BD Economy & Capital Market

Presented by:Suman Kundu, Senior Manager

Alliance Financial Services Limited


General InformationOfficial Name: The People's Republic of BangladeshGeographical location South AsiaPolitical system: Parliamentary democracyCapital name: Dhaka (Metropolitan Area 1528 sq.km)Time zone: GMT + 6 hoursMajor cities: Dhaka, Chittagong, Khulna, Rajshahi, Sylhet, Barisal,

RangpurPrincipal rivers: Padma, Meghna, Jamuna, Brahmaputra, Teesta, Surma

and Karnaphuli.(total 310 rivers including tributaries).Principal industries: Readymade garments, pharmaceuticals, cements,

garment accessories, chemicals, fertilizers, newsprint, leather and leather goods, paper, sugar, jute, ship building.

Principal exports: Readymade garments, frozen foods (shrimps), leather, leather products, jute, jute products, tea, ceramic, textile fabrics, home textile, chemical product, light engineering products including bi-cycle.


GeographyBoundary: North - India (West Bengal Meghalaya)

West - India (West Bengal)East- India (Tripura & Assam) & MyanmarSouth - Bay of Bengal

Area: 56,977 sq. miles or 147,570 sq. km.Territorial water: 12 nautical miles Territorial Sea, 200 nautical miles

Economic Zone.Principal seasonal crops and fruits:

Paddy, jute, wheat, tobacco, pulses, oil seeds, spices, vegetables, jack-fruit, banana, mango, coconut, pineapple etc.

Natural resources: Natural gas, coal, lime, white clay, granite, glass sand.


National Demographics

Total population (million) 156.59

Population Growth Rate 1.22 %

Population Density (per sq km) 1,203 Person

Life expectancy (Year) 70.7

Adult literacy rate 58.79 % (15 years +)


Source: http://data.worldbank.org/indicatorSource: http://www.theglobaleconomy.com/Bangladesh/Literacy_rate

National Demographics

Total population (million) 156.59

Population Growth Rate 1.22 %

Population Density (per sq km) 1,203 Person

Life expectancy (Year) 70.7

Adult literacy rate 58.79 % (15 years +)


Source: http://data.worldbank.org/indicatorSource: http://www.theglobaleconomy.com/Bangladesh/Literacy_rate


Against the backdrop of the global economic slowdown, the Bangladesh economy has performed strongly over the past few years.

Despite the fallout from the Euro debt crisis still contributing to an uncertain environment, the Bangladesh economy has pursued accommodative monetary and fiscal policies.


Agriculture is one of the prime sectors of Bangladesh‘s economy.About 80 percent of the total population lives in rural areas, with 70 percent of them employed in agriculture.Agriculture contributes about 20 percent to the country's GDP, about 15 percent of which is contributed by the crop sector alone. Food security, employment creation and poverty alleviation are closely related with the development of agriculture. Besides, there is another issue on achievement of self-sufficiency in food production within 2013.


Reason/Country 2009 2010 2011 2012 2013 2014 2015

E2016

EWorld -0.009 5.379 4.169 3.404 3.408 3.389 3.451 3.759Advances Economies -3.422 3.072 1.692 1.224 1.366 1.805 2.363 2.416E & D Economies 3.08 7.384 6.24 5.16 4.997 4.59 4.261 4.737E & D Asia 7.467 9.556 7.714 6.78 7.039 6.799 6.644 6.419Bangladesh 5.315 6.03 6.494 6.259 6.066 6.108 6.306 6.758China 9.214 10.41 9.3 7.763 7.751 7.364 6.762 6.3India 8.48 10.26 6.638 5.081 6.899 7.168 7.46 7.468Pakistan 0.36 2.58 3.62 3.84 3.70 4.14 4.30 4.70Vietnam 5.40 6.42 6.24 5.25 5.42 5.98 6.00 5.80Source: IMF World Economic Outlook April 2015 Alliance Financial Services

Limited


Compared to the global average, Bangladesh has witnessed higher GDP growth rates.

Despite a fall in world output during the immediate aftermath of the financial crisis in 2009, Bangladesh has consistently exceeded growth rates of 6% per cent since 2010.

Moreover, Bangladesh has achieved average growth rates and is projected to remain close to the developing countries' averages in 2015 and 2016.


Source: IMF World Economic Outlook April 2015


Bangladesh has experienced a moderate rate of inflation under double digit throughout last decade except FY 2011. The rate of inflation of Bangladesh has started to reduce after reached very high levels during FY 2011. According to IMF World Economic Outlook April 2015, inflation of Bangladesh will decline and stabilise around single-digit at the end of this year through a combination of restrained fiscal and monetary policies along with an easing of supply constraints over time.


Foreign currency reserves of Bangladesh have stood at $23.05 billion as on March, 2015

Data Source: Bangladesh Bank


Wage earner’s remittance flow of the country have stood at $1.24 billion during the month January, 2015

Data Source: Bangladesh Bank


According to IMF World Economic Outlook per capita GDP of Bangladesh will be reached at US $ 1,387 on the year 2016.

Source: IMF World Economic Outlook April 2015


Goldman Sachs investment bank and economist Jim O'Neill in a research paper identified – Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam – as N-11 (Next Eleven Countries) due to having a high potential of becoming, along with the BRICs, the world's largest economies in the 21st century.

The criteria that Goldman Sachs used were macroeconomic stability, political maturity, openness of trade and investment policies, and the quality of education.


The long-term economic outlook of Bangladesh will be positive.

GDP size of Bangladesh will be almost double within year 2025 and will reach from US$ 110.61 billion (2011) to US$ 1,466 billion (2050) according to Goldman Sachs.


GDP per capital of the country will also increase almost same rate.

