Place DSE is very much conscious about human rights of its employees.
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Policies. DSE is very much committed to respecting and promoting human rights in its sphere of influence. This commitment has been included in our code of business conduct, which applies to the entire workforce. The group human resource policy states that the group excludes forced labor. There is no provision of child labor also.
Policies and program at local level. At the local level almost all the units have developed their own policy on human rights.
Relationship with Union. All business units have a specific policy or procedure on freedom of association and negotiation for DSE employees. Unions or some kind of collective agreement represents the majority of DSE work forces.
Use of Security Agents. To ensure security of employees the organization-employed security guards wherever is necessary. 21% of business units‟ use armed security forces also.
4.3.11 Attendance Employers need their employees to report to work regularly and on time. An employee who is constantly tardy or absent disrupts the workflow, burdens co-worker with extra tasks, lowers morale, and may affect the quality of products and services. One of the HR executive is maintain the attendance either employees are come timely or not. If not then he put on “L” for Late; if someone is absent then “A” for absent; if someone have leave then “CL” for casual leave. If someone has late regularly then the executive is issue a letter or note for much late by the sign of AGM of HR, which may causes employee evaluation.
4.3.12 Leave Leave is earned by duty only and cannot be claimed as a matter of right. All applications of leave shall be addressed to the competent authority and shall be submitted through proper channel in a specified form. Competent authority may refuse or grant a leave for a stated period when applied for, revoke leave of any description and recall an employee before the expiry of his leave. An employee shall not proceed on leave on the basis of submission of
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application until it is sanctioned. Overstay of leave may attract punishment including dismissal from service. Various types of leave shall be admissible for an employee: a) Ordinary Leave – Casual Leave, Medical leave, Earned Leave b) Extra-ordinary Leave- Maternity Leave, Study Leave, Transit Leave 188.8.131.52 Ordinary Leave: 1. Casual leave: - means period of absence for a short period granted to an employee who is unable to attend duty due to urgent private affairs, Casual leave may be granted to an employee up to a maximum of 15 days during a calendar year but not for a period exceeding 5 days at any one time. Casual leave shall not be accumulative and the unspent balance shall be lapsed on 31st December each year. Casual leave cannot be combined with other leave and cannot be taken in combination of joining time. 2. Earned Leave: - All regular and permanent employees are entitled to enjoy full pay at the rate of 1 day for every 12 days of the period spent on duty and the leave so earned shall be credited to his leave account and the maximum accumulation shall be 120 days. The period earned in excess of 120 days shall stand lapsed. The amount of earned leave at full pay that may be taken in one spell shall not exceed 30 days normally. The competent authority may, however, under special circumstances rise to any period subject to maximum of 120 days. The calendar year shall be the basis of earned leave. Normally earned leave is credited to an employee on completion of 1 (one) year service. However, leave may be granted to an employee after confirmation if he has not completed 1 (one) year service at the following rate.
Employee with service leaves
Percentage of total sanction
3 to 6 months
6 to 9 months
9 to 12 months
2.1 Earns leave at the end of the calendar year shall be credited over the next year in the event the incumbent is refused to enjoy leave. The Head of Department shall submit earned
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leave plan at the beginning of each year. No leave shall be carried over to the next year if the incumbent fails to produce leave application refused by competent authority during the subject year. 2.2 The employee is entitled to en-cash 50% out of the accumulated earned leave by Surrendering 50% to the credit of the employer subject to: 1. He has been consecutively refused 3 times due to exigency of works. 2. He applies for encashment of 50% closing such refusal on prescribed leave application forms only. 3. Successive refusal should not be within the period of leave applied for and refused earlier. 3. Medical/Sick Leave a)
Every employees shall be entitled to medical/sick leave with full wages for a total period of fourteen days in a year; such leave not availed of by any employee during a calendar year may be carried forward, but the total accumulation of such leave shall not exceed 28 (twenty-eight) days at any one time.
Sick leave may be granted on medical grounds on the recommendation of register medical practitioner approved by the company.
184.108.40.206 Extra-ordinary leave: Leave without pay may be granted to an employee in special circumstances when no other leave is admissible. The duration of leave without pay shall be so regulated that the amount of total leave including other leave taken in consideration does not exceed maximum of 1 (one) year at one time. 1. Study leave- when the competent authority selects an employee for training in the country or abroad the entire period including travel time shall be treated on duly for all-purpose. 2. Maternity Leave- A female employee may be granted maternity leave (which is not debited against leave account) with basic pay only for a period of 12 (twelve) weeks before
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and 4 (four) weeks after date of confinement subject to the incumbent has at least 9 (nine) months continuous service immediately preceding the date of delivery. An employee is, however, entitled to enjoy maternity leave for a maximum of 4 (four) months during the whole service life. Leave on medical ground irrespective of the nature ordinary or extra-ordinary shall be granted only at the advice of designated medical officer of the Dhaka Stock Exchange. 3.Transit Leave- If an employee is transferred from one office to another (not within same city) he/she shall be allowed 2 days leave with full pay to cover journey with his household effects.
