Submitted by:

Shovon Mustary

i

Stock Quotations Provided by

Dhaka Stock Exchange

Acknowledgement

First of all I express my gratitude from heart to the Beneficent, the Merciful & Almighty

Allah for giving the strength and patience to prepare this report within the programmed

time.

I am deeply indebted to my course teacher for his co-operation and precious contribution

in preparing the report. It gave me the opportunity to draw out “Stock Quotations

Provided by Dhaka Stock Exchange”.

An individual can achieve no noble achievement by his/her alone trial. I am indebted to a

number of persons for their kind suggestions, direction and co-operation.

I have taken help from internet and various books. I am thankful to those authors for the

help I have gathered from their resourceful work.

ii

Letter of Transmittal

2nd July, 2015

Mr. XSubject: Submission of Report

Dear Sir:

It is an immense pleasure for me to submit the report on “Stock Quotations Provided by Dhaka Stock Exchange”. The experience that I gathered through this study will help me in our career indeed. It was an opportunity of rediscovering our potentials. It was of excitements too.

I would like to convey special thanks and gratitude to you for patronizing my effort and for giving proper guidance and valuable advice. I have tried my best to cover all the relevant fields. I have tried my best to make this report a fault free one and hope that you will take any unintentional mistake with kind consideration.

I thank you and look forward to receiving your cordial approval of our submission.

Sincerely Yours,

Shovon Mustary

iii

Executive Summary

Stock quotation is the highest price a potential buyer is willing to pay for a stock and the

lowest price a potential seller is willing to receive. The stock quotations of different

companies provided by Dhaka Stock Exchange (DSE) are shown in the report. The various

parts of stock quotations like 52-week price range, symbol etc. are discussed in details in the

report.

Dividend is also one of the parts of stock quotations. A dividend is a distribution of a

portion of a company's earnings, decided by the board of directors, to a class of its

shareholders. Dividends can be issued as cash payments, as shares of stock, or other

property. The dividend rate may be quoted in terms of the taka amount each share receives

(dividends per share, or DPS). A company's net profits can be allocated to shareholders via a

dividend, or kept within the company as retained earnings. A company may also choose to

use net profits to repurchase their own shares in the open markets in a share buyback.

Dividends and share buy-backs do not change the fundamental value of a company's

shares. Dividend payments must be approved by the shareholders and may be structured as a

one-time special dividend, or as an ongoing cash flow to owners and investors.

Dividend yield is a financial ratio that shows how much a company pays out in dividends

each year relative to its share price. In the absence of any capital gains, the dividend yield is

the return on investment for a stock. Dividend yield is a way to measure how much cash

flow we are getting for each taka invested in an equity position. Investors who require a

minimum stream of cash flow from their investment portfolio can secure this cash flow by

investing in stocks paying relatively high, stable dividend yields.

Price/earnings (P/E) ratio is a valuation ratio of a company's current share price compared to

its per-share earnings. In general, a high P/E suggests that investors are expecting higher

earnings growth in the future compared to companies with a lower P/E. The P/E ratio is

sometimes referred to as the "multiple", because it shows how much investors are willing to

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pay per taka of earnings. It is important that investors note an important problem that arises

with the P/E measure, and to avoid basing a decision on this measure alone. The

denominator (earnings) is based on an accounting measure of earnings that is susceptible to

forms of manipulation, making the quality of the P/E only as good as the quality of the

underlying earnings number. The sector wise P/E ratios are shown in the report. The P/E

ratios of Bangladesh are compared with that of Japan.

v

Table of Contents

Chapter no.

Contents of Chapter Page No.

01 Introduction 1-3

1.1 Origin 2

1.2 Objectives 2

1.3 Methodology 2

1.4 Limitations 3

02 Theoretical Review 4-6

2.1 Definition of Stock Quotation 5

2.2 Importance of Stock Quotation 5

2.3 Limitations of Stock Quotation 6

03 Parts of Stock Quotations 7-11

3.1 Stock Quotations of IDLC Finance Ltd. 8-10

3.2 Stock Quotations of Financial Institutions 11

04 Price/Earnings Ratio Analysis & Comparison 12-17

4.1 Price/Earnings Ratio Analysis 13-16

4.2 Comparative Price/Earnings Ratio 17

05 Conclusion 18-19

06 Bibliography 20-21

vii

Chapter 01

Introduction

1

This course emphasizes on financial assets, pricing of financial assets, institutional

structure of Bangladesh and some developed financial markets etc. areas. To understand

the financial markets and institutions from practical viewpoint, I discussed in this report

about the various parts of stock quotations like symbol, dividend, dividend yield,

price/earnings ratio etc.