According to Goldman Sachs GDP per capital of Bangladesh will be reached at US$ 790 on year 2020 whereas actual GDP have already reached at US$ 1,172 on the year 2014, which indicate actual position of the country much better than Goldman Sachs forecasting.


Bangladesh Securities and Exchange Commission (BSEC) was established on 8th June, 1993 as the regulator of the country’s capital market.BSEC achieved IOSCO 'A‘ membership on December 22, 2013.DSE, the first stock exchange of the land was incorporated on April 28, 1954, while the second stock exchange – CSE was established in 1995.After independence of Bangladesh, trading activities started in August 1976.


From 1998 automated screen based trading was introduced by both the exchanges through LAN and WAN connectivity and HP non stop trading platform is providing basic architecture.Central Depository Bangladesh Limited was incorporated on August 2000 for recording and maintaining securities accounts and registering transfer of securities; changing the ownership without any physical movement.


The Stock Exchanges are registered as Public Limited Companies under companies Act.Ownership of Stock Exchanges demutualize from the trading right during 2013Presently DSE has 250 TREC holders while CSE has 146 TREC holders.The exchanges are Self Regulatory Organizations and their activities are regulated by - Articles of Association - Own set of Rules, Regulations and Bye-laws - Exchanges Demutualization Act 2013 - Securities and Exchange Ordinance 1969 - Securities and Exchange Rules 1987 - Other relevant laws.


Public Market : For general trading Spot Market : For pre-book closer trading Block Market : For bulk volume trading Odd lot Market : For odd lot trading

Trading SessionTrading at DSE & CSE is performed through a non-stop platform in following sessions :

Continuous Trading Hours : 10.30 AM to 2.30 PM

Trading Day : Sunday To ThursdayAlliance Financial Services

Limited

Primarily Settlement Period is T+1 and T+2 DaysAll the trades are cleared and settled, as per Settlement of Stock Exchange Transactions Regulations 1998.From January 24, 2004 Central Depository System (CDS) started functioning & transactions of all demated Securities are settled and registered through CDSA central clearing company is under process to ensure efficient financial settlement


Disclosure Requirements by the Listed Companies:Yearly Audited Financial Statement (FS) within four months of the year end.Half-yearly & 3rd Quarterly Un-audited FS within one month of the first half-year end.1st Quarterly Un-audited FS within 45 days of the end of respective quarter. Price Sensitive DisclosuresPreparation of the FS mandatory to company with:International Accounting Standard (IAS)International Standards for Auditing (ISA) Corporate Governance:All the listed companies are required to adopt the Corporate Governance Guidelines issued by SEC and required by Listing Regulation


Country M.Cap(US $ bn)

GDP(US $ bn)

M.Capto GDP ratio

Bangladesh ( DSE) 40.17 185.415 21.66%India (BSE) 1,664.02 2,049.50 81.19%

Pakistan (Karachi SE)

72.70250.13

29.06%

Sri Lanka (CSE) 22.61 74.588 30.31%


Source: IMF World Economic Outlook & Website of Stock Exchanges of Respective Countries.

LISTED SECURITIES (As on April, 2015) Companies : 280 (A– 224, B- 16, N-6, Z- 34) Mutual Funds : 41 Debentures : 8 Corporate Bond : 2 Govt. T. Bond : 221

All Securities are Distributed in 22 Sectors: 1. Banks 2. Cement 3. Ceramic Sector 4. Corporate Bond

5. Debenture 6. Engineering 7. Financial Institutions 8. Food & Allied 9. Fuel & Power 10. Insurance 11. IT Sector 12. Jute 13. Miscellaneous 14. Mutual Funds 15. Paper & Printing 16. Pharmaceuticals & Chemicals 17. Services & Real Estate 18. Tannery Industries 19. Telecommunication 20. Textile 21. Travel & Leisure 22. Treasury Bond




Sector Market Cap. in million % of total Market CapFinancial SectorBanks 413,463.50 15.78%Financial Institutions 173,985.08 6.64%Insurance 90,870.91 3.47%Mutual Funds 28,848.05 1.10%

Sub-Total 707,167.54 26.99%ManufacturingFood & Allied Product 230,501.01 8.80%Pharmaceuticals & Chemicals 328,903.24 12.55%Textile 91,666.45 3.50%Engineering 106,568.11 4.07%Ceramic 22,435.29 0.86%Tannery 23,666.83 0.90%Paper & Printing 1,996.13 0.08%Jute 802.87 0.03%Cement 198,423.73 7.57%

Sub-Total 1,004,963.66 38.36%Service & MiscellaneousFuel & Power 321,196.81 12.26%Services & Realestate 19,868.97 0.76%IT - Sector 5,849.76 0.22%Telecommunication 461,024.42 17.60%Travel and Leisure 26,961.84 1.03%Miscellaneous 66,319.81 2.53%

Sub-Total 901,221.61 34.40%BondCorporate Bond 6,401.17 0.24%

Sub-Total 6,401.17 0.24%Grand Total 2,619,753.98 100.0%




Sector 15-Jan 14-DecBank 8.62 8.63Financial Institutions 18.91 19.52Mutual Funds 6.44 6.76Engineering 20.88 22.47Food & Allied 36.33 33.51Fuel & Power 11.97 12.8Jute 158.64 175.79Textile 12.9 13.2Pharmaceuticals 25.86 26.43Paper & Printing 18.74 20.64Service & Real estate 36.51 42.8Cement 34.67 34.8IT 23.87 23.72Tannery 20.24 20.2Ceramic 28.13 29.83Insurance 12.46 13.5Telecommunication 30.6 33.6Travel and Leisure 14.97 15.83Miscellaneous 42.11 46.24Market P/E 17.19 17.77


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BD Economy & Capital Market