4.3.13 Submission of Annual Confidential Report (ACR) The management has a policy to promote any employee on the basis of good performance recorded in Annual Confidential Report (ACR). ACR will prepare by the management depending on performance report given by his/ her departmental in charge. CEO will act on the report submitted by Committee. As regard Divisional/ Departmental Head will prepare reports of performance and place before the committee for increments or promotion. Overall Evaluation of ACR
Average Score of ACR
: 9.0 and above
: 7.5 and above
: 6.0 and above
: 5.0 and below 6.0
: Less than 5.0
An employee obtaining overall ACR grade of „Excellent‟ may be allowed one special increments. An employee obtaining overall ACR grade of „Very Good‟ for consecutive two years may be allowed one special increment.
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An employee obtaining overall ACR grade of „Average‟ or below for consecutive two years shall be subject to withholding increment. If some one obtains below average grade for consecutive two years, warning will be issued and similar performance may cause termination from the job.
4.3.14 Preserve All Employees Personal File One of the major activities of HR is to maintain or preserve all employees personal file. This is really important for every employee because of this file contains his or her all original academic certificates, experience certificates, monthly evaluation report, performance appraisal and annual confidence report. Some times this files are need to update for their promotion. In addition, documentation about an employee‟s job performance can help support personnel decisions, such as promotion, transfer, discipline, or discharge. Therefore, every employer should establish a formal system for gathering and maintaining required information on applicants, employees, and former employees.
4.3.15 Proper Implementation of DSE Service Rules This regulation shall be called “Service Regulations for Employees of Dhaka Stock Exchange Ltd. These Regulation shall apply to the whole time employees appointed in the Service of the Dhaka Stock Exchange permanent, Temporary or on contract basis and shall come into force with immediate effect. Acts done before these Regulations come into being, any order passed, appointment made, action taken, proceeding commenced under the provisions of regulations or orders in force on the date of issue of these regulations shall continue in effect and deemed to have been passed, made, taken or commenced as the case may be under the corresponding provisions of these regulations as if these Service Regulations had been in force when such order was passed or such appointment made of such actions taken or such proceedings commenced. Relaxation- The HRD of Dhaka Stock Exchange Ltd. may modify, amend, replace, relax and/or add to any of the provision of these rules in such manner and such extent as it may deem necessary from time to time.
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The power of interpreting these Regulations, lies with the Council to the extent it does not violate the relevant laws of the land.
4.3.16 Disciplinary Procedure Misconduct The following acts and omissions shall be treated as misconduct: Willful in subordination or disobedience, whether alone or in combination with other to any law full order of a superior; theft, fraud or dishonesty in connection with the employer‟s business or property; taking or giving bribes or any illegal gratification in connection with his or any other Officer/Employee‟s employment under the Dhaka Stock Exchange. Habitual absence without leave or unauthorized extension of sanctioned leave; habitual late attendance; breaks of any law or rule or regulation of the Dhaka Stock Exchange. Riotous or disorderly behavior in the office of the Dhaka Stock Exchange or any act subversive of discipline; habitual negligence or neglect of work; frequent repetition of any act or omission; resorting to illegal strike or „go slow‟ or inciting others to resort to illegal strike or “go slow” falsifying, tampering with damaging or causing loss of Dhaka Stock Exchange official records.
Penalties, Punishment, Disciplinary Actions etc: The following shall be the penalties, punishment and disciplinary actions, which may be imposed/taken under these rules: a) Censure/warning; b) Withholding promotion or increment for a specified period; c) Reduction to a lower post or time-scale or to a lower stage in a time-scale of pay; d) Suspension without pay for not more than 7 days; e) Dismissal from service; f) Discharge from service;
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Suspension as a Measure of Punishment An employee found guilty of misconduct but not dismissed or discharge in consideration of extenuating circumstance may be, as an alternative punishment, suspended for a period not exceeding seven days without pay as well as subsistence allowance. Procedure for Punishment: An Employee shall not be dismissed or discharged or otherwise punished unless: a) The allegations against him are recorded in writing (framing of charges); b) He is given a copy of the Charge Sheet and given at least 4 day‟s time to explain in writing the charges; c) He is given a personal hearing by way of domestic enquiry, either at his request or at the instance of the management; d) The Chairman of the DSE or Vice-Chairman in his absence concurs with the decision for punishment by the Secretary in respect of all officials of the Dhaka Stock Exchange below him and in respect of disciplinary action against the Secretary, Chairman and the board of Directors shall take the final decision. In case of punishment a copy of the order inflicting such punishment shall be supplied to the punished official. An employee refused to accept any notice, letter charge sheet, order or any or any other document addressed to him by the management it shall be deemed that the same had been delivered to him if a copy of the same has been exhibited on the notice Board and another copy has been sent to the address of official as available from the records of the office, by registered post. In awarding the punishment the management will take in to account the gravity of the misconduct, the previous record, if any of the person concerned and any other extenuating or aggravating circumstances that may exist.
