Financial Literacy Programs in Dhaka Stock Exchange

By: The WFE Interviewee Team Oct 2022

The Dhaka Stock Exchange Ltd. (DSE) was established in 1954 with an aim to be the leading exchange in the region and a key driver of economic growth with state-of-art technology and world class service to ensure highest level of confidence among stakeholders.

Since the inception, DSE has understood the necessity to function as a center for promoting financial literacy among investors through creating awareness by providing appropriate and effective training. With this motto as a guiding principle, the DSE Training Academy (DTA) was established on Sept. 10, 2007.


Photo: A glimpse from the World Investor Week, 2021 observed by BSEC, DSE and other stake holders

Financial literacy program and the initiatives of DSE

The concept of increasing financial literacy among investors picked up momentum on Jan. 8, 2017 through the launching of countrywide 'Financial Literacy Program' arranged by the Bangladesh Securities & Exchange Commission (BSEC), the regulatory body of capital market in Bangladesh. It was inaugurated by H.E. Sheikh Hasina, Honorable Prime Minister, Government of the People's Republic of Bangladesh. Since then DSE, like other exchanges of the world, has been celebrating World Investor Week initiated by IOSCO in collaboration with BSEC and WFE to uphold the spirit of transmitting financial literacy among investors. The Chairman, Commissioners and high officials of BSEC, stock exchanges, various stakeholders and investors are participants of this program.

Programs launched by DSE Training Academy (DTA)

DSE Training Academy (DTA) developed its programs to address the needs of multiple target groups identified by DSE and the regulatory organization BSEC. Resource persons for these courses are chosen from practitioners, academicians, and prominent and recognized experts of capital market. The target audiences of these courses include retail investors, portfolio/fund/asset managers, investment analyst/consultants/executives from banks, professionals from public and private finance-related institutions and individuals.


Here is a a brief summary of the financial literacy programs operated by DTA:










  • Beginners on the basics of investment procedures

 

This program aims at educating the existing and the potential investors (beginners) of the market.

Contents

  • Basic orientation of capital market regulatory framework
  •  Structural overview of Bangladesh Capital Market
  • Enforcement action & appeal
  • Measures to profit maximization & loss minimization in stock investment
  • Exercise of stock valuation with fundamentals
  • Financial Statement Analysis

Participants of this advanced program will be privileged of acquiring the comprehensive knowledge necessary to prepare and evaluate the financial statements of a company.

Contents

  • Introduction and analysis of the financial statements, profitability, growth and sustainable earnings
  • Practical sessions on listed companies/ financial institutions.
  • Compliance in Corporate Governance by Listed Companies

The program offers the participants with the standards of precise corporate culture under the Corporate Governance Code, 2018 framed by BSEC.

Contents

  • Maintaining transparency in accounts preparation and compliance of Listing Regulations
  • Role of Company Secretary in compliance with Corporate Governance
  • Corporate Governance issues and the quality of earnings

iv. Portfolio Management & Securities Analysis

The program aims at educating the existing and the potential investors of the market on portfolio management for making wise investment.

Contents

  • Stock Selection: Finding Value Behind the Numbers
  • Equity Strategies: From Stock Picking to Portfolio Management
  • Active Vs. Passive Portfolio Management
  • Balancing Risk and Reward

v. Risk Management & Control

This program has been designed for professionals to understand the concept of risk, linkage of risk and return, impact of credit risk and interest rate risk in assets and liabilities, its measurement through duration and modified duration and mitigation thereof.

Contents

  • Principles of Risk Management
  • Risk Governance & International Risk Regulation
  • Operational Risk & Reputation Risk
  • Credit Risk & Market Risk
  • Strategic Risk, Money Laundering & Terrorist Financing Risk
  • Investment Risk, Liquidity Risk, Cyber Risk

vi. Valuation of Securities

This program is designed to provide training on valuation of shares using simulation models with examples and case studies.

Contents

  • Introduction to Valuation
  • Risk and Return concepts essential for evaluating an investment
  • IPO Valuation: Bangladesh Perspective
  • Free Cash Flow Valuation Models
  • Valuation by Residual Income Model
  • Valuation by relative/ market based valuation models
  • Common errors in company valuations

 vii. Basic Technical Analysis

The highlight of the course is to deal with the psychological aspect of trading by developing a trading framework for better investment and trading output.

Contents

  • Introduction to Technical Analysis
  • Technical Indicators
  • Geometrical Display in Technical Analysis
  • Trading System
  • Practical Demonstration of Trading System
  • Broad Market Analysis

viii. Advanced Technical Analysis

Curriculum of the advanced technical analysis training course is focused on price-based technical analysis.

Contents 

  • Candlestick Chart Patterns
  • Chart Patterns Analysis
  • Fibonacci Tools
  • Market Indicators
  • Technical Analysis Tools
  • Understanding Periods and Parameters
  • The Elliott Wave Principle
  • Trading Rules with Technical Analysis

ix. Anti-Money Laundering & Combating Financing of Terrorism (AML & CFT) for the Capital Market Intermediaries

To acquaint the target group participants with the concepts and important provisions of Money Laundering Prevention Act, 2012 and Anti-Terrorism (Amendment) Act, 2013. This course is conducted by Bangladesh Financial Intelligence Unit (BFIU).

Contents 

  • Overview & Legal Framework on AML/CFT relevance and compliance with CMIs on AML/CFT.
  • Compliance, Responsibilities & Record Keeping
  • Risk and Vulnerabilities for CMIs
  • KYC requirements & Account Opening Form requirements
  • Self-Assessment Reporting, Suspicious Transaction Identification & Reporting System

x. Investors' Awareness Program (General)

The program aims at educating the potential investors regarding capital market issues in general.

 Contents

  • Overview of DSE Mobile App
  • Rights and Responsibilities of Investors
  • Fundamentals of Stock Valuation
  • Investment Techniques

Initiatives to promote information technology based financial literacy 

As part of introducing the youth of the country to the elementary concepts of stock market and attracting them to the capital markets, DSE is developing a free Sharemarket Game, similar to one used by the Australian Stock Exchange (ASX). To popularize this game, DSE is planning to launch university-based competitions all over the country. Through this game simulating real-life share trading students will develop their understanding of the share market, learn to research about companies, realize the impact of making sensible investment choices, and much more.

Initiatives taken by DSE to celebrate World Investor Week in 2022

DSE has decided to conduct a virtual program to observe World Investor Week 2022, in collaboration with DSE Brokers Association of Bangladesh (DBA) and the regulatory authority- Bangladesh Securities & Exchange Commission (BSEC). The topic chosen for this year’s celebration is: Sustainable Finance and its impact in the Capital Market of Bangladesh.

DSE supports whole-heartedly the combined celebration of World Investor Week by IOSCO and WFE, which aims to uphold the significance of developing financial literacy among existing and potential investors of the capital market.