Term Papers on Tecno

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Term paper

Investment Banking (Course-B-504)

Submitted To:Hasina Sheykh

Lecturer

Department Of Banking

University Of Dhaka

Submitted By:

Group-8

Name BBA Roll

TANIA CHOWDHURY

MAHIMA HOQUE CHOWDHURY

STELLA HAPPI MONDOLSHAHRIMA RASHIDI

DIBA SARKAR

SHAILA TANVIR

TAJKIA TARANNUM

6-049

6-075

6-0176-053

6-057

6-087

6-503

Date of Submission

20 July 2006

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Background

We are seven friends. We have just finished our MBA. In our last semester we studiedtinvestment Banking which helped us a lot to know how to invest in the capital market.

We got clear idea about primary secondary market, stock exchanges, market participants,

process of investing in primary & secondary market. We wanted to poetically implement

our learning. Thats why we decided to interest in capital market. And for that purpose we

started arranging fund. Some of us had some personal savings & some of us decided to

arrange money form our family. Each of us arrange Tk. 10,000/- & in total we arranged

Tk. 70,000/-.

Now its time to go to the stock exchange. Before that we wanted to consult with one of

the relative of our group who is an investor in the primary market.

So, we decided to consult first with the investor & then to take the decision about our

investment.

Introduction of the Investor

Investors Name : Wasim Haider

Occupation : Service Holder

Age : 31

Type of Investment : IPO

Company : Sonar Bangla Insurance Company

Number of Shares bought : 100

Full value : 50

Total Investment : Tk. 50,000/-

Market : Primary Market

Broker : Dynamic Securities Consultants

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Conversations

1) Why have you chosen to in primary market instead of secondarymarket?

Investor: If you invest in IPO it gives great opportunity to make good profit. For

example: If you buy 100 shares from IPO whore face value was so each, After one or two

month you cash sale it in secondary market with higher price, for example I sale my share

in 100 each which price increased. And I make profit of 50 Tk gross each share. But in

secondary market you will see very little price charge. For example the share I sold forthe first time in secondary market at 100 Tk each, after one month its price increased by

only .04 Tk, that is price offered your further trading (selling/buying) in 100.04 Tk. So

the person who bought this share from me at 10 each will not be interested to sale it at .04

Tk profit for each share.

So, profit caring possibility in secondary market is very low but in primary market the

chance is more to make profit. Thats why I chose IPO.

2)So, which company you selected for investment & how much was the

investment.

Investor: I selected a company named Sonar Bangla Insurance Company often

consulting my broker. It was a new company first time offering their shares in primarymarket. I have compared other companys in IPO & selected this company as I got good

impression about the company. For example, its management was strong, loosed of

directions had good experience of business, the industry of insurance is growing & doing

will & price they offered for each shores is reasonable. So, I selected that company.

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Conversations

3) How your broker helped you?Investor: Broker act as the agents of mine. To trade in primary & secondary you must

have to take the help of brokers who are members of stock exchange. There are different

types of brokers, about which you have goods knowledge as you completed your

investment Banking course. My broker helped me to open account to participate in IPO.

And also act as my agent to buy the shares & to sale my shares is secondary market &

they took fee from me for opening the account & to buy sale the shares.

4) What was the type of your brokers firm?

Investor: It was a Full-service brokerage firm which provide exactly that, full-service.

They offer clients professional research reports and advice on what/when to buy and sell.

They may also offer the opportunity to participate in IPOs, unit investment trusts,

financial planning, and other investment products.

5) So, what are the steps for investment in IPO?Investor: Steps are-

1. Choose a broker.

2. Open an account.

3. Choose the company to invest.

4. Select the number of this security you want to buy.

5. Give instruction to the broker to buy the share.

6.After buying from IPO, give instruction to the broker to sale the security in

secondary market when price rise.

6) How we can open account?

Investor:

1. Apply to a specific security company or broker in a specified form with two copies of

passport size photo.

