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Teaser for Foreign Investors 外国投资者的传单

Bank Asia Securities Limited 银行亚洲证券有限公司

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Contents

Chapters Particulars Page no.

Chapter 1 Profile of Bank Asia Securities Limited 银行亚洲证券有限公司简介 1

Chapter 2 Profile of Sponsor Group: Bank Asia Limited 赞助集团简介: 亚洲银行有限公司 2

Chapter 3 Directors Profile 董事简介 3-5

Chapter 4 Management Profile 管理档案 6

Chapter 5 Research Team Profile 研究团队简介 7

Chapter 6 Economic Review of Bangladesh 孟加拉国经济评论 8-10

Chapter 7 Why You Should Choose to Invest in Bangladesh? 为什么选择投资孟加拉？ 11-12

Chapter 8 Why should you invest in Bangladesh Capital Market? 为什么要投资孟加拉资本市场？ 13

Chapter 9 Present Capital Market of Bangladesh: Facts and Potentials 孟加拉国现有资本市场：事实与潜力 13

Chapter 10 Guidelines for Capital Market Investment in Bangladesh 孟加拉国资本市场投资指南 15-18

Chapter 11 Why Bank Asia Securities Limited? 为什么是亚洲证券有限公司 18

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Chapter 1: Profile of Bank Asia Securities Limited 银行亚洲证券有限公司简介

Bank Asia Securities Limited (BASL) is one of the leading full-service brokerage companies in Bangladesh.

The company was formed in 2009 and operating as a majority owned subsidiary of Bank Asia Limited,

one of the leading Banks in Bangladesh. BASL offers full-fledged standard brokerage services for retail,

institutional and foreign clients with a dedicated team of skilled professionals. The company is currently

providing the brokerage services under the membership of Dhaka Stock Exchange Limited (DSE).

Bank Asia Securities Limited (BASL) is fully dedicated to provide quality and disciplined services to its

local and foreign clients. BASL offers stock broking, depository services, online trading facilities, margin

loan facilities, panel brokerage services, trading through NITA for foreign investors & Non-Resident

Bangladeshi Citizens (NRB) along with specialized value-added services to meet the requirements of

retail and institutional investors both local and foreign clients.

BASL team comprises professionals from different area of capital market with strong academic

background. Each of the members is committed in leveraging their experiences to take BASL to greater

heights. Since we take our fiduciary obligations very seriously, we have established and adopted various

policies that we believe will set new benchmarks in the investment management and investment

banking arena of Bangladesh. Our Research Team believes in continuous improvement to discover profit

making opportunities at tolerance risk level with detailed research and analytical approaches. Our team

follows the economic trend, industry trend and individual companies so that we can identify the

profitable investment opportunity for our clients before other market participants can do.

Corporate Profile

Operation Start on August 05, 2009 Paid up Capital USD 24.39 mn

No. of Outlets 7 (Motijheel, Dhanmondi, Uttara, Mirpur, Jurain, Khulna, Modhumita) and 1 proposed outlet in Banani

Daily Average Turnover USD 3.05 mn Client Base Around 6,000

No. of Trading Terminal 39

Chapter 2: Profile of Sponsor Group: Bank Asia Limited 赞助集团简介: 亚洲银行有限公司

Bank Asia has been actively participating in the local money market, foreign currency market and as well

as capital market. Bank Asia is the pioneer in introducing Agent Banking successfully to serve large

numbers of un-banked rural people. Bank Asia Limited started its service with a vision to serve people

with modern and innovative banking products and services at affordable charge. And as part of the

bank's commitment to provide all modern and value-added banking service in keeping with the very

best standard in a globalized world.

Bank Asia limited, a 3rd Generation Commercial Bank established by renowned businessman and

dedicated experience Bankers with a vision to provide state of art banking service for mass people. They

have successfully acquired the business of 2(two) foreign Banks, The Muslim Commercial Bank, a former

Pakistani Bank and Scotia Bank, a Canadian Bank. Bank Asia has expanded its Branch network all over

Bangladesh and have foreign correspondent network all over the world including own Exchange House

abroad.