1.1 Origin of the ReportThis report is prepared for “Financial Markets and Institutions”, Course code F-304.

The report is about “Stock Quotations Provided by Dhaka Stock Exchange”. This

report is prepared during the 3rd Year, 1st semester and would be submitted in the same

semester. The standard procedure for the long, formal report is followed here as part of

the instruction of the course instructor.

1.2 Objectives of the ReportThe primary objective of the report is to fulfill the partial requirement of the course.

The secondary objectives of this report are:

To gather knowledge about stock quotations

To show the different parts of stock quotations

To know about the sectoral price/earnings ratio

To compare the price/earnings ratio of Bangladesh with that of Japan

1.3 MethodologyAt first, I have tried to understand the theoretical aspect of stock quotations. Next, I have

shown the stock quotations of IDLC Finance Ltd. I have also shown the stock quotations

of financial institutions. Finally I have discussed about the price/earnings ratio of

different sectors. I prepared this report using Microsoft Word.

2

1.4 LimitationsThe limitations of preparing this report are –

I prepared this report within a limited time.

Moreover, I faced difficulties regarding the collection of information.

Lack of previous experience regarding the topic is also one of the limitations of

preparing the report.

3

Chapter 02

Theoretical Review

4

2.1 Definition of Stock Quotation

Stock quotation is the listing (in the stock tables of the newspapers) of representative bid

prices and asked prices for a specific stock traded on a specific exchange during a

particular trading day. Investors increasingly access stock quotes online or on mobile

devices, such as smart phones, rather than through print media such as newspapers and

magazines. A large number of Internet portals and websites offer delayed stock quotes at

no charge, with real-time stock quotes generally restricted to paying subscribers.

Example:

A stock quote for Company XYZ stock might include the real-time bid price, ask price,

quote size, price of the last trade, size of the last trade, the high price for the day and the

low price for the day.

2.2 Importance of Stock Quotation

Stock quotations are necessary to inform investors about the prices of securities. They

are very necessary because they tell us about the 52-week price range, symbol, dividend,

dividend yield, price/earnings (P/E) ratio, volume and closing price of different

companies. Stock quotes do give traders and investors a basic idea of how a security is

faring.

5

2.3 Limitations of Stock Quotation

The information contained in a stock quote is sometimes limited; for example, it may not

disclose which market makers are bidding for or offering the security, whether there are

limit orders on the security or the size of potential trades at a particular price. In other

words, stock quotes do not give the viewer access to the "order book" showing who has

an interest in a security and at what price.

.

6

Chapter 03

Parts of Stock Quotations

7

3.1 Stock Quotations of IDLC Finance Ltd.

The trading of stocks between investors in the secondary market can cause any stock’s

price to change. Investors can monitor stock price quotations in financial websites and

newspapers like The Financial Express, The Daily Star etc. Although the format varies

YTD% change

Hi Lo Stock Sym DIV Yld% P/E Vol Last

1.73%

Year to date percentage change in stock price

84.7

Highest price of the stock in this year

41

Lowest price of the stock in this year

IDLC

Name of the stock

IDLC

Stock symbol

35%

Annual dividend paid per year

1.93

Dividend yield

22.16

Price/earnings ratio based on the prevailing stock price

556,232

Trading volume during the trading day

52.4

ClosingStock price

Table No. 1: Stock Quotations of IDLC Finance Ltd.

among sources, most quotations provide similar information. Stock prices are always

quoted on a per share basis, as in the above table. The various parts of stock quotations of

IDLC Finance Ltd. are shown below:

52-Week Price Range: The stock’s highest price and lowest price over the previous 52

weeks are commonly listed just to the left of the stock’s name. The high and low prices

indicate the range for the stock’s price over the last year. Some investors use this range as

an indicator of how much stock price fluctuates. Other investors compare this range to

8

the prevailing stock price because they wish to purchase a stock only when its prevailing

price is below its 52-week high. IDLC’s 52-week high price is 84.7 and its low price is

41.So it is seen that there is a wide difference of price over the year.