2.Pay the necessary (TK 300) fees

3.After submitting the application the investor get a BO account (beneficiaries owners

account) with a unique number which will be used in application of every IPO share4.One person can make single a BO account and a joint BO account with someone.

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Conversations

7) What things need to be examined before investing?

Investor:

Following things must be examined-

1. Financial soundness

2. Corporate image

3. Social reputation

4. Profitability

5. High growth

6. Enlistment in Bangladesh security exchange

8) What are the procedures of getting in IPO?

Investor:

1. Collect the form of IPO share from the specific banks

2. Fill up the form and pay the necessary money along with the form.

3.The unique BO Account number is required in this stage.

4.The company arranges a open lottery to allocate the shares

5.The Name of the winners is published in the internet

6.The company requests the winners and the losers in a specific place and in a specificdate to collect the warrant letter (sign of authority) or refund letter.

9) Tell us something about the secondary market operation of your

shares?

Investor:

There are many points-

Primary share turns into Secondary share process of selling:

After the P.S comes in the market and has started its trading it turned into Secondary

share. The price of the share may be increase or decrease depends many other factors.

And if an owner wants to sell his share he will negotiate his broker to sell his share. The

broker gave him a prescribed form and made fill up the shareowner. The trading number

of BO in used in this exchange. and after the four working days the money will be

deposited into investors account

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Conversations

Trading in to Secondary market:An investor also enter in to the market by purchasing secondary share. If he consider

purchasing shares of X company will be worthy , he might buy it. For example X

companys initial face vale was Tk 50 and rises it Tk 100 when it when to secondary

market and still increasing . Here, the investor might buy the share At Tk 110 and may

wait for further price hiking . But sometimes he may incur if the prices of shares

suddenly fall down/Loss .

Stock Price Fluctuation

The price of a stock fluctuates fundamentally due to the law of Supply and demand.Like all commodities in the Market, the price of a stock is directly proportional to the

demand. However, there are many factors on basis of which the demand for a particular

stock may increase or decease. These factors are studied using methods of Fundamental

analysis and Technical analysis to predict the changes in the stock

Technology's influence on trading

Stocktrading has evolved tremendously. Since the very first Initial Public Offering (IPO)

in the 13th century,[citation needed] owning shares of a company has been a very attractive

incentive. Even though the origins of stock trading go back to the 13th century, themarket as we know it today did not catch on strongly until the late 1800s.

Co-production between technology and society has led the push for effective and efficient

ways of trading. Technology has allowed the stock market to grow tremendously, and all

the while society has encouraged the growth. Within seconds of an order for a stock, the

transaction can now take place. Most of the recent advancements with the trading have

been due to the Internet. The Internet has allowed online trading. In contrast to the past

where only those who could afford the expensive stock brokers, anyone who wishes to be

active in the stock market can now do so at a very low cost per transaction. Trading can

even be done through Computer-Mediated Communication (CMC) use of mobile devices

such as handheld computers and cellular phones. These advances in technology havemade day tradingpossible.

The stock market has grown so that some argue that it represents a country's economy.

This growth has been enjoyed largely to the credibility and reputation that the stock

market has earned.

Dividend:

Any investor can get the dividend from the company rather than selling the share. The

percentage of dividends are fixed after the AGM of company is held.