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4.3.17 Employee Benefits 220.127.116.11 Overtime:
All employees up to the rank of Senior Assistant are entitled to
overtime allowance for working beyond office hours. Members of the staff entitled to overtime allowance shall get it at thereat of double of their basic pay. But if they are supplied with refreshment by the office, they will get the same at single rate. Overtime allowance for working on a holiday may also be given in the same manner as in a serial (i) above. But the incumbent working on a holiday is also entitled to get traveling allowance for journey to end from his residence at the rate decided by the management. No one will be entitled to overtime for working less than an hour beyond office hours. Over time allowance will only be given to an incumbent who will be detained for a specific assignment with prior approval of the competent authority. 18.104.22.168 Festival Bonus: National Employees are entitled to a single festival bonus paid annually equivalent to one moth‟s basic salary during their main festival period. Festival bonuses will be received at least ten days before the following festivals: Muslim
If an employee‟s main festival is not mentioned here the AGM, HRD should be informed in writing about his/her main festival, and accordingly his/her festival bonus will be paid. Employees who have completed less than on e year of continuous service on the first day of the festival month will receive pro-data festival bonus, calculated according to staff‟s monthly basic salary as of the festival month divided by 12 multiplied by working length. If an employee has worked less than one month, a minimum of one month‟s period will be the calculation basis.
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If an employee is separated before the festival month, s/he will be paid the accrued amount with the final payment. The accrued value will be considered from one festival month to the next. HRD will inform the payroll unit of accounts section to pay festival bonus to each regular and contract employees at least two weeks ahead of the festival date based on the religious affiliation indicated on the employee‟s preliminary job application form. 22.214.171.124 Employee Remuneration: When people work for a company, they expect to receive from the company something in return for their efforts. Employee remuneration refers the Compensation and reward given by companies to their employees. The remuneration to employees can be broadly divided in two types. The first is the pay, which they can spend as they please. The second is the job facilities provided to them to improve their effectiveness and comfort on the job. These can be provides in physical form such as company car, or as payment of expenses like travel, lodging, dining and entertaining incurred while performing company work. The amount of the remuneration as well as the form and way in which it is paid has major implication on employee performance and cost. The pay can have two components. A fixed pay independent of the performance levels of individual or groups of employee, and a variable pay linked to the performance levels. Fixed amount is to satisfy need for income stability, and the variable component is to stimulate and reward greater effort. The fixed pay may be paid in several different forms and under different names – like basic salary, dearness allowance, city compensatory allowance, and house rent allowance. Here it will be useful to clarify that although dearness allowance varies with the price index, it forms part of fixed component of employees earning as it is not linked to on the job performance. Companies under different names like incentive, commission and bonus also pay the variable pay. To simplify our discussion here we will use the term incentive to include all types of
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variable components monetary compensation. The incentives can be of different types, and can be linked to the performance in different ways. 126.96.36.199 Food Allowance: This solution is designed to be used by organizations offering food or beverages allowance for their staff using reassurances, coffee shops, or any other shops. The aim of this solution is to organize and control the three parties of the allowance triangle, which are the employee, the organization, and the restaurant. The software manages billing for allowance between the service providers and the organization and provides the organization with allowance usage trends and statistical reports that helps to re-shape company policies. This allowance is made for below executive level in DSE. 188.8.131.52 Special Bonus/Allowance: According to the rules of special bonus, obtaining 60% marks in annual confidential report is one of criteria. The calculation of ACRs for the calendar year 2007 reveals that all our valued employees (who have successfully completed one year) earned 60% marks in their ACRs. According to the tenure of service in DSE, the total employees of DSE are categorized in the following ways: 1) Members in the top-level management on contract service. 2) Employees served DSE for a period of one year and above. 3) Employees completed six months but not one year. Special allowance for working on a holiday may also be given for executive level and above to get entertainment and travel allowance at the rate decided by the management. 184.108.40.206 Increment: Employee in all grades as specified will ordinarily-receive annual increment subject to the performance, attendance record and conduct during the preceding year which shall be the basis of the annual increment. Increment may be withheld as a measure of punishment. The competent authority ordering such withholding of increment shall state the period for which such increment is withheld. In case of promotion from lower
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to the higher post/grade, the incumbent who was already drawing more than the minimum basic of the higher scale shall have the pay fixed after adjustment to fit into the new scale.
4.3.18 Payment of Compensation (Group Insurance) The employees of the Dhaka Stock Exchange From the date of his confirmation shall be covered by the Group Insurance under noted schemes at cost of the Dhaka Stock Exchange. The Principal sum will be up to a maximum limit of fifteen limit of fifteen month‟s basic salary. The compensation program follows the recent market rate of the costly to have a competitive position in the other a like industry and community studies. DSE follows a high degree of cultural value and philosophy. a)
Loss of Life
: The Principal sum.
Permanent Physical disabilities
: The Principal sum.
making the person permanently bed-ridden c)
Permanent mental disorder
: The Principal sum.
Disability by paralysis
: The Principal sum.
or loss of two or more limbs by amputation at of above wrist or ankle a)
Total irrecoverable loss all sight in
: The Principal sum.
both eyes 220.127.116.11 Health Insurance: The employees of the Dhaka Stock Exchange From the date of his confirmation shall be covered by the Health Insurance under noted schemes at cost of the Dhaka Stock Exchange.