Symbol: Each stock has a specific symbol that is used to identify the firm. This symbol

may be used to communicate trade orders to brokers. Tickers tapes at brokerage firms or

on financial news television shows use the symbol to identify each firm .If included in the

stock quotations, the symbol normally appears just to the right of the firm’s name. Each

symbol is usually composed of two to four letters. IDLC’s ticker symbol is the same as

its name.

Dividend: The annual dividend (DIV) is commonly listed to the right of the firm’s name

and symbol. It shows the dividends distributed to stockholders over the year on a per

share basis. IDLC’s annual dividend is .35 per share where 25% is stock dividend and

10% is cash dividend. The annual amount of dividends paid can be determined by

multiplying the dividends per share times the number of shares outstanding.

Dividend Yield: Next to the annual dividend, some stock quotation tables also show the

dividend yield (Yld), which is the annual dividend per share as a percentage of the

stock’s prevailing price.

Formula :

Dividend yield = Dividends paid per share

Prevailing stock price

IDLC’s stock dividend yield is 1.93 .Some firms attempt to provide a somewhat stable

dividend yield over time, but other firms do not.

9

Price/Earnings Ratio: Most stock quotations include the stock’s price/earnings (P/E)

ratio, which represents its prevailing stock price per share divided by the firm’s earnings

per share generated over the last year.

Formula :

Earnings per share (EPS) = Earnings

Number of existing shares of stocks

P/E ratio = Market price per share

EPS

IDLC’s P/E ratio of 22.16 is derived by dividing its stock price by the previous year’s

earnings. P/E ratios are closely monitored by some investors who believe that a low P/E

ratio signals that the stock is undervalued based on the company’s earnings.

Volume: Stock quotations also usually include the volume (referred to as “Vol” or

“Sales”) of shares traded on a day. The volume is normally quoted in hundreds of shares.

It is not unusual for 1 million shares of a large firm’s stock to be traded on a single day.

556,232 shares of IDLC are traded on a single day. Some newspapers also show the

percentage change in the volume of trading from the previous day.

Previous Day’s Price Quotations: Stock quotations shows the closing price (“Last”) on

the previous day. In addition, the change in the price is typically provided and indicates

the increase or decrease in the stock price from the closing price on the day before.

10

3.2 Stock Quotations of Financial Institutions

The stock quotations of 23 financial institutions listed in Dhaka Stock Exchange (DSE) are given below:

# TRADING CODE

LTP*

HIGH

LOW CLOSEP*

YCP*

CHG TRADE

VALUE (mn)

VOL

1 BAYLEASING

19.7 19.9 19.1 19.7 19.2 0.50 96 1.56 80093

2 BDFINANCE

9.9 10.0 9.8 9.9 9.9 0.00 209 2.71 274875

3 BIFC 8.7 9.0 8.7 8.8 9.0 -0.30 126 1.61 181781

4 DBH 81.3 84.0 80.5 81.2 83.8 -2.50 30 0.33 40505 FAREASTF

IN10.0 10.2 10.0 10.1 10.1 -0.10 116 1.97 19551

36 FASFIN 12.0 12.1 11.8 11.9 11.7 0.30 28 0.70 581597 FIRSTFIN 12.3 13.0 12.2 12.3 12.4 -0.10 125 1.70 13624

98 GSPFINAN

CE12.5 12.5 12.3 12.4 12.4 0.10 141 1.90 15298

59 ICB 128.

5 129.