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http://en.wikipedia.org/wiki/Supply_and_demandhttp://en.wikipedia.org/wiki/Markethttp://www.indiahowto.com/why-stock-prices-change.htmlhttp://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/Technical_analysishttp://en.wikipedia.org/wiki/Tradinghttp://en.wikipedia.org/wiki/Initial_Public_Offeringhttp://en.wikipedia.org/wiki/Wikipedia:Citing_sourceshttp://en.wikipedia.org/wiki/Wikipedia:Citing_sourceshttp://en.wikipedia.org/w/index.php?title=Co-production&action=edithttp://en.wikipedia.org/wiki/Stock_brokershttp://en.wikipedia.org/w/index.php?title=Computer-Mediated_Communication&action=edithttp://en.wikipedia.org/wiki/Cellular_phoneshttp://en.wikipedia.org/wiki/Day_tradinghttp://en.wikipedia.org/wiki/Supply_and_demandhttp://en.wikipedia.org/wiki/Markethttp://www.indiahowto.com/why-stock-prices-change.htmlhttp://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/Fundamental_analysishttp://en.wikipedia.org/wiki/Technical_analysishttp://en.wikipedia.org/wiki/Tradinghttp://en.wikipedia.org/wiki/Initial_Public_Offeringhttp://en.wikipedia.org/wiki/Wikipedia:Citing_sourceshttp://en.wikipedia.org/w/index.php?title=Co-production&action=edithttp://en.wikipedia.org/wiki/Stock_brokershttp://en.wikipedia.org/w/index.php?title=Computer-Mediated_Communication&action=edithttp://en.wikipedia.org/wiki/Cellular_phoneshttp://en.wikipedia.org/wiki/Day_trading


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Conversations

Curb Market

When share are traded illegally its called curb market. But due to the imposing of recent

government regulations dominance of this trend in decreasing.

Artificial Demand:

Some times in the share market demands for some specific shares are created

malpractice. This is basically done by some syndicate who buys some shares at a

exorbitant prices and create such a situation where people will buy those shares more than

those prices.

10) How can we choose broker?

Investor:

You should choose broker with the following criterias-

-Integrity, intelligence & efficiency

-Experience in market

-Someone who understands your investment

-reputation in market-costs & commissions effective

11) What are the qualities of a good share trader?

Investor:

1. Sound knowledge in Bangladesh economy.

2. Should be up-to-date in recent business phenomena.

3. Strong relationship with the stock market officials4. Far sight ness

5. Risk taking ability

6. Should be very cunning

7. Should spend as much time in share market to sense the market

8. Having an excellent sense of prediction about the market trend.

9. Preferable to have some academic business knowledge.

10. Constant communication with the middle man or broker

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Conversations

13) What are the problems of investing in secondary market in our

country?

Investor:

Market is extremely volatile.

The market is directly related to the economic decisions of government.

Trading of shares is now fully automated.

General people of Bangladesh still consider investing in Share business

risky

The general economic condition id reflected in share business.

Sometimes there is thousands of fake BO account is opened by the company

who are allocating shares. Their intention is to keep the share within their

relatives.

14) What was your account type?

Investor:

It was cash account where we use our own money to buy the share.

15) What is your suggestions for us?

Investor:

Go to my broker and open an account. You should invest in IPO after consulting the

broker.

16) If the price of the share not increase then what will we do?

Investor:

You should hold the shares & wait for price increase.

17)Give us some information about capital market.

Investor:

You know most of the things, anyway these are my observations-

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Conversations

Primary Market Information

3.1 TYPES OF PRIMARY MARKET PLACEMENT

Securities are issued in the primary market by one or more of the following methods:

Public Issue

An offer to the public by an issuer through a prospectus for subscription. This is

the most common method of primary market placement in Bangladesh.

Private Placement

An offer to specific known persons selected by the sponsors for procuring

subscription.

Right Issue

An offer in which existing shareholders are offered new securities in proportion to

their existing holdings.

Offer for Sale

An invitation to the general public to purchase the stock of a company through an

intermediary.

3.2 INTERMEDIARIES

Stock Exchange member companies, merchant and commercial banks, insurance

companies, investment and finance companies work as intermediaries to play the

following roles:

Manager to the Issue

The manager to the issue prepares the prospectus and is responsible for ensuring

full and fair disclosure about the issue and the issuer. The issue manager has to

impart a Due Diligence Certificate which is published along with the prospectus.

Underwriters

Underwriters justify the price of the issue and guarantee purchase of any non-

subscribed portion. Members of the Exchanges, Merchant bank and Insurance

Companies are the leading underwriters.