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18.104.22.168 Provident Fund: The Officers and Employees on regular employment of the DSE shall be required to subscribe to the contributory provident fund of the Exchange at the rate of 10% of their basic pay. The Exchange will contribute an equal amount to the said fund. Procedure of withdrawal from and final payment of the fund will be governed by the Rules framed specifically for the purpose with the approval of the Government. 22.214.171.124 Gratuity: Every employee of the Exchange who has completed at least five years of his/her continued service shall be entitled to enjoy the benefit. Gratuity shall not be paid to an employee whose service is terminated by the DSE on disciplinary measure. In case of death of an employee, gratuity shall be paid to the nominee(s) and/or legal heir(s) of the deceased employee at the usual rate for the period of service rendered to the Dhaka Stock Exchange. In case of consolidated pay for the purpose of this clause, basic pay‟ shall mean an amount so apportioned by the authority. Computation of annual gratuity shall be made on the basis of 1 (one) month‟s basis pay (last pay drawn) of the employee concerned for each completed year of service from the date of his appointment/confirmation. For the purpose of payment of Gratuity, basic salary is defined as basic pay as per pay scale applicable, without any allowance but inclusive of accrued increment. At the end of each year accrued Gratuity shall be debited as expense and credited to a deferred liability account and properly shown in the account of the Dhaka Stock Exchange.
4.3.19 Transfer Job transfers generally fall into one of two categories: those initiated by management or those made in response to an employee‟s request. Transfers initiated by the employer may be necessary because of temporary workload imbalances; the need to rotate employees to limit exposure to harmful conditions; corporate restructuring; dislocations caused by job elimination or reductions in force; and demotions in response to disciplinary or performance problems. Employees may initiate a transfer because they want new or broader experience; there is friction among coworkers; they want to better use their skills; or they need
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accommodation for disabilities or family care responsibilities. Either way, transfers may be temporary or long-term, depending on the organization‟s business needs.
4.3.20 Termination Employers should have termination policies to ensure consistent treatment among employees whose working relationship with the organization is ending, for whatever reason. The Service of probation or temporary employee can be terminated without assigning any reason and the incumbent shall not be entitled to any compensation for termination of service except his accrued benefits. The authority may terminate the service of the confirmed employee or call upon him to resign without assigning any reason by giving him 3 (three) month‟s notice in writing of 3 (three) month‟s substantive pay in lieu thereof. However, such person will be entitled to encashment of accumulated Earned Leave (if any), Gratuity and Provident Fund. The Board of Directors shall have the right to remove, dismiss or retire from the service an employee as a disciplinary measure or on medical ground. The service of an employee may also be terminated by giving 3 (three) month‟s notice or 1 (one) month‟s pay in lieu thereof in the event of abolition of the post of the post being decided surplus.
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Recruitment & Selection Process OF Human Resources Department
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5.1 Recruitment Recruiting refers to organizational activities that influence the number and types of applicant who apply for a job and whether the applicants accept jobs if offered. Different companies follow different methods to acknowledge the labor market about their job vacancy and goes through a process to select the tight employees. The type of labor force arid the organizational culture and structure plays a big role on how a company is going to recruit. As an independent & growing organization DSE has adopted the traditional as well as new ways of recruitment. The Assistant General Manger of the Human Resource currently heads this department. The major functions of this department are strategic planning and policy formulation for Compensation, Recruitment, Promotion, Training and developments, Personnel Services and Security, All major personnel functions are integrated in the best possible way at DSE, which results in its higher productivity. The Human resource officer monitors the employee staffing and administration activities. The Training officer supervises Training, development & rotation activities. The Human Resource Department is going to recruit huge number of qualified employees from March’2009. The Recent Recruits are as follows:
Chief Executive Officer (CEO) – Proposed.
Chief Operating Officer (COO) – Processing.
Search for Professionals (Different Departments) – Have Just Completed.
Executive On Probation (Fresh Post Graduate) – Processing.
Project at Nikunja (Engineers) – Have Just Completed.
5.2 Sources of Recruitment At first, all the departments after employee need analysis send their requirement to HRD through their respective divisions. After obtaining necessary approval from the management, HRD sets target and prepare recruitment planning. According to job specification MR goes for recruitment. www.dsebd.org
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5.2.1 Recruitment process is as follows: 1. Give advertisement in the daily newspapers 2. Receive applications and file them, 3. Shortlist of the applicants 4. Fix date and time of a preliminary interview 5. Contact with the applicants and inform them about the interview over telephone or letter 6. Fix further date and time for final interview if it is required and inform the interviewee accordingly 7. To prepare appointment letter for the finally selected interviewee 8. Give appointment to the person with a detail job description. 9. Immediately after the recruitment separate employee file is opened comprising all the relevant information of the particular employee. This personal file is prepared, mainlined and updated by HRD. In fact one of the main responsibilities of HRD is updating of all the personal file of the employee. Recruiting is the discovering of potential candidates for actual or anticipated organizational vacancies. There arc many sources of recruiting like, internal search, advertisements, employee referrals /recommendations, employment agencies, temporary help services, different educational organization (schools, colleges and universities), professional organizations, casual or unsolicited applicants and also other sources. For the operative level employee recruitment; DSE gives advertisement in the daily newspapers and also through on-line, candidates can fill of the application forms, and from there the candidates have to sit for an written test in Mathematics, English and General Knowledge and then IQ test finally if they are qualified then they are called for an interview. The organization Contacts with the applicants and inform them about the interview over telephone or letter and then the final selection is done. Finally they Give appointment to the person with a detail job description.