7 119.1 125.6 127.7 0.80 961 47.76 38108

810 IDLC 52.8 52.9 52.0 52.4 51.9 0.90 381 29.10 55623

211 ILFSL 11.0 11.0 10.8 10.9 10.8 0.20 126 1.56 14293

512 IPDC 15.0 15.1 14.8 15.0 14.7 0.30 67 0.96 6410913 ISLAMICFI

N12.5 12.6 12.4 12.5 12.6 -0.10 115 1.64 13165

014 LANKABA

FIN27.7 28.2 27.6 27.8 27.6 0.10 328 11.71 42016

715 MIDASFIN 11.8 12.1 10.5 12.0 11.0 0.80 48 0.49 4150116 NHFIL 22.0 22.3 21.8 22.1 21.9 0.10 48 0.37 1686317 PHOENIXF

IN19.2 19.9 19.1 19.3 19.5 -0.30 71 1.41 72401

18 PLFSL 14.8 14.9 14.5 14.7 14.5 0.30 407 11.09 755166

19 PREMIERLEA

8.3 8.4 8.1 8.3 8.1 0.20 53 0.43 52047

20 PRIMEFIN 13.0 13.2 12.8 12.9 12.8 0.20 288 7.83 607851

21 UNIONCAP

15.4 16.4 15.1 16.0 15.5 -0.10 253 6.96 434123

22 UNITEDFIN

19.3 19.3 18.8 19.2 19.0 0.30 73 1.42 74214

11

23 UTTARAFIN

61.3 62.2 60.0 61.4 61.2 0.10 246 7.52 121796

Table No. 2: Stock Quotations of 23 Financial Institutions

Notes :

CHANGE = (LTP - YCP ) LTP* = Last Traded PriceCLOSEP* = Closing price YCP* = Yesterday's Closing Price

 

Chapter 04

Price/Earnings Ratio Analysis & Comparison

12

4.1 Price/Earnings Ratio Analysis

The price /earnings (P/E) ratio is an index obtained through dividing the stock price by

earnings per share to show the ratio between these two figures. As such it is contemplated

as criterion for investment decision. Having been used with stock yields in developed

economics since 1920s, investors particularly institutional investors have come to

consider P/E ratio more important than yield in recent times.

Formulation of P/E ratio has substantial relation with share valuation. Security analysts

usually go through the process discounted forecasting earnings or dividend to get a

present value of a share. Conceptually the investment value of a share is equal to the

present value of dividends expected from its ownership. In notational terms, this can be

expressed as-

P o=∑t=1

∞ D tt

(1+i )

……………………………………………(1)

Where P0 is the current of share, Dt is an expected dividend at the end of period t and i is

equal to the investor`s discount rate of opportunity cost applicable to the dividend stream.

This is a general volume model.

When the dividend per share is assumed constant year after year at a value of D then the

equation (1) becomes:

P0=D

(1+i)+D

(1+i)2+

D(1+i)3

+………………………………………. (2)

13

If g is considered as a constant growth rate, the valuation model takes the form of the

equation below-

P0=D1

(1+i)+

D1(1+g)(1+ i)2 +

D1(1+g)2

(1+i)3 +………………………………….. (3)

Fortunately there is a simple formula for the sum of geometric series. If i greater than g

then it simplifies to,

P0=D1

i−g……………………………………………………………… (4)

Equation (4) is popularly known as constant growth model. Two assumptions underlying

the equation deserve attention –a constant growth rate and infinite time horizon. Rather

than forecast an explicit value of the dividend or earnings, many analysts start with ex

post data of most recent years and project a growth rate g in subsequent years.

There might have some variation between actual and forecast. However it should be

recognized that the value of this growth rate g represents an average growth over the

investor’s time horizon, n years. Secondly, an infinite tine horizon indicates mathematical

convenience rather than investment reality. Instead of discounting over a finite time

horizon of n years, where the value on n may vary between 5 and 50 years depending on

the investors, it is assumed that discounting will take place over an infinite time horizon.

It is of course recognizes that the combinations of these two assumptions implies that the

value of g must be an average growth rate over an infinite time horizon. The constant

growth model is widely used and as such we will focus on the model. To arrive the

concept of P/E ratio, one merely has to divide both side of equation (4) by earnings E.

14

Then it becomes

P0

E=¿

DE

i−g……………………………………………………. (5)

Thus as the model indicates, the key determiners of P/E ratio; the highest discount rate,

the lower will be P/E ratio. It is needless to say that there is inverse relationship between

payout ratio and the growth rate of dividends. This is because when the payout ratio is

high, the retention ratio is low. A low retention ratio indicates a low rate of growth of

dividends. It is obvious that the formula will yield meaningful results only if the value of

discounting factor i is greater than the growth rate g. Otherwise P/E ratio will be infinite

or negative. This does not mean that P/E ratio is useless if the growth rate for certain

companies are found higher in some years. It is only the long term growth rate which has

relevance to the formulation. The most common traditional index for investment

decisions is yield obtained by dividing the annual dividend by purchase price of the

stock. It enables the investors to determine the maximum price ha can pay for a stock

issue for a given dividend per share when he wants to secure a certain rate of return on

the investment in comparison with the interest rate on savings and bond yields. In other

words, the yield emphasizes the dividend rate. In implication of P/E ratio, on the other

hand, goes one step further and underscores the relationship between the potential profit

per share and stock price. It is usually recognized that the yield on stocks should be

higher than that on fixed-interest bearing securities like bonds and debentures because of

higher investment risk attached to stock investment than fixed interest bearing securities.