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Conversations

3.3 PROSPECTUS, DOCUMENTATION, ANNOUNCEMENTSA prospectus is required when a company intends to issue any shares or

debentures or publicly offer for sale of any securities. A draft prospectus is

submitted to Securities and Exchange Commission (SEC) for confirmation of

compliance with SEC guidelines for disclosure. The prospectus must also be

checked by the Stock Exchanges before publication in the national dailies.

The prospectus details the amount and type of securities, offer price per unit and

on aggregate basis, the amount of commission, the amount of proceed to the

company, identity of the sponsors, the underwriters and the issue manager.

3.4 DISTRIBUTION, CLEARING AND SETTLEMENT

Within 10 days of publication of the prospectus the company applies for listing on

a stock exchange. In the case of over-subscription, a lottery takes place. The

company issues Allotment Letters to the successful applicants and returns money

to the unsuccessful applicants within 40 days from the closing subscription date.

Share Certificates are issued within 90 days of issuance of allotment letter.

Allotment Letters are tradable on Stock Exchange as soon as the company is

listed.

The holder of an allotment letter may renounce it in favour of another person

within 30days of allotment.

Brief Investment Guide for Trading in the Stock Exchanges

What is stock market?

A stock Market is place where stocks (shares) can be bought and sold

A quoted company is company whose shares are traded on the stock Exchanges.

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Conversations

What type of instruments are traded?The following type of instruments are traded at Dhaka Stock Exchange (DSE) and

Chittagong Stock Exchange (CES) (a) Equity Shares (b) Debentures (c) Mutual

funds.

What is DSE All Share Price index? How does one read the index?

The DSE All Price Index is a market capitalization weighted index comprising all

listed companies. Each stock has been given a weight in the index equivalent to itsmarket capitalization. The base was at 100. Daily price change in index securities

is captured in the market capitalization figure and reflected in terms of index

movement. The index value compares the days market capitalization vis-a-vis

base capitalization and indicates how prices in general have moved over a period

of time.

How many brokers operate on DSE and CSE?

The Dhaka Stock Exchange (DSE) has 195 SEC registered trading

members/brokers and the Chittagong Stock Exchange (CSE) has 124 registered

brokers. Many of these registered brokers have authorized representatives

operating on the floor on behalf of the concerned brokers of DSE or CSE. You

should execute your deal through a registered broker of a recognized stock

exchange or through a registered authorized representative.

How do I deal with a registered authorized representative?

You should your request in writing for purchase or sale of

shares/debentures/mutual funds. The authorized representatives on executing your

order furnish you with a purchase/sale note. This purchase/sale note originates

from the contract note which is issued by the main broker to the sub-broker. The

purchase/sale note would help in resolving any disputes with the authorized

representative.

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Conversations

What are the formalities for becoming a client of a broker/authorized

representative?

All investors should open accounts with necessary documentary support of proof

of identity and get the registration/account number. The features of this opening

an account is to reduce the chances of any disputes.

What is the maximum brokerage that a broker can charge?

The maximum brokerage chargeable is at present 1% of the trade value.

What is contract/confirmation note?

Contract note is a confirmation of trades done on a particular day for and on

behalf of a client. A contract note issued in the prescribed format and manner

establishes a legally enforceable relationship between the member and client in

respect of the trades stated in that contract note. Contracts note are made in

duplicate and the member and client both keep one copy each.

What are the points to be checked by an investors to check the validity of a

contract note?

Name and address of trading member, their SEC registration number, details of

trade like order No. trade No. trade time, security name, quantity rate, brokerage,

settlement no, signature of authorized signatory.

What is a Book Closure/Record Date?

The ownership of shares of companies traded on the stock exchange in freely

transferable by registration. However, shares are many times held by buyers

without sending it for registration to the company. In order to be entitled to the

benefits such as dividend, bonus, rights etc. announced by the company, a buyer

would need to send it for registration. The company announces cut off dates from

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time to time. The list of members on the companies registers as of these cut off

dates be the people entitled to the corporate benefits.

