INTRODUCING STOCK MARKET

Presentation by: Dawa Dakpa, Research/Listing

Division

GIST OF THE PRESENTATION Overview; Vision & Mission; Objective; Definition of Stock Market, Shares &

Securities; Shares transaction; Benefits from shares, stocks & Securities; Conclusion; and Q&A.

Overview of RSEB:

Established in October 1993;

Incorporated under Companies

Act 1989;

Regulated under the Financial

Institutions Act 1992;

Owned by Four Brokerage Firms;

De-linked from RMA in July 1996

as an autonomous body ;

Non-Profit making/service

oriented organization; and

Developed under the

technical assistance of the

Asian Development Bank and

the parenthood of the Royal

Monetary Authority.

VISION: “ To become an integral part of

the financial system and participant

in the nation building”.

MISSION: “To develop and establish

a fair, orderly and transparent

securities market with the objective

to facilitates efficient mobilization

and allocation of capital, and ensure

apt regulation to maintain market

integrity and investor confidence”.

OBJECTIVES:to encourage wider spread of

shares ownership in enterprises;

to mobilize saving;

to provide forum to raise equity

capital for new venture and;

to provide liquidity to the

existing shareholders;

What is a Stock market?It provides a venue to convert Securities

into money or vice versa.

What is a share?A share of stock represents a

part ownership of a company. for example, if you buy 10,000 shares in a company that has issued 100,000 shares, you own 10% of that company.

What are Securities?A securities includes (shares, stock, bonds, debenture stock or other marketable securities), as may be declared by the Government to be securities that is available for trade on a Stock Exchange. It can be of equity and debt securities.

BUYING AND SELLING OF SHAREHow can I buy or sell shares?Approach the Brokers for buy or sellWhere can you find one?BOB Securities Ltd. Bank of Bhutan;BNB Securities Ltd. Bhutan National Bank;RICB Securities Ltd Royal Insurance Corpn. of Bhutan; and DROOK Securities Ltd Bhutan Dev. Finance Corpn

PROCEDURES FOR BUYERS Proceed to any of the brokerage firm

with a copy of CID; Fill up an

1. application form;2. order slip; and3. client’s agreement form;

Deposit money as advised by the broker in one of the commercial bank;

The broker will then place order at the exchange trading floor;

The order will remain in the RSEBL system till it gets a matching sell order i.e at same price; and

The trades were executed on every Tuesdays and Fridays depending on the matching order.

PROCEDURES FOR SELLERS

Same procedures will be followed like that of the buyers except; and

Instead of money, the seller must surrender the trade confirmation issued by the previous executing broker.

AFTER TRADING

Ownership shall be changed to the buyer’s name automatically within t+3, i.e. trade date plus three working days;

Buyer must get the Trade Confirmation within t+3;

Seller must get the sale proceeds of the shares within t+3;

All trades must be settled within t+3; andThe change of ownership with the

respective companies will be done by the exchange accordingly;

Transaction of SharesTrading Cycle

BROKER- Creates Client Account

- Accepts Orders with Money for Buy & Shares for sell

EXCHANGE- Pooling of Orders

- Matching of Orders

- Trading

COMPANYDividends

BANKS

DEPOSITORYBook Entry Register of shareholders at CD

Clearing & Settlement

CUSTODIAN

CLIENT

WHAT ELSE DO I BENEFIT BEING AN INVESTOR?is entitled to receive any dividends; have bonus;can participate in rights issues; andAs owners of the company, Shareholders can

also participate in decision making process during the AGM through voting rights.

WHAT IS A DIVIDEND?A dividend is a part of a company’s profit after tax distributed to shareholders.

UPDATING THE MAILING ADDRESSES:A shareholder must update his mailing address whenever he move from one place to place.

Lost of Trade Confirmation:Write an application to the Central Depository. The CD will issue a Balance Confirmation.  

WHAT IS A RIGHTS ISSUE?A rights issue is an invitation from a company to its existing shareholders to purchase additional shares proportionate to their existing holding in the company.

WHAT IS A BONUS ISSUE?A bonus issue is a process where money from a company’s reserves is converted into issued capital, which is then disturbed to shareholders as new shares, in proportion to their original holdings.

RISKS & REWARDS IN SHARE INVESTMENT

Both Risks and Rewards;Remember value can fall as well as rise. Risks are correlated with probability of returns.Different securities carries different risk - return profiles.

“Therefore invest with knowledge”.

LISTED COMPANIES

1. BBPL Bhutan Board Products Ltd.19932. BCCL Bhutan Carbide and Chemicals Ltd.19933. PCAL Penden Cement Authority Ltd.

19934. BFAL Bhutan Ferro Alloys Ltd.

19955. BTCL Bhutan Tourism Corporation Ltd.

19946. RICB Royal Insurance Corporation of Bhutan Ltd.

19937. BNB Bhutan National Bank Ltd.19968. DPCL Druk Petroleum Corporation Ltd.

19959. BDL Bhutan Dairy And Agro Products Ltd.

199410. DSML Druk Mining Ltd.199511. STCB State Trading Corporation of Bhutan Ltd.

199712. DSCL Druk Satair Corporation Ltd.

199813. BPCL Bhutan Polymers Co. Ltd.

199714. DPOP Druk Plaster and Chemicals Ltd.

200115. EBCC S.D Eastern Bhutan Coal Company Ltd.

200516. KCL Kuensel Corporation Ltd.

200717. BTL Bhutan Times Ltd.200818. DWAL Druk Wang Alloys Ltd.

200819. JMCL Jigme Mining Corporation Ltd.

200820. DFAL Druk Ferro Alloys Ltd.

200921. BIL Bhutan Insurance Ltd.

2009

NON-COMMERCIAL TRANSACTIONS

It is a change of ownership in shares without any monetary transactions like gifts and inheritance within the immediately family members;

This is done directly by the Exchange and instructs the companies and the brokers by the Exchange;

1. Original trade confirmation for endorsements;

2. CID copy of the transferee;3. Court affidavit verifying that the

transferor and the transferee are within the immediate family members; and

4. Transfer fee calculated at 1% of number of shares times the face value of shares.

DOCUMENTS REQUIRED FOR NON COMMERCIAL TRANSACTIONS:

For any further information or queries please contact us at: Royal Securities Exchange of Bhutan Ltd.Post Box # 742Thimphu

Fax # : 323849Phone #s :324296/323994/323995E-mail : rseb@druknet.btWebsite : www.rsebl.org.bt

KADINCHEY…………...