Internship Report Proposal

On

“The Role of Fundamental Determinants on Company Performance: The Case of Lanka Bangla Finance.”

Prepared For:

Moh. Sogir Hossain Khandoker Associate Professor Department of Finance Jagannath University, Dhaka

Prepared By S. M. Galibur Rahman

Id: 07882710 2nd

Batch

Department of Finance Jagannath University

Faculty of Business Studies

24-09-12 Moh. Sogir Hossain Khandoker Associate Professor Department of Finance Jagannath University, Dhaka Subject: Request for the acceptance of the internship project proposal. Sir, I have the gratification to put forward my internship report on Lanka Bangla Finance as a requirement of internship program of undergraduate degree in Department of Finance, Jagannath University. In accordance to your instruction, I am proposing to conduct a report titled “The Role of Fundamental Determinants on Share Price: The Case of Lanka Bangla Finance".”.

The non-bank financial institution (NBFIs) constitute a rapidly growing segment of the financial system in Bangladesh, the NBFIs have been contributing toward increasing both the quality and quantity of financial services and thus mitigating the lapses of existing financial intermediation to meet the growing needs of different types of investment in the country. As I am doing my intern in research and analysis department, so I intended to find out the actual scenario of how a company reflects its fundamental aspect through its price and how the industry growth and trend affect the company price.

I will put my best efforts to apply all the theoretical concepts of different financial and statistical concepts in real life situation. The details proposal has been attached along with this letter. If you need any clarification, I will be obliged to provide you with further information.

Sincerely yours

S. M. Galibur Rahman Id: 07882710 2nd Batch

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1. Abridge Introduction to the Study

1.1 Title of the Study:

As an integral part of the Undergraduate Program, the authority includes Internship Program in the B.B.A. curriculum to assist students to have a practical overview with the Bookish concept and should prepare a Report. Furthermore internship program is carried on to provide the students an on the job exposure and to match up the theoretical concepts with the real life situation. This report was prepared as a requirement of that internship program in the Department of Finance, Jagannath University, Dhaka. Under this instruction of internship program, I was placed at Lanka Securities Limited, Corporate Office, Dhaka and would like to be assigned to conduct study on “The Role of Fundamental Determinants on Company Performance: The Case of Lanka Bangla Finance".”

1.2 Background of Lanka Bangla Securities Limited (LBSL):

The capital market of Bangladesh is in emerging situation. The prospectus of Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) significantly depends upon the articulate depth research regarding the listed company and industry. Lanka Bangla Securities limited, the number 1 security house in Bangladesh is significantly contributing in the research segment. Lanka Bangla Securities Limited (LBSL) is a subsidiary of Lanka Bangla Finance Limited and a leading equity brokerage house in the country with a diverse clientele of institutions, high net worth individuals, foreign funds and retail investors. The company commenced stock broking activities in 1997 and has over time become the largest stock broking company in the country having developed a strong team of highly skilled and experienced professionals.

1.3 Rationale of the Study:

The report titled “TheThe Role of Fundamental Determinants on Company Performance: The Case of Langa Bangla Finance"..” is prepared as an integral part of the internship program of the undergraduate degree in Department of Finance, Jagannath University. To get acquainted with different financial model and theory theoretical knowledge is not enough for a student of finance department. There always exists massive gap between theoretical knowledge and its practical implementation. This report is to bridge up this gap. This report will be helpful to understand the relationship among share price of a company, its fundamental aspects and its industry. And also the NBFIs industry performance trend will be drawn.

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2. Objectives of the Study

The objective of the study may be viewed as:

General objective Specific objective

2.1 General Objectives:

This internship report is prepared primarily to fulfill the Bachelor of Business Administration degree requirement under Department of Finance, Jagannath University and get an overall idea of NBFIs sectors and its activity specially the performance of Lanka Bangla Finance.