Conversations

What is no-delivery period?

Whenever a book closure or a record date is announced by a company, the stock

exchanges sets up a no-delivery period for that security. During this period,

trading is permitted in the security. However, these trades are settled only after the

no-delivery period is over. This is done to ensure that investors entitlement for

the corporate benefit is clearly determined.

What is an ex-date?

The first day of the no-delivery is the ex-date viz. If there is any corporate benefit

such as rights, bonus, dividend etc. announced for which book closure/record date

is fixed, the buyer of the shares on or after the ex-date will not be eligible for the

benefits.

How do I execute an order on the stock exchanges?

Select the broker you want to trade with opening an account and fulfill the other

formalities. Place orders with the broker in writing. Ask for the order confirmation

slip on the day the order is placed. Ask for trade confirmation slip on the day the

trade is executed. Ask for contract note at the end of the trade date. Ensure

smooth settlement of the trade by delivering securities and funds on time to your

broker.

What are the documents you should receive from your broker and when?

Order confirmation slip. After the order has been placed. Trade confirmation slip.

After the trade has been executed. Contract Note: with in 24 hours of the trade

being executed.

To what extent price of a share can increase or decrease in a day and during a

settlement?

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Standard upward and downward price limits over the previous days market price

applicable for each market day:

Previous days per share market price Limits

Upto Tk. 200 20% but not exceeding Tk. 35

Tk. 200 to Tk. 500 17.5% but not exceeding Tk. 75

Tk. 501 to Tk. 1000 15% but not exceeding Tk. 125

Tk. 1001 to Tk 2000 12.5% but not exceeding Tk. 200

Tk. 2001 to Tk. 5000 10% but not exceeding Tk. 375

Tk. 5001 and above 7.5% but not exceeding Tk. 600

What is settlement cycle?

Settlement cycle on the DSE/CSE is an account period for the securities traded on

the exchanges.

CLEARING AND SETTLEMENT PROCEDURE

Trading Procedure and Settlement:

Accounting Period Settlement DaySaturday to Monday Next Wednesday

Tuesday to Thursday Next Monday

If I have sold shares when do I deliver them to the broker?

You have to deliver the securities to the broker immediately upon your getting the

contract note for sale but in any case before the shares pay-in-day.

If have bought shares when do I pay money to the broker?

If you have bought shares, you have to pay-in-funds to the broker in such a

manner that the amount paid is realized before the funds pay-in-day.

When can I expect to receive funds/securities from the broker?

The securities and the funds are paid out to the broker on the pay-out day.

What should I do if I receive a bad delivery?

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All bed deliveries will have to be reported to the clearing house by the buying

broker.

Conversations

What are company objections?

An investors sends the certificate along with the transfer deed to the company for

registration. In certain cases the registration is rejected because of signature

difference, or if the shares are fake, forged to stolen or if theres is a court

injunction preventing the transfer of the shares etc. In such cases the company

returns the shares along with a letter, which is termed as an objection memo. All

such cases are identified as company objections.

What is proper transfer deed?

A deed of transfer is considered proper if it is:

(a) in the prescribed format (Form 117)

(b) dated by the prescribed authority (e.g. Registrar of Comaopnies) and is

validity period has not expired.

(c) duly signed by or o behalf of the transferor and transferee and complete in all

receipts.

How does the transfer of shares take place?

After a sale is effected the share certificate along with a proper transfer deed and

complete in all respects in sent to the company for transfer in the name of the

buyer. A transfer is complete in the books of the company after the transfer is

registered in the share transfer register maintained by the company.

What Should I ensure while handling over securities which I have sold?

You have to ensure that the transfer deed is of a recent date and not date prior to

the book closure date. Also, you have to ensure that any other particulars are

accurately filled in as contained in the share certificate and if there are any

corrections made for the information filled in by the seller, such corrections are

properly authenticated by all sellers.