However it is observed that with the rapid economic growth of the post war era and the

development of economics policies, the relationship began to reverse itself around 1955

and stock purchase continued even when their yield fell below that of bonds and

debentures. The phenomenon is known as yield revolution.

15

Table No. 3: Sector wise P/E ratio of the listed stocks on DSE

Sector 2014 2013 2012 2011 2010 2009 2008 Bank 8.63 10.01 8.68 10.50 25.24 16.46 16.33 Financial Institutions 19.52 19.50 15.19 12.15 47.27 32.45 25.26 Mutual Funds 6.76 8.99 12.42 6.24 17.53 29.06 20.37 Engineering 22.47 23.71 19.08 26.40 50.10 36.50 30.24 Food & Allied 33.51 27.95 20.99 16.41 27.30 17.29 16.93 Fuel & Power 12.80 11.90 11.44 13.95 21.57 17.71 15.83 Jute 175.79 47.44 23.62 32.64 55.66 27.23 12.15 Textile 13.20 17.97 17.50 22.66 52.44 32.93 13.85 Pharmaceuticals 26.43 22.48 18.67 22.52 34.12 27.64 30.96 Paper & Printing 20.64 71.91 29.85 42.23 126.93 27.59 9.36 Service & Real estate 42.80 22.77 18.28 25.82 43.93 45.65 22.66 Cement 34.80 19.42 21.81 21.60 33.44 56.90 10.26 IT 23.72 23.18 22.92 38.93 64.91 60.71 46.52 Tannery 20.20 15.97 11.74 15.60 20.66 15.39 16.43 Ceramic 29.83 28.36 20.62 30.20 106.86 39.97 47.80 Insurance 13.50 18.53 22.25 20.37 64.64 31.39 21.81 Telecommunication 33.60 16.13 12.91 20.62 20.35 84.85  Travel and Leisure 15.83 17.02 25.36 23.07 65.45    Miscellaneous 46.24 17.17 5.84 8.02 19.54 28.85 34.43 Market P/E 17.77 15.07 12.07 13.68 29.16 25.65 18.42

Note: P/E ratio calculated in December every year

If we see the sector wise P/E ratio of the listed stocks on DSE at Table no. 3, we find that

mutual funds has the lowest P/E ratio as expected due to depressionary condition

prevailing in this sector. Broadly speaking, 2010 shows higher P/E ratio in most of the

sectors in comparison to other years.

16

4.2 Comparative Price/Earnings Ratio

The P/E ratio of the listed stocks at 2008-2014 of Bangladesh are compared with that of Japan in the below table:

Year Price earnings ratio (Multiple)

Bangladesh Japan

2008200920102011201220132014

18.4225.6529.1613.6812.0715.0717.77

14.1 -32.915.018.423.518.5

Table no. 4: Comparative P/E ratio of the listed stocks at year end

It is difficult to evaluate stock price merely by looking at the figures of international

comparison in the above table because of different discount rates used for pricing and rate

of profit growth. Nevertheless it has some analytical relevance. This table gives an

impression that different standard for P/E ratios can be used for different countries. The

highest range is found for Japan and the lowest range is for Bangladesh.

17

Chapter 05

Conclusion

18

Conclusion

Stock quotations are an estimate of price or a price at which one party is willing to buy or

sell a certain number of shares of stock from the other. Stock quotations are published in

newspapers or it can be shown in websites. They provide information about the

company’s latest stock price, day opening and closing price, dividend, price/earnings

ratio etc. They help the investors to make decision about stock purchase or sale. They

also reflect the company’s overall performance. Finally we can say that, stock quotations

are the performance indicator of a company.

19

Chapter 06

Bibliography

20

Bibliography

Books:

1. Madura, Jeff, Financial Markets and Institutions-7th Edition

2. Capital Market & Institutions in Bangladesh: Some Implications of Japanese Experience

Report:

1. Tokyo Stock Exchange (TSE) Monthly Statistics Report for First Section Stocks and Securities Research Institute, 2014

Websites:

1. www.dsebd.org

2. www.jpx.co.jp

3. www.investopedia.com

4. www.businessdictionary.com

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