2.2 Specific Objectives:

More specifically, this study entails the following aspects: Company Analysis To analyze the profitability of LankaBangla Finance Limited with the help of different

statistical tools To test the predetermined hypothesis relating to the financial performances of LankaBangla

Finance Limited, only regarding profitability NBFIs industry analysis Impact of industry on Lanka Bangla Finance.

3. Significance of the Study

Findings of this study can append to the existing body of the literature, and can give out as a starting point on which future studies can be done. On the realistic aspect, this study may possibly facilitate decision makers of LankaBangla Finance Limited to focus on the major financial activities that may amplify the NBFI ranking and financial performance positions comparing with other NBFIs. Such information should assist the management of this NBFI in creating apposite financial strategies for aligning the required planned financial performance.

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4. Methodology

The data for this study was gathered from the annual financial statements published by the LankaBangla Finance Limited in some selected internal magazines to accomplish the aforesaid objectives. The Quarterly and annual data for the selected NBFI during 2008 to 2012 are used in order to assess the profitability of the bank. Any progress of LankaBangla Finance Limited thereafter is thus out of the scope of the report. Help of other sources like annual report, magazines, brochures, journals, newspapers, websites, etc. have also been chosen whenever found necessary. This paper is based on secondary data collection. In processing the data, various methods of conventional statistics were deployed. Frequency distribution, measures of central tendency and dispersion, time series analysis, simple correlation and multiple regression analysis, correlation matrix and ANOVA in some cases calculated data are presented in graph to give the reader a better understanding of financial components. Kearl-Pearson correlation coefficient also used to investigate the correlation between the variables at 5% level of significance according to the SPSS software package. Microsoft excel was also used to produce some graphs and charts.

4.1 Primary Sources of data: The primary data of this report were collected through:

Direct interview & Conversation with the research analyst of the Research Department.

Practical experiences obtained from the corporate office of LBSL

Expert’s opinion.

Official records.

4.2 Secondary Sources of data: I have gathered the secondary data via following sources:

Annual report of Lanka Bangla Finance ltd.

Printed outlines and documentation supplied by Lanka Bangla Finance ltd.

Annual Financial Statement of last 4 years of different NBFIs.

Analysis report of LBSL research and analysis department.

Website of Lankabangla Finance (http://www.lankabangla.com/).

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5. Hypothesis

As major portion of my research paper concentrate with the price of the share of company and its relationship with company fundamental and how company price reacts with its industry trend, so measuring the correlation among all variables is the key to job done.

i. I believe there is relationship and performance is affected by other selected variable factors.

Null Hypothesis: There is no correlation between the financial performances measured by Net Profit and the independent variables (Total Assets, Total Liabilities, Total Equity, Term Deposit, Total Investment Portfolio, and Turnover of Share Trading by LBSL, Operating Revenue and Operating Expense) Alternative Hypothesis: There is positive correlation between the financial performances measured by Net Profit and the independent variables (Total Assets, Total Liabilities, Total Equity, Term Deposit, Total Investment Portfolio, and, Operating Revenue and Operating Expense) Alternative hypothesis will be accepted if the coefficients of correlations of selected variables are significant at ‘0.05’ level of significance. Otherwise, null hypothesis will be accepted.

5.1 Variables:

Dependent Variable Independent Variable

Financial Performance (Net profit) Total Assets, Total Liabilities, Total Equity, Term Deposit, Total Investment Portfolio, Operating Revenue and Operating Expense

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6. Data Analysis & Presentation Technique

In order to analyze gathered data, I plan to use statistical software like SPSS that will run z-test, t-test, regression and such. Besides SPSS I will use MS-Excel to generate charts and graph of different ratio analysis. The data will be presented through graphs for better visual understanding.

7. Limitation of the study

I have faced some usual constrictions throughout my internship program to some extent that I are

presented as follows:

Primary data is always hard to work on because of authenticity.

Time is another hindrance to prepare a quality report.

Power failure is another main restraint to prepare this report

And scarcity of information is always a common hindrance to prepare any types of report.