When the market witnessed an unusual bullish trend in November-December that signalled a possible crisis, regulators' prompt actions and investors' sensible decision tackled the situation.

Both primary and secondary markets were vibrant with investors keeping their account busy for daily transactions. They also kept faith in new initial public offerings (IPOs).

Market observers feel that fixing of a date for launching the central depository system (CDS) was a major development in the capital market in 2003.

The Securities and Exchange Commission (SEC) on December 23 granted business commencement licence to Central Depository Bangladesh Ltd and asked it to start operation from January 24.

The market absorbed 14 new IPOs which raised a total of Tk 135.12 crore. All but a few IPOs were oversubscribed and the bank IPOs got tremendous response.

Evaluating the 2003 market, DSE CEO Salahuddin Ahmed Khan said though there were ups and downs, there was effective trading. "Scrips with strong fundamental performed well which showed maturity of the market," he observed.

The market grew slowly but steadily, he said adding that the suspension of 16 companies was a major and bold step by the regulators which brought the post-Eid restive situation under control.

Of the 14 IPOs issued in 2003, eight got listed at Dhaka Stock Exchange (DSE) and 11 at Chittagong Stock Exchange (CSE).

Of the 248 companies listed at DSE, 196 held annual general meetings, 154 paid dividends, 18 issued bonus shares and six declared right shares. Forty five companies did not declare dividend and 46 companies even did not hold AGM.

Trading took place on DSE on 286 days throughout the year and a total of 61,27,38,635 shares worth Tk 1915,23,16,355 were transacted. The highest transaction on a single day was 1,02,04,764 shares worth Tk 31.32 crore.

SEC on December 8 withdrew the stagnant Weighted Average Index from both bourses. Market operators as well as investors were demanding withdrawal of the index which they said does not reflect real strength of the market.

Following withdrawal of the index, DSE General Index emerged as the prime indicator, which rose to the highest 1015.97 points on December 6. The lowest was 742.23 points on March 18.

CSE saw the highest transaction on December 3 with trade volume and value hitting 78.55 lakh shares and Tk 2.87 crore respectively. The CSE General Index peaked at the highest 1753.24 points on December 6 while the lowest was 1269.21 on June 12.

A total of 11 new issues got listed at CSE in 2003. Of the 180 listed companies at the bourse, 153 held AGM and 135 declared dividend.

CSE started internet based trading services from January 1, 2003. It received licence to act as depository participant in the CDS. CSE also retained its status as South Asian Federation of Exchanges (SAFE) Secretariat for another year.

CSE CEO Wali-ul-Maroof Matin said a few IPOs this year experienced under-subscription which show that investors are now more aware of quality of company management.

"The market performed well but it should have been much better if it was guided properly," he said mentioning that the top post of the SEC remained vacant for few months.

The market capitalisation is steadily increasing in both bourses. If top policymakers can be made understood the importance of capital market, the market would have grown further, he said.

Yawar Sayeed, managing director and CEO of Assets and Investment Management Services of Bangladesh (AIMS), said the year of 2003 was a year of hope for the country's capital market.

"Quality IPOs have come to the market, investors regained confidence, regulators become more alert which give a matured, stable character to the market," he said.

In the face of an unusual bullish trend in the stock exchanges after Eid-ul-Fitr, SEC on December 3 suspended trading of some 16 Z category company shares. The SEC is yet to lift the embargo as none of them fulfilled the regulators' condition of resuming production.

Analysts found the market responding well to the incentives declared in the national budget for 2003-2004. In the budget, the finance minister exempted investment in purchase of shares for two years (up to June 30, 2005) from explanation by tax department.

To give a boost to capital market, income from dividend was made tax-free and tax gap between listed and non-listed companies was widened in the budget.

The companies that issued IPOs in 2003 are Khaja Mosaic, Keya Detergent, Mutual Trust Bank, ICB AMCL 1st Mutual Fund, Jago Corporation, First Lease International, Agni Systems, Standard Bank, Bank Asia, One Bank, Mercantile Bank, Daffodil Computers, JMI-Bangla Co and Lafarge Surma Cement.

Mirza Azizul Islam joined SEC as chairman on November 1. The post fell vacant on July 12 when tenure of immediate past chairman Manir Uddin Ahmed expired.

DSE got new chief executive officer when Salahuddin Ahmed Khan, associate professor of Finance and Banking Department of Dhaka University, joined the bourse on September 10.

Election to the Board of Directors of CSE council was held on November 18. Habibullah Khan took over charge of presidency on November 19.