Historical Background Of Dhaka Stock Exchange (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 government’s proposal regarding the karachi Stock Exchange opening a branch at Dhaka. , did not find favor 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 par chase 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. 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 or diagram & 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."
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 stood 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 with only a few members attending the trading session for mere 2 hours a day from 3 p.m. to 5 p.m. 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 present location in 1959. Subsequently the name of the exchange was changed to the Dhaka Stock Exchange Limited in 1964.The activities of DSE remained entirely depended on that of the Karachi Stock Exchange.
A dual number of dual listings existed in the two exchanges but DSE mainly concentrated on Jute Companies & trading of bonus vouchers. The transactions had increased from 5000 to 30000 hawlas a day in DSE where it was hundreds in Narayangonj. The orders that could not executed in DSE were executed in Karachi Stock Exchange over telephone. Such condition continued till the birth of Bangladesh in 1971. The trading was suspended during the liberation war and resumed in 1976 with only 9 companies listed having a paid up capital of Tk. 137.52 million on the Stock Exchange.
Since then the bourse did not look back and continued its journey contributing its journey contributing to the development activities of the nation. DSE index was introduced in September 1986 starting at 225.84. On August 10, 1998 the DSE introduced screen-based state-of-the-art automated online real-time trading through Local Area Network (LAN) and Wide Area Network (WAN). DSE upgraded its automated trading system on August 21, 2005. After that, brokers of
DSE have been conducting trading of securities from Chittagong, Sylhet, Rajshahi, Comilla, Narayanganj, and Uttara. Within very much short time trading of securities will start in different divisional and district level cities. The Dhaka Stock Exchange became a full Depository Participant (DP) of CDBL to facilitate the trading of its non-DP members. Government Bonds made a debut on the DSE on 1st January, 2005. In its 50-year journey the Stock Exchange has made significant contribution to the economy of Bangladesh providing the unique venue to raise investment from the members of the public. Through continuous changes from its beginning Dhaka Stock Exchange has emerged as a modern exchange.