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For executive Level, they arc recruited through advertisement and sometimes executives’ are also recruited from the recommendations and referrals of any current employee of the organization.
5.3 Recruitment Procedure Basically there are two broad methods of recruitment: External recruiting and internal recruiting. Most organization has to use both internal and external sources for generating sufficient number of applicants. Following is the discussion of how DSE uses these two methods foe their recruitment process,
5.3.1 External Recruitment Usually most of the jobs in DSE are filled through external recruitment. And they have recruited extensively since their establishment. They would need more and more new employees. Now let look at the methods used by DSE in their recruitment process:
Media Advertisement (News paper)
5.3.2 Media Advertisement Various media are used by organizations. Among media the most common way used, daily newspaper ads. Ads usually include the following: The requirements for the job. For example the educational skills requite experience and Deadline for the job application. Job tide foe fulltime job, but usually the advertisements do not provide much information about job.
5.3.3 University Recruiting DSE informs the universities if they have any job vacancy. They provide the specification of the job according to which the respective department of the universities gives advertisement. For example, in Daffodil International University the Department of Career Development Center (CDC) is involved in the job of informing students about new jobs available by www.dsebd.org
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posting advertisements. Usually for DSE the job they offer in the universities posting are part time jobs and occasionally full time jobs. An example of job advertisement is attached in the report. This process has been quite successful because many of the time college /university recruits turned out to be efficient; and effective and later were recruited as full time employees. This part-time recruitment process also gives universities students an opportunity to earn money and also have and exposure to practical work experience. This is giving a social standing for DSE.
5.3.4 Internet DSE is few of the organizations in Bangladesh that uses Internet for recruitment. It has a linking "Career” page in its Home Page that gives a list of jobs available at present. It can go from operating level post to managerial level, and full Lime to part time. The page provides an application form. This makes it easy for the job seeker to apply for a job with out going through the process of looking for a job in the newspaper. Again this is a new and easy way of recruiting for DSE because other than the initial cost, these docs not cost them much except maintenance cost whereas news paper advertisement; is much more costly. Also this provides them with list of new applicants in their database automatically- the application form in the Internet is given below. From the form we can sec that it is quite detailed and informative.
5.3.5 Interns DSE recruits intern from different universities for example, Daffodil International University Dhaka University IBA, NSU and other different public and private university. It gives them as exposure of potential employee. There are number of purposes for these programs: Allows DSE to get specific projects done, Give the company an exposure to potential employees who may become their "recruiters"-Through DSE docs not have special system of recruiting interns as permanent employees they do get some preference if they were efficient in their internship. For the interns it is a change to use talent in the real working environment and a possible job opportunity.
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5.3.6 Internal Recruitment There is evidence of internal recruiting in DSE, but it is not a structured process. For example, there is specific time period or method used to make the employees know about available jobs or vacancies.
5.4 Selection Selection is the process by which an organization chooses from a list of applicants the person or persons who best meet the selection criteria for the position available, considering current environmental conditions. Like any other organization there are actually multiple goals associated with DSE selections process. All selection programs of DSE attempt to identify the applicants who have the highest chance of meeting or exceeding the organization's standards of performance. Through selection process DSE tries to find out the optimal match between the job and the amount of any particular characteristics that an applicant may possess.
5.5 Selection Criteria At the core of any selection system is an understanding of what characteristics arc essential for high performance- One of the major goals of DSE selection process is to accurately determine which applicants possess the knowledge, skill, abilities and other characteristics dictated by the job.
5.6 Categories of Criteria The criteria used by DSE for making selection decisions can be summarized in several broad categories: education, experience, and personal characteristics, physical Characteristics and others.
5.6.1 Formal Education DSE wants to find the person who has the right abilities and attitudes to be successful and able to achieve the organization's goals. Usually, a large number cognitive, motor, physical and interpersonal attributes are present, because of genetic predisposition and because they www.dsebd.org
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were learned at their home, at school, on the job, and so on. For certain jobs DSE stipulate the education requirement in a particular area of expertise, such as engineers for its technical sides. DSE prefers graduates from different Universities and it also mentions the minimum grade point for the respected applicants who can apply for the job. DSE always tries to set up the standards that arc actually required by the job. Another useful criterion is used by DSE is experience and past performance selection specialties believe that past performance on a similar job might be one of the best indicators of ability and work related attitudes. They believe that the perspective employee who has performed the job before and is applying for a similar job must like the work and must be able to do the job well.
5.6.2 Personal Characteristics and Personality Type One of the most important criteria DSE uses as a selection criterion is personality type and personal characteristics of the perspective applicants. Personality characteristics include marital status, sex, and age and so on, DSE usually prefers male worker for its field side works, since they like to accept a transfer and lengthy overseas assignments- Age also use as criteria for selection purpose. DSE uses a minimum and maximum age restrictions for jobs but they use age as selection criteria only after a careful thought and consideration. DSE always prefers good computer and communication skills as one of the criteria. DSE considers that its applicants must have good interpersonal skills for completing the job effectively. DSE also prefers one particular aspects of personality-as being outgoing -an important criterion for the workers who have to spend most of the time with customers.
