Internship Report On Evolvement of Margin Rules, 1999 in Bangladesh capital market and Its impact on DSE Index
Capital market ensures economic development of a country since it serves as the channel of funds from savers to borrowers. The capital market of Bangladesh is in growing form. Index represents the overall performance of the capital market. As this report has been prepared based on the topic “Evolvement of Margin Rules, 1999 in Bangladesh capital market & its impact on DSE Index”, analysis on the origination of margin rules, directives as well as effects of those directives are revealed throughout the report.
This internship report consists of five chapters. First chapter has been prepared to describe origin, scope, methodology and limitation of the report. Second chapter has been organized with an introduction of Bangladesh capital market & establishment of SEC.
Third chapter is prepared emphasizing on the historical background of introducing Margin rules in Bangladesh capital market in 1999. The present scenario of Margin Rules including all the directives till January, 2011 is also provided in this chapter.
Analysis of chapter four has discovered the impact of margin rules & directives on the market index. Fifteen directives were published during sixteen months-from October, 2009 to January, 2011.This sixteen months has been considered as post directive period. For the convenience of analysis January, 2009 to September, 2009-these nine months were considered as pre directive period. Analysis has exposed that average DGEN growth in pre directive period was 1.9% and in post directive period was 6.389%. In spite of this fact the study also revealed that fluctuation of indices continued over the post directive period. Indices had to face downturn for average 20%-40% days of total trading days during the sixteen months. However, it has been evident from the trends of DSE indices that Margin Rules & directives had a mixed impact on market indices.
Chapter five is the last and final episode of the report to describe the findings of the report in short. The report is concluded stating the fact that directives relating to margin loan play important role in stabilizing and disciplining the market as well as ensure better market index.