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Chapter 3: Directors Profile 董事简介

Mr. A Rouf Chowdhury

Chairman

Mr. Abdur Rouf Chowdhury is the current Chairman of the Board of Bank Asia Securities Limited and

Bank Asia Limited. He is a graduate in Business Management from the Massachusetts Institute of

Technology (MIT), USA. He has a wide range of experience in several industries including Automobile,

Telecom, Pharmaceuticals and Petroleum. He was the Resident Manager of two American

Pharmaceutical companies in Bangladesh. Being in the senior management position in Jamuna Oil

Company, he contributed for 15 years in the market development of petroleum products in Bangladesh.

Both Rangs and Sea Resources Groups comprised of 33 companies were formed under his dynamic

leadership. The huge success of the companies of the two groups during a short span of time is an ample

proof of his dynamic leadership and progressive mind. He also has a strong grip in the print media; he is

the Director of renowned English daily The Daily Star and Chairman.

Mr. Anisur Rahman Sinha

Director

Mr. Anisur Rahman Sinha, a renowned industrialist of Bangladesh, is a director of Bank Asia Securities

Limited. Mr. Anisur Rahman Sinha is the Chairman and Chief Executive Officer of Opex Group and Sinha

Textile Group. He is also the Chairman of Venture Energy Resources Limited, a Power Generation

Company implementing a 50 MW GE Frame-6 Gas Turbine Power Plant. He has also left his mark in the

agro industry with his Agro and Agro processing business, which has its own specialized cold storage

facilities and an integrated Poultry project. He is also the former Chairman of Bank Asia, a leading

commercial Bank in Bangladesh.

Mr. Anisur Rahman Sinha was appointed as the President of Bangladesh Garments Manufacturers and

Exporters Association two times. Born in 1947, Mr. Sinha received the National Export Trophy (Gold)

eight times as recognition of his immense contribution to export. He was also awarded the Business

Person of the year 2002 by DHL and The Daily Star.

Mrs. Romana Rouf Chowdhury Director

Mrs. Romana Rouf Chowdhury is one of the directors of Bank Asia Securities Limited. She has a wide

range of experiences at several industries including Automobile, Telecom, Real Estate, Pharmaceuticals,

Petroleum, IT and Steel etc. She holds the directorship in Rangs Ltd, Rangs Motors Ltd. Rangs Properties

Ltd, Rangs Pharmaceuticals Ltd, Rangs Workshop Ltd, Ranks IT Ltd, Ranks Telecom Ltd, Ranks Steel Ltd,

Ranks Petroleum Ltd, Sea Resources Group and Reliance Insurance Ltd. She obtained Bachelor’s Degree

from BRAC University.

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Mr. Md. Nazrul Huda

Director

Mr. Md Nazrul Huda is one of the directors of Bank Asia Bank Asia Securities Limited and Bank Asia

Limited. He is a former Deputy Governor of Central bank of Bank. He served the Bangladesh Bank

successfully for 35 years in different capacities. Mr. Huda obtained Masters in Economics from the

University of Dhaka, Bangladesh and University of New England, Australia. He has a number of

publications on important issues relating to economy and banking. He is currently the Country Head of

Habib Bank AG Zurich.

Mr. Md. Arfan Ali Director

Md. Arfan Ali is one of the directors of Bank Asia Bank Asia Securities Limited and Managing Director of

Bank Asia Limited. He as a career banker, an MBA from the IBA, Dhaka University, is having more than

25 (twenty five) years of diverse experience in banking profession to his credit. He started his career

with Arab Bangladesh Bank Limited as a Probationary Oficer in 1991. Later he joined Hanil Bank in 1996

and played key roles in setting up of its Dhaka Office. He joined Bank Asia in 1999 as Assistant Vice

President before it started its operation and played vital role at the preparatory stage of launching

formal operations of a newly established local bank.

Mr. Md. Arfan Ali pioneered and championed Agent Banking operations in Bangladesh. He had worked

as part time lecturer of Institute of Business Administration (IBA), Jahangirnagar University for 10 years.

He is also Chairperson of SWIFT Member and User Group of Bangladesh, member of “Academic Advisory

Board, School of Business”, Independent University (IUB), Bangladesh and current Advisor of Bangladesh

Money Market Dealers Association (BAMDA).