5.7 Selection Process The selection decision is perceived as a series of steps through which applicants pass. At each step, more applications are screened out by DSE or more applicants accept other job offers and drop from the list of applicants. The steps followed by DSE arc discussed below. 5.7.1 Step 1: Initial Screening DSE usually starts its selection process by asking an applicant to complete an application form. DSE asks for enough information to determine whether the individual is minimally www.dsebd.org
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qualified for die position. Usually, DSE uses application blanks as a screen tool for jobs that requires some types of professional certification like an ACCA, CMA, CA for business graduates even MCP for Computer Engineers. In this way the application blank can clement the need for subsequent interviews to gather this information. This makes the selection process of DSE far more efficient first, by reducing the number of applicants that need to be interviewed and second, by allowing interviewers to focus on other kinds of information (personality, technical and communication skills). While designing application blank DSE gives more emphasize on that information which arc important for the organization and help die organization to make a better job related assessment of the applicant. DSE avoids those types of questions that related to race, physical health, disabilities and so on. After collecting this information DSE selects 30-40% of the applicants who have minimum qualification for the job and DSE does this screening process through computer in order to avoid -my personal biasness or unfairness. Applicants who are judged as minimally qualified on the basis of the application blank will then proceed to the next phase of the selection process. 5.7.2 Step 2: Completing the Application Form Once the initial screening has been completed, applicants are asked to complete the organization's application form. The amount of information required may be only die applicant's name, address, and telephone number. In general terms, the application form gives a job-performance-related synopsis of what applicants have been doing during their adult life, their skills, and their accomplishments. Applications are also useful in that they obtain information the company wants. 5.7.3 Step 3: Employment Written Test Organizations historically relied to a considerable extent on intelligence, aptitude, ability, and interest tests to provide major input to the selection process. Even handwriting analysis (graphology) and honesty tests have been used in the attempt to learn more about the candidate—information that supposedly leads to more effective selection. The selection process of DSE differs for each level in the organization. The entry-level positions necessitate written tests and viva whereas senior level positions requires viva.
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5.7.4 Step 4: Cognitive Ability Test The Ability Tests are concentrated to judge the candidates: • Oral communication & written communication skill, • Analysis and judgment. • Creativity Initiative. • Patience. • Conflict management skills, • Organizational sensitivity and • Tolerance for stress. DSE is planning to introduce psychological and personality test in their selection process. DSE can measure the personality characteristics and temperament through these techniques. So, by introducing new techniques with its existing techniques DSE can effectively select the applicants who have potential qualifications for performing the job. 5.7.5 Step 5: Employment Interview DSE uses interview as a selection technique because through interview it can identify die qualified candidates. While designing interviews DSE usually follows two strategies for making the most out of an interview arc structuring the interview reliable and valid, and training managers to use the available interviewing techniques. During the selection process in DSE, the HR head in the presence of the head of the specific department interviews the potential candidate where there is a vacancy. The HR uses a more or less informal approach to interview the candidate. He often repeats certain questions to sec if the information given is right. There are different kinds of interviews like selection interview, career planning interview performance appraisal interviews, counseling interview, disciplinary interview, exit interview etc. The interviewers in the interview board of DSE include:
President of DSE
Directors or Members of DSE
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CEO of DSE
This combination makes die interviewing process more efficient and effective. 5.7.6 Step 6: Reference & Medical Check Up The next step in the selection process is to go through an investigation of those applicants who appear to offer potential as employees. This include contacting with the previous employer or referrals to confirm the candidates work record, behavior, attitude and other performances which was appraise or prominent in that person. This also includes contacting other job related and personal references and verifying the educational accomplishments shown on the application. Also the candidates have to go through a medical check up to determine whether they ate physically fit to work or not. The majority of physical examinations are currently required to meet the minimum standards for the organization's group life and medical insurance programs and to provide base data in case of worker's compensation claims. Routine check-ups like blood-group test, H1V test, Eye power, and hepatitis, drugs and fitness test. These are only to see whether the person could fit in the actual job setting. 5.7.7 Step 7: Selection Decision The selection decision is usually the ultimate decision of DSE. After passing the entire step DSE decides which applicants is hired by die organization. A: this stage, die managers make [he final decisions and offer the available job to potential candidates who arc qualified after passing all [he steps-Through this selection process DSE choose from a list of applicants, the person or persons who best meet the selection criteria for the position available, considering current environmental conditions. 5.7.8 Step 8: Job Offer Those individuals who perform successfully in the preceding steps are now considered to be eligible lo receive the employment offer. Those individuals, who perform successfully on the
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employment tests and the comprehensive interview and arc no: eliminated by the development of negative information on either the background investigation on the physical examination or the probation period, arc considered to be eligible to receive an offer of employment- Finally, among the potential applicants the best applicant is chosen whose score is high in the justified evaluation sheet and considered to be selected as an employee.
5.9 Critical Aspects of Labor force of DSE There are some of the special and interesting aspects of DSE labor force, For example:
Young and Energetic Work force
The Company is reputed to have young and energetic work force, which is the best asset of it. It seems that DSE is attracting the young generation, as the company has been able to recruit substantial number of young people.
The other aspect is DSE is encouraging female workers. Though still now, the number of females is still not that high.
