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What is Share market?

A stock market is a public market for the trading of company stock
... and derivatives at an agreed price; these’re securities listed on a
stock exchange.There are two ways for investors to get shares from the primary and
secondary markets. In primary markets, securities are bought by way
of public issue directly from the company. In Secondary market share
are traded between two investors

►►AGM:

Annual General Meeting held once a year where the directors of the company report to the shareholders on the year’s performance and declare dividend.

►►Book Closure/Record Date:

While a company a dividend, right/ bonus shares or intends to hold any AGM/ EGM; it declares a book legislature closer provider/ Record Date to register the name of shareholders.Only shareholders whose names appear on the register after the book closure/ Record Date are eligible to attend in the AGM/ EGM and also to receive dividends & bonus shares and entitlement to right shares, if any

►►Block Trade:

A fixed amount of share tradable under Block market. Block transaction not include in DSE trade . Usually directors/sponsors Buy/Sell in Block market

►►Bond:

Kind of security Bond with fixed rate of return in every year.Some bond are tradable in DSE, and there is convertible Bond nd some Treasury Bond listed in DSE.treasury bond is listed in DSE nd tradeble but ppl dnt like to invest in bond only institutional buyers buy this kind of bond.

►►Bull/Bear Market:

Bull market - A continuous strong uptrend market for buy pressure is call Bull market. This strong uptrend compares with bull the sign of power.

Bear market- Prolonged period of falling share prices, dominated by selling pressure in the marketplace, brought about by BEARS, or adverse economic or political factors, e.g. a change in the industrial policy of the government, imposition of price control, drought or flood, free imports, etc., or a change in the government, income tax raids, etc.

Category:

There are 5 categories in DSE. A, B, N, Z and G category

A category - Companies which are regular in holding the current annual general meetings and have declared dividend at the rate of 10% or more in the last English calendar ye... ar trade under A category. Settlement time is 3 trading days.

B category - Companies which are regular in holding the annual general meetings but have failed to declare dividend at least at the rate of 10% in the last English calendar year but should give 5% trade under B category. Settlement time is 3 trading days.

N category - Newly listed companies trade under this category. After AGM N category Change its category based on dividend. Settlement time is 3 trading days.

Z category - Companies which failed to hold the current annual general meetings or have failed to declare any dividend or which are not in operation for more than six months or whose accumulated loss after adjustment of revenue reserve, if any, is negative and exceeded its paid-up capital trade under Z category. Settlement time is 10 trading days.

G category - newly listed company yet to go in production trade under this category and B category settlement is applicable for this category.

►►Capital Gain:

Profit of selling share is Capital Gain. Usually companies don’t distribute Capital gain to share holders.

►►Capital Reserves:

Undistributed Profit of Company is called Capita Reserve. After revaluation and year closing company... add undistributed income in reserve. Good reserves show the depth of company. Normally company keep 30% profit in reserve but there is no such rule about it in DSE.

►►Circuit Breaker:

Circuit Breaker is the maximum permissible deviation of the price (specified as percentage) of the incoming order from the Circuit Breaker Base Price for that instrument. Orders violating circuit breaker will result rejection of the order.

Up to 200 taka______ 20% but nor more than 35 taka

201---500___________ 17.5% but not more than 75 taka.

501--1000___________ 15% but not more than125 taka

1001--2000__________ 12.5% but not more than200 taka

2001...5000_________ 10% but not more than375 taka

above 5001 taka_____ 7.5% but not more than 600 taka

►►Dividend:

In simple word it means profit given by a company to the respective share holders. There are two types of dividends:

*CASH DIVIDEND:

Dividend offered by the company in cash form. e.g X company has declared 20% cash in this year. This means that if you have 1,000 shares of that X company, face value of each share is 10tk, then total price of 1,000 shares is 10,000tk, 20% of 10,000tk is 2000tk. It is noticeable that cash dividend is given on the face value of shares, not on the current market price of that shares.