Mr. Dilwar H Choudhury Director

Dilwar H Choudhury, a US citizen, is one of the Independent Directors of Bank Asia Limited. He worked

in different type of financial organizations playing multi-dimensional role. As career banker, he worked

in eight different countries in Asia, Africa and Europe for 35 years in a multicultural situation. He worked

in The City Bank Limited as internal consultant in 2006 gradually moved to the position of Deputy

Managing Director and then to the Managing Director in-charge in 2009. He also worked in Bank of

Credit and Commerce International (BCCI) in UK, Turkey, Sudan and Africa region from 1982 to 1991. He

was a country Manager and CEO of Rupali Bank Limited, Pakistan operation from 1979 to 1982. He

worked as Banking consultant for KPMG Dhaka in Bangladesh, acquired skills on organization audit and

credit portfolio audit under World Bank Financial Sector Restructuring Program (FSRP). He also provided

various financial consultancy- Advisory job of Merger & Acquisition (M&A) of Muslim Commercial

Bangladesh operation with Bank Asia Limited. Dhaka, redefining & structuring the risk profile of National

Bank of Pakistan, Dhaka, portfolio audit of The City Bank Limited.

Mr. Choudhury received Bachelor of Arts from the University of Dhaka, Bangladesh in 1961. He obtained

Jackson Hewett’s “Tax Preparers’ certificate” USA. He also received FINRA and USA series 65 license to

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operate as investment advisor. He also took certificates on Investment Advisory and Accounting level-II

from NOVA Community College, USA.

Md. Sazzad Hossain Director

Md. Sazzad Hossain is one of the directors of Bank Asia Securities Limited. He is about 28 years

experienced banker, currently working as Senior Executive Vice President & Head of ICCD at Bank Asia

Limited. He has completed M. Com major in Finance & Banking from University of Dhaka. He started his

career at Pubali Bank Ltd as Probationary Officer. Later he worked at NCC Bank Ltd, Eastern Bank Ltd at

various positions.

Mohammad Ibrahim Khalil FCA Director

Mohammad Ibrahim Khalil is one of the directors of Bank Asia Securities Limited and Chief Financial

Officer of Bank Asia Limited. He is a Fellow Chartered Accountant and Banker having 10 (ten) years

banking experience and 3 (three) years Professional Accountancy firm. He completed his Masters in

Accounting and Chartered Accountant degree from Institute of Chartered Accountant of Bangladesh

(ICAB).

He started his career with ACNABIN, Chartered Accountants (independent member of Baker Tilly

International and Former member firm of Arthur Andersen) in 2005. Later he joined in AB Bank Limited

as Senior Principal Officer in 2008. In 2012, he joined in Bank Asia Limited as First Vice President and

Head of Accounts. At present, he is working as Chief Financial Officer and Vice President of the Bank.

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Chapter 4: Management Profile 管理档案

Mr. Sumon Das Chief Executive Officer & Vice President

Mr. Sumon Das is the Chief Executive Officer and Vice President of Bank Asia Securities Limited since

2009. He has more than twenty-one years of working experience in Capital Market on Bangladesh

operations successfully. Previously he worked with City Bank Limited since 2007 as Vice President and

played vital role at the elementary stage of launching formal operations of a Brokerage House and

Merchant Banking Unit of the Bank. He also worked in Central Depository Bangladesh Ltd and

Chittagong Stock Exchange Limited (CSE) for several years at different position. Mr. Das obtained Master

in Commerce (Finance & Banking) from Dhaka University, Dhaka.

Md. Anisul Alam Sarker Assistant Vice President & Head of Operation

Md. Anisul Alam Sarker joined Bank Asia on June 03, 2009. He is currently working as Assistant Vice

president & Head of Operation, Company Secretary & Chief Anti Money Laundering Compliance Officer.

He has over 18 years of extensive experience in different areas of Banking & Capital Market. Before

joining this company, he served NCC Bank for 10 years. During his long tenure with Banking & Capital

Market he has gathered practical experience in all areas of Branch Banking, Share issues, Trading,

Company Law, CDBL Rules, Securities & Exchange Rules &Ordinance, Rules & Regulations. He obtained

his MBA in Finance & Banking from the International Islamic University, Chittagong. Mr. Sarker attended

a good number of trainings, workshop, seminar at BIBM, DSE, Bangladesh Bank and different training

Institutes of Bangladesh.

Md. Nahid Raza Head of Finance & Accounts

Mr. Nahid is working as the Head of Finance & Accounts of Bank Asia Securities Limited since 2014 to till.