Trends in Recruitment
Since the beginning, DSE has made necessary recruitment to all-important positions. The trend in recruitment of employees shows that it has a decreasing trend and especially female employees,
Gender Basis of Employees
Female employees are well represented at DSE with a fairly large number, of them employed as officers* But there is the glass ceiling as we can1 sec from the graph that at the managerial level there are few numbers of female employees. Performance evaluation is the activity used to determine the extent to which an employee performs work effectively, DSE uses both Formal an informal methods of performance evaluation.
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Findings, Recommendations and Conclusion
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FINDINGS 6.1 Findings on HRD HRM is a very vast and elaborate section of overall management process. Behind every success or failure HR is considered the ultimate deciding factor. That is why DSE always gives high priority in the overall HRM practice. From report here I found few key issues which are as follows: As a large organization, DSE has huge activity especially in HRD but it is found that in HRD it has only 8 numbers of employees including One AGM, One Manager, One Sr. Executive, Two Executive, One Sr. Office Assistant and Two Office Assistant which insufficient for this large Department. The employees are not kept update on new polices and procedures which infers the point that HR Department is not all proactive. The HR department should make sure that the employees aware of any new polices and procedures. The HR Department maintains a personal record file for every employee and now it is time to integrate the personal record system with Human Resource Information System (HRIS) database to make decisions. It is noticed that the Annual Confidential Report (ACR) is prepared every year but result is not goes to the right way. It is also found that the HRD does not motivate employees appropriately, which really drawback for the output of organization. New technologies are not adopted in the HR Department. It has been found that in the HR Department has qualified personnel but few of them are technically unskilled. It also noticed that training of employees is not adequate for their profession.
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It is found that the employee’s performance appraisal process of DSE is irregular. It also noticed that the evaluation job satisfaction is irregular. It is also found that employee turn over is high in DSE. Since DSE always gives much emphasize on HRM especially in recruitment and selection process phase. In the process of studying the issue following aspects have been identified and deserve explanation:
6.2 Staff or Personnel Planning Employment Planning is the process of formulating plans to fill future openings based on an analysis of the positions that are expected to be open and whether these will be filled by inside or outside candidates. Filling of future positions can be designated from maintenance clerk to CEO. According to discussion with DSE officials, it reflects that the organization docs not develop and update periodical personnel planning for recruitment. Personnel Planning and recruiting directly affect employer commitment because commitment depends on hiring employees who have the potential to develop. Developing Personnel Plans requires three forecasts: 1. One for personnel requirements 2. One for the supply of inside candidates 3. One for the supply of outside candidates But according to recent practice, internal problems, DSE docs not allow HR to develop Long-term personnel planning for recruitment opportunity for new employees.
6.3 Lack of Forecasting of Internal and External Recruitments Internal recruitment refers to recruitment from existing internal staff as candidates for other requited positions of an organization and external recruitment for external candidates. In DSE, Internal recruitment neither is nor structured according to their verbal statement. They
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do not go for forecasting the supply of Inside Candidates for cross-functional activities of specialized, professional or general areas of works. Inter departmental exchange or recruitments of internal candidates require necessary trainable technical and interpersonal skills for enhancing level of efficiency of staff.
6.4 Reference Checking According to interview with DSE personnel, for recruiting external candidates DSE usually selects candidates mainly on the basis of education, experience, personal character, physical character and others. But they do not make more emphasis on reference checking. But background investigation and reference checking is very important too avoid hiring mistakes and negligent hiring which could be disastrous and could lead to problems of absenteeism, tardiness, poor work quality and insincerity.
6.5 Equal Employment Opportunity Benefits In the Recruitment & Selection process DSE must address the issue of equal employment opportunity benefits for employees in all employment location. According to interview with DSE we came to know that while screening for recruiting and selection, they avoid questions of race, disabilities, and health matters in the form. The usually make emphasis on "who can do better for organization ", On the other hand, I found that the number of female employees out of total employees is only 20%.
6.6 Absence of Diverse Workforce "Mote diverse workforce is not social responsibility but it is a necessity" -mentioned by Carry Dessler. Harmonizing and sharing knowledge along with different cultural background, race, color, and age would definitely add value to the organization. DSE does not have very diverse workforce as 1: encourages only the young age group for recruitment.
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7.1 Recommendations Getting the right people, at the right place and time is crucial for the success of each and every organization. The job of the selection process is to identify die right kinds of people for the job. So there are few recommendations for HRD in my perspective.
Since HR activities are expanding day by day and as a large organization, HRD should increase their employee for better performance.
The HR department should make sure that the employee aware of any new polices and procedures either adopted or not.
Since it has found lack of motivation on employees so HRD can motivate to the employee for better output.
Salary, bonus or other financial benefits are not up to the mark as other financial organization. So it should be clear. Otherwise employee turn over rate will be increased.
DSE should create better opportunity like promotion, incentive so that employees turnover rate can be prohibited.
This is the era of modern technology of computing so HRD should adopt latest configured Computer, Internet, Fax. Now days without this HRD cannot move.
The Human Resource Information System (HRIS) is a software or online solution for the data entry, data tracking, and data information needs of the Human Resources, payroll, management, and accounting functions within a business. An effective HRIS provides information on just about anything the company needs to track and analyze about employees, former employees, and applicants.
It is found that the employee’s performance appraisal and job satisfaction process is irregular. So HRD should make sure it is efficient and effective.