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Conversations

What is it important to register the transfer of shares with the company?

All the corporate benefits like dividend, bonus, rights etc. announced by the

company are given to those persons whose names appear in the register of

members of the company as on the book-closure date or record announced by the

company. It is therefore important for the buyer to register the ownership of the

shares.

What are some of the common investor grievances?

Non-receipt of shares sent to transfer Non-receipt of corporate benefits Non-

rectification of bad delivery by the broker Non-receipt of funds/securities on

sale/purchase introduction of fake, forged and stolen securities Non-rectification

of company objections Contract notes not issued by the broker.

What will you do if you have any of the above grievances?

First you should inform your broker of the matter. See what he suggests. If you

are not satisfied put your complaints in writing to the authority of the stock

exchanges. if it is not solved. Apply with your grievances to the Securities and

Exchange Commission.

Rights and Obligation of an Investors

The right to access: the best price, the speediest service the right to get: Proof of

price, proof of brokerage charged, your money on time, your shares on time,

shares that are genuine the right for redress: against fraudulent price, against

unfair brokerage, against delays of money of shares, against investor unfriendly

companies the obligation to be systematic: open a proper account with your

broker; have early deal recorded on an enforceable contact note the obligation to

be correct: Keep your shares in good condition; Keep your signature verification

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records up to date the obligation to be timely: make sure you pay on time when

you buy; make sue you deliver shares in time when you sell; make sure you pay

your broker his brokerage charge in time; make sure to send shares for transfer in

your name in time.

Conversations

What safeguards does a shareholder have for his investment?

Apart from the normal risks involved in the ups and downs of the market, a share

holder in a listed company has the protection of a well organized market, the DSE,

CSE and the Securities and Exchange Commission (SEC) a statutory body

responsible for ensuring an orderly market and protecting the interest of investors,

among other things.

Buying in the P rimary Market

In order to buy shares issued by a company in the primary market, you will have to fill

out a special from, which is obtained from the brokers, the issuing company, or any

branch of a commercial bank involved in the particular issue of shares. Photo copies of

such forms could also be used.

in such a primary issue the minimum number of shares that can be applied for is usually

50, and applications for higher quantities must be for multiple of hundred.

Application duly perfected and accompanied by check, bank draft or cash as indicated

should be sent to a branch of a bank engaged for the purpose or to a share broking

company or the company issuing the shares as stated in the prospectus.

In the case of the issue of new shares which have a high demand, it is possible that the

amount of money the company is seeking from the issue would be found or subscribed

fully, before the closing date. Therefore, it is usually advisable to apply for shares in a

primary issue within the stipulated time of the prospectus.

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If the issue is over-subscribed the applicant will in due course receive a refund of the

money paid for not getting shares through lottery. If your application is accepted and

shares are allotted in your name you will be issued a share certificate by the company.

However, you will not be permitted to withdraw your investment form the company. This

because share investment as equities have no maturity dates as with debt obligations. The

Conversations

company in which you have purchased shares has not incurred a debt obligation by

issuing shares. further the Companies Act prohibits a company buying hack its own

shares.

You will in time earn a dividend, when the company declares dividends depending on its

profitability. Or else you may be allotted bonus shares or entitled to buy more shares on a

rights issue. However, if you wish to covert your shares into cash you can sell in the

Stock Exchanges.

19) Describe us the role of secondary market & situation of Bangladesh

Investor:

Role of Secondary Market-

Liquidity: Investors trade time and risk, buying and selling financial

instruments prior to maturity.

Search costs: Central trading locations reduce search costs.

Information production- Continuous trading : assets are priced daily

- Low cost : look for stock price online

Market discipline : addresses moral hazard issue of a firm

- Financial markets (FM0 react to bad news with lower stock prices

- Market for corporate control (MCC) lower stock prices make firms

good targets for takeover

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Secondary Market

Trade shares existing in the market.