In addition, he is an Income Tax Practitioner. He started his career with AB Bank Limited in 2009 as an

Officer (Trainee). After joining AB Bank Limited, He completed his Banking Diploma and become a

Diplomaed Associate of the Institute of Bankers, Bangladesh. He also completed his MBA in Finance &

Banking from Jahangirnagar University. He joined BD Finance Capital Holdings Limited in 2013 as Head

of Settlement Department. He was the founder member of BD Finance Capital Holdings Limited a full-

fledged Merchant Bank. In the meantime, he acquired Post Graduate Diploma in Financial Management

from Bangladesh Institute of Management (BIM) in 2014. He is also enrolled in Chartered Financial

Analyst (CFA) at Level one.

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Chapter 5: Research Team Profile 研究团队简介

Shariful Alam Choudhury Head of Research and Investment

Shariful Alam Chowdhury is the Head of Research and Investment at Bank Asia Securities Limited (BASL).

He is an equity analyst with more than five years of involvement and has ten years of total capital

market experience. He joined BASL in April, 2014. He holds in depth knowledge of the capital market

and also worked extensively in product designing and development.

He worked as ‘Head of Investment and Compliance’ at BD Finance Capital Holdings Limited. Prior to that,

he worked as ‘Senior Executive’ at investment Banking Division of AB Bank Limited. Mr. Shariful Alam

Chowdhury perusing ‘Master of Professional Finance’ from University of Dhaka and also a member of

Chartered Financial Analyst (CFA), Virginia, USA.

Shohidul Islam Senior Research Analyst

Mr. Shohidul, an MBA from University of Dhaka, joined Bank Asia Securities Limited in 2017 as Senior

Research Analyst. He has more than five years of working experience in capital market of Bangladesh.

He has adequate experiences in buy and sell side equity research, active portfolio management, issue

management, and corporate advisory services. He started his career in Alif Assets Management Limited

as Investment Analyst. He also worked in International Leasing Capital Limited(ILCL) and National Asset

Management.

Mr. Islam has excellent knowledge in money market, capital market, investment banking, investment

management, corporate advisory, fundamental and technical analysis, stock valuation and securities

analysis. He also completed BBA in Finance from University of Dhaka.

Md Monirul Islam Junior Research Analyst

Mr. Md. Monirul Islam completed bachelor’s in Finance & Accounting from North South University. He

had an International Diploma in Computer Science, NCC UK. He started working at Research Department

Bank Asia Securities Ltd since October, 2015. Currently, he is engaged in various research publication. In

addition, he collects company’s fundamental and technical information for further analysis. He went

through few training programs in Bangladesh Institute of Management (BIM) in 2016.

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Chapter 6: Economic Review of Bangladesh 孟加拉国经济评论

Bangladesh is persistently showing a healthy macroeconomic performance with a strong GDP growth,

robust foreign exchange reserves and all others economic indicators for the last few years. According to

the International Monetary Fund (IMF) and Asian Development Bank (ADB) Bangladesh's economy

would grow by 6.9 percent for the fiscal year FY’17. And according to World Bank, this estimate was 6.9

percent. However, the government's target 7.2 percent GDP growth for the current fiscal year. The

actual growth was 7.24% that outperformed the targeted GDP growth as well as forecast of ADB and

IMF despite the lack luster performance in remittance and export.

Source: Bangladesh Bank & BASL Research

Although global economic growth remained subdued in FY’17 following a slowdown in the US and

Britain's vote to leave the European Union. However, it is expected that the economy of Bangladesh is

heading towards over 7 percent growth in next fiscal years. In recent time, it ranks as middle-income

country. GDP Growth has steadily accelerated to more than 7 percent, driven by the classic cheap-

labour starter industry of textiles. Bangladesh is now the world’s second-largest garment exporter.

Bangladesh has huge potential to become the world's 23rd largest economy by 2050, overtaking

countries such as Netherlands, Australia, Spain, Thailand and Malaysia, according to

PricewaterhouseCoopers (PWC). The economy also advanced from better weather conditions allowing

recovery in the agricultural sector. Besides, the traditional manufacturing sector continued to expand at

a double-digit rate. However, structural weaknesses might continue to put a dimple in growth prospects

and sustainability.

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Key Economic Indicators

Broad money

Broad money(M2) and private sector credit

growth continued to slow down in FY2017.