Since Annual Confidential Report (ACR) is prepared every year for the employee’s and after result should make in a right way so that nobody can suffer.
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Since few unskilled employees in HRD so they should proper trained up and make sure that they are technically sound for the regular HR activities.
Since DSE always gives much emphasize on HRM especially in recruitment and selection process phase. In the process of studying the issue following recommendations have been identified and deserve explanation;
Staff Planning is the first important factor for successful recruitment for long-term benefit of an organization. Therefore, they should develop both long short-term staff and personnel planning for recruitment. Factors in forecasting Personnel needs should not taken into consideration; 1. Quality and nature of employees 2. Technological and administrative changes 3. Available financial resources
DSE needs to forecast the supply of the internal candidates through: 1. Qualification inventory 2. Personnel replacement charts 3. Position replacement card
In order to make structure recruitment, HR should make for planning and forecasting the supply of internal candidates in die first place. Qualification or skill inventory plays an important role for this purpose. It should include: Work experience, stock, capital market, industry experience, formal education, training information and data in compliance with equal employment opportunity conditions.
DSE verifies the accuracy of factual information provided by the applicants. But they should make reference checking more productive, they should also emphasis on uncovering damaging background information such as criminal records or any previous termination due to employees fault and insincerity, DSE should make a reference audit requires contracting:
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1. At least two Superiors 2. At least two peers 3. Two Subordinates
Some suggestions for DSE for collecting Background information: 1. Check al! Applicable state law 2. Information should not be obtained which will not be used 3. Information should be job related and specific 4. Information should be kept as confidential and up to data 5. Unreasonable investigation should not be authorized
For selection and recruitment of External candidate, DSE should also emphasize on: 1. General economic conditions 2. Local market conditions 3. Occupational market conditions as well as other criterion
DSE should hire and encourage qualified women employees to make a healthy gender balance, which would definitely lead DSE as equal opportunity employer. They can also gain comparative advantages in this regard.
DSE can take steps to actively recruit more diverse work force especially for recruiting minorities, older qualified people and women. Thus they contribute not only as profit maximizing but also as socially responsible reputed organization.
It is also found out that not all the people at the HR Department at DSE have an academic background in Human Resource Management So recommendation is that all Personnel Relations Managers should have a degree from the discipline of Human Resource Management. This will enable DSE to manage its people more effectively and efficiently.
It may change the advertisement policy for the vacant post and new rules should be sent to the Human Resource department for Recruitment and Selection process.
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It is seen that in case of DSE, some steps are occasionally omitted. This sort of practice may sometimes make the selection process not as reliable as it should have been. Recruitment process should be transparent and in accordance with organizational recruitment policies, so that the efficiency of the employees' can be ensured to some extent. So I recommend that the management may strictly follow all the steps at all times without any exceptions.
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7.2 Conclusion The role of Dhaka Stock Exchange Ltd has been remarkable in recent years. It has gained the confidence of public and is able to attract more funds. At the end of last decade what was impossible has now become possible and any company listed with Dhaka Stock Exchange can expect to sufficient funds through it. In 2nd July 2009 DSE has crossed Tk.1000 crore which is landmark for capital market in Bangladesh.
The Dhaka Stock Exchange has been able to attract a sufficient volume of foreign funds and the number of investors is growing day by day. If this trend continues Dhaka Stock Exchange market will be efficient one in the near future .At the end of year 2010 Dhaka Stock Exchange is expected to become one of the major stock markets in this region.
So far we have observed that Dhaka Stock Exchange has suffered from ups and downs and it can be attributed to the efficiency of the members and some of the consistent policies of the Government with more experience. In the coming year in dealing with such busy capital market both the Dhaka Stock Exchange members and Government policy makers are expected to be more consistent in their practices and policies. Their product role in the future will certainly be a major factor in the performance of Dhaka Stock Exchange market. The first priority of HR department is to assist and support functional departments. DSE has focused highest priority in the human resource management and in consequence of that it has established human resource function under a separate department.
Finally regarding recruitment and selection DSE should plan future recruitment procedure and strategies along with Human Resource Management, bearing in mind for better inter organizational communication, gender balancing, forecasting the supply of internal and external opportunity, benefits and steps for Diverse workforce. Thus DSE can be recognized not only as profit maximizing organization but also as reputed socially and globally responsible organization along with efficient and effective Human Resources as Human Capital.
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Professor M. Shahjahan Mina, Advisor, Faculty of Business and Economics, Daffodil International University.
Ms. Hosne Ara Pervin, AGM, HRM, Administration & Training Affairs, Dhaka Stock Exchange Ltd. 9/F Motijheel C/A, Dhaka-1000.
Mr. Mohammad Ebna Reaz, Executive Officer, Merchant Banking Wing, Head Office, Southeast Bank Ltd, Dilkusha C/A, Dhaka-1000.
Md. Saiful Islam, Executive, HRM, Administration & Training Affairs, Dhaka Stock Exchange Ltd. 9/F Motijheel C/A, Dhaka-1000.
Ms. Sharmin, Research, Development & Information
“Personnel/Human Resources Management” by David A. DeConzo and Stephen P. Robbins.
DSE Monthly Reviews for May, 2009
DSE Annual Report, 2007-2008
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Syed Kamal Uddin (Suman) [email protected]