1. Organized Exchanges most usual form of market, used to facilitate trading

between investors. Example DSE, CSE

2. Over-the-counter marked

- Trading is almost exclusively done though dealers who buy & sell for

their own inventories.

Conversations

- A geographically dispersed trading forum where traders are linked

through telecommunications (computer) systems

- Infinite number of communications pathways (no single point of

contact)

3. Third Market

- Trading of exchange-listed securities away from the exchange

- Institutional market, facilitating trades of larger blocks of

Markets for Trading

Four types of markets a DSE/CSE

1. Public Market

Ordinary market

Instruments are traded in normal volume

2. Spot market

Instruments are traded in normal volume under corporation action if

any

For special benefit of the investors

Saves time in transferring name while trading

For example, the a Company declares dividend and asks the owner of

this share to register their name within 24 th December 2005. So, an

investor who will buy a share after 21st December will not be able to

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register his name and will not get the dividend. For this, s/he needs the

help of Spot Market, which will register the investors name within

very short time.

Conversations

Markets in Bangladesh

3. Odd Lot Market

helps investors trading shares that are not lot

Price is different than public market (too high or too low, depending on

the market demand)

Odd shares occurs as companies offer bonus shares

4. Block Market

Instruments are traded in bulk volume

Amount or limit of lots are not fixed

Depends on market condition and availability of shares of that specific

company

2000 shares of Mithun Knitting company will not but 2000 shares of

IBBL will be traded here

Corporate investors are the main clients here

Secondary Market Participants

Investors:buyers and sellers of securities

Brokers: Earn commissions by serving as an agent on behalf of the buyer or

seller

Dealers: Take inventory on their own account in a traded asset to facilitate

trading

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Market-Makers: Dealer-brokers who are required to trade to keep market

moving smoothly through tow avenue streams:

- Order matching: earns commission by acting as an agent to the

investor

- Taking a position: earns the bid-ask spread by acting as a dealer. In an

idealized market makers would need only match orders and charge a

small fee.

Conversations

If trade imbalances occur (more buys than sells or vice-versa), then the market-

maker is required to take a position to smooth trading.

Types of Brokerage Firms

There are three types of brokerage firms:

- Full Service

- Discount

- Deep Discount

The types of firms differ according to the following factors

- Commission

- Research

- Advice and Services

Type of Brokerage Firms

Full-service brokerage firms provide exactly that, full-service.

They offer clients professional research reports and advice on what/when to

buy and sell. They may also offer the opportunity to participate in IPOs, unit

investment trusts, financial planning, and other investment products.

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Our Decision

-We will invest in IPO

-We will to the brokerage firm

-We will take suggestions from the broker

-We will select a company based on the criterias we discussed

-We will collect application form to open the account

-We will open the account

-We will give order to buy 100 shares for us

-We will be waiting for the lottery after the lottery if we allotted with the shares our

broker will be instructed to collect them.

Conclusion

We decided to invest in IPO as it is less riskier than secondary market. And as we are

totally new we cannot handle the volatility of price change in secondary market. So

primary market is best for us as the process is simple and easy. After buying IPO we wil

sell it in secondary market.

Source Of Information

1)Interview with the investor-Wasim Haider

2)Internet

3)Course Materials

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Letter of Transmittal

20 July 2006.

Hasina Sheykh

Lecturer

Department Of BankingUniversity Of Dhaka

Dear Madam,

We are very happy that we have been able to submit you our assignment on

Investment Banking (Course-B-504). Here we try to explain how we can

invest in the capital market for the first time, which steps we have to follow

and what will be our decision regarding investment. We consult with an

investor of IPO & we got a clear idea about investing in primary market.

Thanking you.

Yours truly,

Tania Chowdhury

MBA Roll-6-220 (On Behalf of Group-8)MBA

Department Of Banking

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University Of Dhaka

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