However, the M2 recorded an increase of USD

125,441.5 mn or 10.9 percent at the end of

FY2017 against the increase of USD 113,133.1 mn

or 16.3 percent at the end of FY2016. Source: Bangladesh Bank & BASL Research

Reserve Money

Reserve money recorded an increase of USD

33,407 crore or 10.8 percent at the end of FY2017

against the increase of USD 30,138 crore or 20.40

percent at the end of FY2016. The amount is good

enough to clear import bills for the next nine

months, going by an estimated monthly

requirement of $3.5 billion. Source: Bangladesh Bank & BASL Research

Inflation

Point to point inflation went up to 5.94 percent at

the end of FY2017 from 5.53 percent in FY2016.

But the Point to point inflation rate went down to

the current level from 8.05%. Whereas The

twelve-month average general inflation pushed

down to 5.44 percent in FY2017 from 6.78 percent

of FY2013. The inflation rate is decreasing over

last five years but the food inflation & Non-food

inflation went up during H2, FY’17 starting from

January 2017 because larger scale food

component was on uptrend caused largely by flash

flood-related crop loss in the Northeastern haor

regions in H 2 GY17. Source: Bangladesh Bank & BASL Research

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Investment

The gross investment as percentage of GDP in

public sector increased to 7.3 in FY2017 from 6.6

percent in FY2013. The private sector investment

as percentage of GDP has also increased to 23

percent in FY2017 from 21.7 percent in FY2013.

Source: Bangladesh Bank & BASL Research

FDI Inflow and Portfolio Investment

The FDI Inflow in Bangladesh is fluctuation for last

five years with a significant value. Portfolio

investment is also fluctuating over the years.

However, there is high chance of increasing FDI in

Bangladesh as the Govt. will be allowing foreign

direct investment (FDI) in the readymade garment

sector in special economic zones (SEZ) and high-

end fashion items in Bangladesh. The government

has already allocated an SEZ for Japanese investors

in Bangladesh. Bangladesh has the potential to

attract US$ 5.0 billion in foreign Source: Bangladesh Bank & BASL Research

direct investment (FDI) a year, according to some studies. The country could have become one of the

fastest growing FDI-recipient countries in South Asia if the govt. had undertaken investment-friendly

policies and made all necessary facilities available. Bangladesh Export Processing Zones Authority

(BEPZA) saw the highest-ever annual actual investments despite the global economic meltdown and the

euro zone crisis. It achieved 8.31 per cent growth in actual investments over the same period a year ago.

The statistics showed a massive 85 per cent growth in investment proposals during the year. Garment,

fabric, footwear, jewelry items and barbed-ware manufacturing companies are among the aspirant

entrepreneurs.

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Chapter 7: Why You Should Choose to Invest in Bangladesh? 为什么选择投资孟加拉？

Bangladesh is considered as one of the leading emerging country with enormous growth potentials to

become the future leader in the global economy. Its favorable investment environment has been

praised many leading organization around the world. Some of the observations are as follows:

▪ Bangladesh is listed in Goldman Sachs’ “Next 11’ and JP Morgans’ ‘Frontier Five’.

▪ Standard and Poor and Moody’s have rated higher place than that of most of the countries of South Asia.

▪ The Guardian, an influential daily in UK, has recently placed Bangladesh in eleven countries’ list often called as “New Wave Countries”.

The country's strengths include: macroeconomic stability; open and diversified economy; abundant

cheap labor; strategic location as a gateway to the countries of the Asia-Pacific region; a legislative

framework favorable to business. The Bangladesh government is actively seeking to attract foreign

investment, particularly in the areas of energy and infrastructure.

Country Comparison for the Protection of Investors

Facts Bangladesh South Asia United States Germany

Index of Transaction

Transparency*

6.0 5.0 7.0 5.0

Index of Manager’s

Responsibility**

7.0 5.0 9.0 5.0

Index of Shareholders’

Power***

4.0 6.0 4.0 8.0

Index of Investor

Protection****

5.7 5.3 6.5 6.0

Source: Doing Business & BASL Research Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is

personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the

Higher the Level of Investor Protection.

Investors in the developed countries are now looking for opportunities in Asia and emerging markets for

growth, succeeding the global financial meltdown. Bangladesh can take this opportunity by showing a

steady growth rate. The country can become a transport and connectivity hub in South Asia. It has the

potential to grow fast, but it lacks the domestic resources and investment needed to solve the power

and energy deficit and infrastructural bottlenecks. The bottlenecks will be reducing byt the govt. Well

measures and initiatives in coming future.

