Background of Dse

1.2 Background of the Study

Security market of Bangladesh has been flourished during last few decades. It results due to the adoption of privatization policy. Until, Government sector owned, controlled and operated financial sector of Bangladesh with the objective of allocating funds to priority sectors.. Having affected by the worst financial crisis in 2008 the economy of Bangladesh registered 5.88 per cent growth during the year 2008-09 as compared to 6.2 per cent in 2007-08. Bangladesh economy maintained steady growth over the last few years but in 2008-09 it has been the victim of global financial meltdown 2008. But the financial market of the country has remained unaffected, as it is isolated from the global financial markets. The foreign portfolio at the country’s premier bourse stood near about 2 per cent, which has been the major reason that Bangladesh capital market has not been affected. On the other hand, Bangladesh Bank took prompt and time-bound measures to safeguard the banks and other financial institutions from the crisis. Actually, financial crisis of 2008 has started denting Bangladesh economy in the fiscal year 2009-10, as export earning has started declining. Manpower export has declined but amount of remittance inflow has made new record US$ 9.76 billion in 2008-09. But amid many formidable obstacles the economy of Bangladesh has witnessed mixed reactions in financial and economic indicators. Like many other countries Bangladesh government, after assuming power on January 06, 2009, also adopted stimulus package worth of Tk 3,400 crore and also Tk 5,000 crore as fiscal stimulus in the budget 2009-10 to save the different sectors of the economy. The central bank in line with the government instruction has also reduced the interest rate on bank loan, which will also help the country’s trade and commerce related activities. The government has placed due importance in the budget for 2009-10 fiscal year to the development of the capital market....