How To Invest In Stock Market In Bangladesh

Published : 01 Mar 2022 07:07 PM | Updated : 11 Mar 2022 06:29 PM

Bangladesh has two Stock exchanges which include the Dhaka Stock exchange and the Chittagong stock exchange. The state of the stock market in Bangladesh can be matched to where Vietnam was five years ago. The market in Bangladesh is small and it's not easy to access it. More than 300 companies are listed in the stock market in Bangladesh but only 7 companies are the most preferable.

To trade in the stock market a company has to be listed. There is a minimum requirement for a company to be listed in the Dhaka Stock exchange in Bangladesh. A company is required to offer at least 10% of its paid-in-capital. This is the total cash or other assets the shareholders give the company in exchange for stock. Let’s find out how to invest in stock market in Bangladesh.

How To Invest In The Stock Market

You can invest any amount of money in the stock market provided you own a bank account and a National Identification card or a valid passport. What you need is a Beneficiary Owner's account which can be created individually or with another person in the brokerage house. The organization that facilitates trading and investing in stock exchanges is called a brokerage house.

To open a Beneficiary Owner's account, there are some of the requirements that one should have. These requirements include; a photocopy of your national identification card or passport, passport size photos, and a copy of your bank details. It is also necessary to provide identification documents of the nominee which include the passport size photos and photocopies of the national identification card.

The process of opening a Beneficiary Owner's account can be done online or physically. When opening the beneficiary owner's account the first step is to select a brokerage house for yourself. The best way to get the brokerage houses is to search for them online on the Dhaka Stock exchange website.

Once you have selected a brokerage house of your choice, the next thing is to visit their website or you might even prefer to visit their offices. There you will fill up some forms and provide the requirements. Then you will pay for account opening charges and wait to receive your account number within one or two days.

How To Select The Stock To Buy In Stock Market

Finding the right stock to buy requires no special technique. There are different tactics for selecting the stock to buy. These tactics vary from person to person depending on various reasons. People choose the right stock for themselves depending on the type of investors they are, how the market conditions are, what type of analysis they believe in, and many other reasons. You need to be keen while choosing the right stock.

I will recommend you to first analyze the market, the overall state of the economy, and the company thoroughly. That kind of analysis is the fundamental analysis. People focus on different factors during the analysis, you might focus on the prices and different volumes of stocks. This is known to be technical analysis.

Other people will just go after other investors or purchase the stocks with the highest demand in the market. For you a beginner, I will suggest you start by investing in blue-chip stocks. Blue-chip stocks are stocks of companies with a good reputation in quality, reliability, and profitability.

How To Buy And Sell Stocks

There are three main ways of buying and selling stock. One of the three ways is being physically present at the brokerage house. The other way that one can use it is by calling your broker to buy and sell the stocks on your behalf. Then the last is through using the DSE mobile app. Every brokerage house puts some charges in every transaction usually ranging from 0.25% and 0.50%.

That Cleary means whatever amount of stock you buy there will always be some additional charges. For one to be able to trade in the Dhaka Stock Exchange mobile app one has to first register with the brokerage houses. Using the mobile app is somehow disadvantageous as there is an additional charge that comes with using the app unless the government decides to subsidize it.

How Many Returns To Expect

Capital gains and dividends are the two main ways through which one can earn from a stock. When you sell stock at a higher price than the price you used in buying it you gain capital. The extra profits a company shares with its stockholders are what we call dividends. Now to the main question of how many returns to expect in a year.

Different saving alternatives will give back different returns. Investing in the stock market is riskier than investing in any other sector of the economy. Thus before entering the stock market you need to study everything about stocks to avoid future losses. Then you will select the best alternative to invest in that will give you the highest returns compared to other options. Something to note is that the returns will not be the same every year.

How Risky Is It To Invest In The Stock Market In Bangladesh?

Any kind of investment that anyone does comes with some risks. Investing in stocks is way riskier than the usual investments no matter which stock market you invest in. The market may even collapse at times. The last time the market collapsed according to the records was a month ago, after which the security exchange commission took multiple significant steps to improve the market.

Improving the market, took it to a better place but not where the market should be. This means up to date the stock market is still not doing good and it will take time to get to the perfect level. To avoid great losses when stocks fail, you will need to invest in different stocks such that if one stock fails the other stocks can save you.

Read More:

Stocks plunge over Ukraine crisis

Price fall in large-cap drives stocks further down