According to some investment experts, political unrest, infrastructures and power crisis are not the

problems for investment in Bangladesh. The problem lies with obtaining land. Investors now only look

for land as they are capable to set up rest of the infrastructure on their own initiatives. Many Chinese

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investors now want to relocate their factories to Bangladesh due to soaring labor cost in their

homeland. Bangladesh's edge in labor-intensive industries appeals to China as it shifts to technology-

intensive industries. Working with $400 a month only in the recent past, Chinese workers are now three

times more expensive than their Indonesian counterparts and five times as costly as in Vietnam while

Bangladeshi workers are content with around $35 a month only. The country can cash in on these

opportunities. Competing with other Asian countries, such as Indonesia, Vietnam, and Malaysia.

Bangladesh Government has already taken incentives and vigorous efforts through BEPZA encouraging

the investors to make investments in the EPZs. The cheap, highly productive and trained workforce has

also prompted the foreign investors to reassess their investment strategies and plan for relocating their

investments to Bangladesh.

There is no denying that increased FDI flow depends on sustained growth of a country. Bangladesh's

annual GDP (gross domestic product) growth ratio is not enough. If growth rate rises to an average 8.0

per cent and the literacy rate increases to 65 per cent, FDI flow will be much higher than expected.

Moody's good rating of Bangladesh also reflects the country's relentless efforts to maintain

macroeconomic stability. Such rating creates confidence and helps a country get access to low-cost

capital for development.

Bangladesh is going to surpass the middle-income status, and is already garnering attention from the

World community. World Bank has identified Bangladesh as an economic success. Regional economies

are giving the vote of confidence by channeling investments within the country. As Bangladesh stands at

this crucial juncture, it is imperative that the country gets its house in order by improving overall

business climate.

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Chapter 8: Why should you invest in Bangladesh Capital Market? 为什么要投资孟加拉资本市场？

• Bangladesh provides a very friendly and open investment atmosphere for foreign investors.

• 100% repatriation of capital, dividend and investment profits.

• “Long established legislative and legal framework protects foreign investment in Bangladesh” – Bangladesh Primer, Market Introduction by Deutsche Bank

• Reinvestment of repatriable dividend treated as new investment.

• No tax on capital gains.

• World Bank Investor Protection Ranking for Bangladesh 19th, Pakistan 25th, India 38th & Sri Lanka 70th.

• Bangladesh was considered as one of the Goldman Sachs Next 11 countries for a high potential of becoming the world’s largest economies in the 21st century along with the BRICs (Brazil, Russia, India and China).

• JP Morgans’ has also included Bangladesh in the ‘Frontier Five’ list.

• Standard and Poor and Moody’s have rated higher place than that of most of the countries of South Asia.

• The Guardian, an influential daily in UK, has recently placed Bangladesh in eleven countries’ list often called as “New Wave Countries”.

• Easy access to ownership of Infrastructure Development companies, high net worth private banks and companies through Capital Market.

Chapter 9: Present Capital Market of Bangladesh: Facts and Potentials 孟加拉国现有资本市场：事实与潜力 Stock market rise is always reflected as a good sign for the investors group and the economy of a

country. It is well believed that a vibrant stock market delivers healthy sources of capital required by

companies for productive investment opportunities and expansion of business at will lead a country's

economy forward in the long run. Capital market of Bangladesh has got some momentum in the first

three months of 2017 experienced a rising inflow of liquidity with bullish movement.

Source: Dhaka Stock Exchange Ltd & BASL Research

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Since the starting of 2016, an expansionary monetary policy has been set up to match up the targeted

GDP growth rate. The growth rate of the broad monetary aggregate (M2) rose from 12.4 per cent in

2015 to 16.3 per cent in FY2016. In the monetary policy for H1 (Jul-Dec) and H2 (Jan-Jun), the growth

rate of M2 was projected to be 14.8% for December, 2016 and 15.3% for June, 2017 respectively. As a

result, excess liquidity was present in the financial system. Due to the fact Banks and financial

institutions facing excess liquidity have persistently reduced both lending and deposit rates. The rate of

interest on both savings and lending has been cut down to single digit in the recent past. Apparently,

during December 2016, the weighted average lending rate has come down to 9.94% in Dec'16, while the

weighted average deposit rate was 5.29% Nov'16. Therefore, following this low rate of return of term

deposits and other government savings instruments will not only discourage savings of people but also

impulse a handsome number of savers to search for alternative investment opportunities where stock

market investment may be one of the good substitute. This rational behavior will cause fresh liquidity to

be surging into stock market. Therefore, this intense move on country's interest rate policy will

definitely cause great swing from money market to capital market.