*STOCK DIVIDEND:

Dividend offered by a company in the form of bonus shares. Suppose you have 1000 numbers of shares of Y company, company has given 30% bonus share or stock dividend, then after record date you will found 30% of 1000 shares=300 more shares free of cost

►►Dividend Yield:

Return rate of dividend. suppose X company’s face value 10 MP 20 declare 15% cash that means 1.5 tk. so market price is 20 tk dividend 1.5 tk. so 1.5/0.2= 7.5 so dividend yield is 7.5 .

►►EPS (Earning per share):

Basic theory to find eps is Net profit after tax/total share = EPS

There are 2 types of EPS:

Basic EPS – W /O considering recent declared Stock dividend or Right share.

Diluted EPS - considering recent declared Stock ... dividend or Right

►►EGM (Extra Ordinary General meeting):

Any general meeting other than the ANNUAL GENERAL MEETING, called to obtain shareholders’ consent to under decisions, such as Split, right etc.

►►Face Value:

The price of each share stated by the company at IPO is Face Value. All cash dividends are paid on the basis of face value. Suppose face value of a share is 100tk but its current market price is 300tk. Now if a company have declared 20% cash dividend then you will get 20% of it's face value (20% of 100tk=20tk) not 20% of it's current market price

►►IPO(Initial Public Offering):

New shares offered to the public in the PRIMARY MARKET.

►►Lock-In Shares:

Which cannot yet be sold because the condition of offer stipulates that the share be held by the allotted for a minimum period.

►►Market C... apitalization:

Market Capitalization is the total market value, at the current stock exchange list price of the total number of equity shares issued by a company.

Market Capitalization = ∑ (No. of Issued Share * Close Price)

►►Market Lot:

A Market Lot is the smallest tradable unit for an instrument except those traded in the Odd lot book. All order quantities can only be an integral multiple of the Market lot.

►►NAV (Net Asset Value):

Which is the value of total assets less liabilities on the date of valuation. It represents the net worth of the company.

►►NPR (NAV per ratio):

Market price/NAV= NPR. 1-2 NRP is good to their holdings, as a matter of their right to receive preferential treatment.

►►Odd Lot:

Stock market shares are generally bought and sold in market lots, which are easy to trade. Any number of shares less than the market lot makes an odd lot. Odd lots typically arise from bonus or rights issues.

►►Overheated Market:

A stock situation in which too much money is chasing too few shares, leading to sharp price rises, and frequent GAPs.

►►Overvalued Shares:

Shares which have caught the investors’ fancy, and who therefore are willing to pay... a price for them which is not justified by their EPS (earning per share) or P/E ratio.

►►Paid-up Capital:

Capital acquired by selling shares to investors, as distinguished from capital accumulated from earnings or from secured or unsecured loans.

►►Panic Sell:

A condition of the stock market in which not only inexperienced investors, but also sturdy bulls, take fright and start selling is called panic sell. It may be caused by sudden unfavorable news or rumor, or a RANDOM WALK by share downwards, or simply, in bear market conditions, the absence of financial institutions from the market.

►►P/E Ratio:

The P/E ratio (price-to-earnings ratio) of a stock is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower P/E ratio. The P/E ratio has units of years, which can be interpreted as "number of years of earnings to pay back purchase price",





►►Preference Share:

o called because these have preference over equity shares in the matter of distribution of post – tax profit, and have a prior claim on the assets of the company in the event of liquidation. In terms of risk, these are le... ss risky then equities, but more risky than secured debentures which precede them in the distribution of the company’s funds, and in the event of liquidation, which are paid off before preference shares. Preference shares are entitled to a fixed dividend, and cumulative preference share retain their retrospective claim on dividend when the company is not in a position to declare any dividend.



►►Private Placement:

Shares can be sold to institutional investors on a private placement basis. When they are offered to a favored few, they are usually restricted shares, and cannot be sold in the marketplace for some specified time.



►►Right Issue:

Issue of shares at par or at a premium by an existing company to its shareholders in a certain proportion (and additional shares, if available.