Secondly, interest rates decline increases the demand of private sector credit. This will move faster business expansion for both borrowing and lending firms. The extent of debt financing in the capital structure of a firm will therefore increase. Business activities will expand and so profitability of firms will improve. As the decrease in net borrowing costs will produce a rapidly rising return on equity. In other words, earnings per share (EPS) of a levered firm will rise faster than an equity firm. Thirdly, excess liquidity in banks and financial institutions will move ways to inject, directly and indirectly, a part of their funds into capital market. This also implies shifting demand for good stocks in the market. Fourthly, under the circumstances, foreign portfolio investors will welcome this opportunity to make handsome gains. As the Taka-dollar exchange rate is almost fixed, they will bring in new liquidity into the markets for short-term gains. Net foreign investment in the capital market was more than doubled year-on-year in the third quarter (January-March) of this fiscal year (FY17). Besides, many overseas investors considered the Bangladesh stock market as a frontier and emerging market and invested more funds there. So, more and more foreign investors will be interested to invest in the stock market of Bangladesh in near future. Finally, the stock market regulator initiates different stock market development activities such as

Financial Literacy program, Development Fair. The Govt. is also very positive about the market. In the

National Budget for FY18, the Govt. declared various incentives for capital market development such as

Tax Exemption for Bangladesh Securities & Exchange Commission, Tax Exemption on Alternative

Investment Funds, Branches, liaisons and subsidiaries are allowed to maintain financial year in line with

their parent companies. The government has also allocated USD .12 mn for the development of capital

market.

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Chapter 10: Guidelines for Capital Market Investment in Bangladesh 孟加拉国资本市场投资指南

Bangladesh Capital Market

• Bangladesh Capital Market consists of the Dhaka Stock Exchange (DSE) & the Chittagong Stock Exchange which were incorporated in 1954 & 1995 respectively.

• The both stock exchanges are demutualized as per The Exchange Demutualization Act 2013.

• Total Market capitalization is USD 50.13 billion.

• Both are members of South ASIAN Federation of Exchanges (SAFE), a forum in South Asia to promote the development of securities markets in the region.

• DSE has achieved full membership of the WFE.

• Bangladesh Securities & Exchange Commission (BSEC) supervises activities of the bourses and its members.

• International Organization of Securities Commissions upgraded Bangladesh Securities and Exchange Commission (BSEC) to A-category from existing B-category in 2013.

• Automated trading facilities available at both bourses since 1998.

• The Central Depository Bangladesh Limited (CDBL) is responsible for safekeeping of all instruments in electronic form.

• Market Intermediaries include 250 members of DSE, 148 members of CSE, 58 Full-fledged Merchant Banks, 29 Asset Management Companies and 13 Custodians.

How to start?

• Open NITA Account with AD (Authorized Dealer) of foreign currency department of any financial institution or through any custodians.

• Select Custodian in Bangladesh (HSBC Limited, SCB Limited, Dhaka Bank Limited, South East Bank Limited, AB Bank Limited and Citi NA).

• Open BO through custodian.

• Open Trading Account with preferred broker (optional as the custodian will provide the service through holding cash account (NITA) on behalf of the Investors)

• Start Trading

Source: Dhaka Stock Exchange Ltd & BASL Research

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The Foreign Investor may take any of the possible routes outlined above to link to the local broker and custodian. Putting in more intermediaries increases cost but may provide more safety and/or single point communication for the Foreign Investor.

Source: Dhaka Stock Exchange Ltd & BASL Research

For Buy Order

Source: Dhaka Stock Exchange Ltd & BASL Research

For Sale Order

Source: Dhaka Stock Exchange Ltd & BASL Research

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What is a NITA Account?

• Non-resident Investment Taka Account (NITA) is an account for channeling foreign currency in as well as repatriation of earnings from investment

• All earnings from investments (e.g. Cash Dividends) are credited to the NITA account

• An audited statement, certifying that all proper taxes are already withheld from the earnings – usually taken care of by the custodian, for fund repatriation purpose

What is a BO account?

• BO account stands for Beneficiary Owners account.

• BO account holds shares purchased or shares credited due to corporate declarations.

What are the requirements for opening BO accounts?

For Individuals

• Photographs - duly attested.

• Bank Statements.

• Copy of pay slip or tax return (optional as a part of KYC [Know your Customer]).

• Copy of employment certificate or trade license (license to operate business at individual or proprietorship level).

• Copy of Passport.

• Photographs of Nominee (beneficiary is case anything should happen to investor) and other details

• Filled other relevant forms

• Any other requirements by the custodian

For Institutional

• Copies of Memorandum and Article of Association.

• Certificate of Incorporation.

• Copy of Board resolution permitting investment / trade in Bangladesh.

• Custodian details.

• Copy of Board resolution regarding authorized personal to handle the account and all relevant identification documents as well as specimen signature.

What are the common services provided by local Custodians?

• Trading: Custodian ↔ Broker: Custodian usually receives orders via SWIFT or any other acceptable standard.

• Custodian carries out share and monetary transactions with the local broker:

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o DVP (Delivery versus Payment): Delivers shares from Financial Institution’s specified BO to Brokers BO upon Receiving Payment only.

o DVP is applicable for sale orders RVP (Receive versus Payment): Receives shares to Financial Institution’s BO account of any other Omnibus BO as specified by Financial Institution and makes payment. RVP is applicable for buy orders.

• For DVP the broker sends sale confirmation to Financial Institution which in turn is communicated by Financial Institution to custodian. Then Broker confirms payment amount and quantity of shares involved with custodian. Then broker pays the custodian to receive the shares.

• For RVP the broker sends buy confirmation to FI which in turn is communicated by Financial Institution to custodian. Then Broker confirms amount and quantity of shares involved with custodian for the transaction. After settlement with the Exchange (after prevailing settlement periods) the broker delivers the shares to the custodian to receive payment for the shares.

• FI send buy/sale order notice to custodian and broker separately either directly or through fund manager/global custodian /international broker.

• After execution of order the broker communicates with custodian to match the order.

• Once the orders are matched the settlement between broker and custodian takes place.

Chapter 11: Why Bank Asia Securities Limited? 为什么是亚洲证券有限公司

Being your trusted Capital Market service provider, you can avail the following services from Bank Asia Securities Limited:

▪ Support in opening NITA & FC Account.

▪ Support in opening Custodian Account.

▪ BO Account opening.

▪ Full-fledged international standard RM based brokerage services for individual & institutional investors.

▪ Best trade execution through professional licensed trading representative.

▪ Advanced research service dedicated to the valued clients.

▪ Research ant Trading support through Bloomberg Terminal.

▪ State of Arts Stock Trading facilities at attractive commission.

▪ Personalized services with confidentiality, E-mail services, BEFTN.

▪ On line trading.

▪ Block trading facility for prospective buyers and sellers.

Contact Information

There is a designated team for stock trading services to Foreign Investors in Bank Asia Securities Limited. For any further query please contact Mr. Sumon Das, Chief Executive Officer. Please call at +8801993111666, +880 02 9515826, Ext:101 at Business hour. or write to us at info@basl-bd.com . You can also visit our web terminal at www.basl-bd.com.

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Disclaimer

This document has been prepared by Bank Asia Securities ltd (BASL) based on publicly available data for information purpose only and does not solicit any action based on the material contained herein and should not be construed as an offer or solicitation to buy or sell or subscribe to any security. Neither BASL nor any of its directors, shareholders, member of the management or employee represents or warrants expressly or impliedly that the information or data of the sources used in the documents are genuine, accurate, complete, authentic and correct. However, all reasonable care has been taken to ensure the accuracy of the contents of this document. BASL or Research & Development Department will not take any responsibility for any decisions made based on the information herein. As this document has been made for the Traders of BASL and strongly prohibited for circulation to any clients, investors or any other persons from outside of BASL.

About Bank Asia Securities (BASL)

Bank Asia Securities Limited (BASL) is one of the leading full-service brokerage companies in Bangladesh. The company was formed in 2009 and running its operation as a majority owned subsidiary of Bank Asia Limited. BASL offers full-fledged standard brokerage services for retail, institutional and foreign clients with a dedicated team of skilled professionals. The company is currently providing the brokerage services under the membership of Dhaka Stock Exchange Limited (DSE).

BASL Research Team

Mr. Shariful Alam Chowdhury

Senior Executive Officer

tushar@basl-bd.com, tusharbd@bloomberg.net

Mr. Shohidul Islam

Senior Officer

shohidul@basl-bd.com, shohidulbd@bloomberg.net

BASL Corporate Office & Branches