Examples of Public Property in India Essay

* RPBRL has been in operations for the last 20 years and known as one of India’s leading manufacturers and exporters. * RPBRL is a Government approved and ISO 9001:2000, HACCP Certified Company. * RPBRL is supplying Basmati Rice to clients in Saudi Arabia, Kuwait, Yemen, Bahrain, Doha, Dubai, Cyprus, South Africa, Switzerland, Germany, France, Mauritius, etc. * It have 250 employees in all offices and representatives in 19 countries. * It is one of the successful organizations in the Agro field. * For more than 20 years Chairman Sh. R P Singhal has been actively involved in manufacturing and exporting agricultural products to several markets. VISION: To support sustainable development of villagers, empowerment of women and children and creating employment for the poor farmers. Post Graduate Institute of Medical Education and Research (PGIMER) Established:1962 Type: Public Director:Prof. Yogesh Chawla Location:Chandigarh, India PGIMER is a renowned medical and research institution of Asia.It is recognized for its education, medical research and training facilities as well as for its graduates. Himachal Pradesh University : HPU is a public non-profit university located nearly 5 km away from the town of Summer Hill, in the vicinity of the Indian Institute of Advanced Study. It is wholly financed by the Government of Himachal Pradesh and the University Grants Commission, New Delhi. Established:1970 Type: Public Chancellor:Urmila Singh Location:Summer Hill, Shimla, Himachal Pradesh, India Affiliations:UGC, NAAC, AIU Dharohar Haryana Museum: It is a centre of Haryanavi Folk Culture and Heritage of Haryana. It was inaugurated by Ch. Ranbir Singh on 28th April 2006 in the presence of Ch. Bhupinder Singh Hooda, Chief Minister, Haryana. More than 3000 rare and antique artifacts available at Dharohar. It facilitate the Research Scholars, for the research in the field of folk culture, heritage, literature, architecture, music, traditions, customs, archaeology, education, economics, history, political science, and public administration. Daily Ajit Daily Ajit is the world’s largest selling Punjabi language newspaper.[citation needed] The newspaper is owned by Hamdard family who are Sainis.[1] The newspaper was founded in 1942 in Urdu language when the late Sadhu Singh Hamdard became its first editor.[2] Veteran journalist and ex-Rajya Sabha member, Dr. Barjinder Singh Hamdard, is the current Editor-in-Chief of this newspaper. History At the time of Independence, Himachal was formed as a â€Å"C† class State by merger of 33 hilly States of North-Western Himalayas on 15th April, 1948. Passenger and goods services were nationalized in the Pradesh in July, 1949. During the year 1958, a Corporation, â€Å"Mandi-Kullu Road Transport Corporation† was floated jointly by the Govt. of Punjab, Himachal and Railways under the Road Transport Corporation Act, 1950 basically to operate on the joint routes in the States of Punjab and Himachal. With the re-organization of Punjab State in 1966, few hilly areas of Punjab were merged in Himachal and operational areas of Mandi-Kullu Road Transport Corporation came entirely in the expanded State of Himachal. On 02.10.1974, Himachal Govt. Transport was merged with Mandi-Kullu Road Transport Corporation and was renamed what even today is known as Himachal Road Transport Corporation. Growth After the formation of Himachal on 15th July, 1948 the network of roads had received top-most priority of the Government. At present the road network is widely spread in Himachal. In 1974 total routes operated by HRTC were 379 which have grown to 2119 in March 2010 and the fleet strength has grown from 733 to 2005 in March 2010. Bus remains the sole mode of passenger transportation in the state as railways have a negligible presence in the State. The narrow gauge lines connecting Pathankot with Jogindernagar and Kalka with Shimla are so slow moving that a very small percentage of traffic is carried by them at present; thereby leaving the onus of carrying the passenger traffic on to bus transport. Open Access land Under the Countryside and Rights of Way Act 2000 (CROW), the public can walk freely on mapped areas of mountain, moor, heath, downland and registered common land without having to stick to paths. People across England now have approximately 865,000 hectares of land across which they can walk, ramble, run, explore, climb and watch wildlife as they are given the freedom to access land, without having to stay on paths. The new rights, for which people have been campaigning for over 100 years, came into effect across all of England on 31 October 2005.

President of the United States Essay

The President of the United States, the chief executive officer of the federal government, the leader of the executive branch, and the commander in chief of the armed forces has certain constitutional powers. How much power does he really have? Does he have too much? Does he have too little, or not enough? In my opinion, I believe that the President of the United States of America has just enough power to run our country, deal with foreign and domestic policies, and fight the War on Terror In this essay, I will discuss my opinion, what the president’s powers are under the Constitution, and whether or not the president’s role has expanded beyond these powers in domestic and foreign policy. Under Article II, Section 2 and Section 3 of the Constitution, it outlines the powers and duties of the president. The President holds two main roles: he is the Head of State and is the Chief of Government. The powers and duties that fall under these roles are identified as two main sources of power; his expressed powers and his delegated powers. The expressed powers are specifically defined powers that cannot be revoked by Congress or any agencies without an amendment to the Constitution. The delegated powers are the powers given to the president by Congress. Examples of expressed powers are the authorization to make treaties, grant pardons, and nominate judges and other public officials. The president also has the power to receive ambassadors and command the military forces of the United States. The delegated powers under Article II of the Constitution state that the President â€Å"shall take Care that Laws be faithfully executed†. These powers delegate that the President will only have the authority to carry out decisions through identification and development. Out of every country in the world, our president is the only one with both roles as the Head of State and Chief of Government. A third power, that is not stated in the Constitution, but is claimed occasionally by the President are inherent powers. The inherent powers are said to stem from â€Å"the rights, duties and obligations of the presidency†. These powers are exercised by presidents in times of war or national emergency. One of the President’s biggest powers that are applied as part of his inherent powers is the power to declare war. The President’s express powers are divided into five categories. The five categories are: Military, Judicial, Diplomatic, Executive, and Legislative. Beneath the Military category, it affirms that under Article II, Section 2; the President is provided the power as â€Å"Commander in Chief of the Army and Navy of the United States and of the militia of the several States, when called into the actual Service of the United States. † Beneath the Judicial category, it affirms under Article II, Section 2; the President is provided the power to â€Å"grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment.† Beneath the diplomatic category under Article II, Section 2; the President is provided the power â€Å"to make Treaties by and with the Advice and Consent of the Senate. † Additionally, under Article II, Section 3; the President is provided the power to â€Å"receive Ambassadors and other Public Ministers. † Beneath the Executive category, it affirms under Article II, section 3; the President is authorized to see to it that all laws are faithfully executed. Additionally, Section 2 gives the chief executive power to appoint, remove, and supervise all executive officers and to appoint all federal judges. Under the Legislative branch, it affirms under Article 1, section 7 and Article II, Section 3 that the President has the power to participate authoritatively in the legislative process. The military authorities granted to the President are amongst the most important powers granted to someone leading the United States of America. As the President of the United States, you are granted the position as commander in chief. The position of commander and chief deems the President the highest military authority in the United States with control of the entire defense establishment. Additionally, the President is head of the nation’s intelligence network, which includes the CIA, NSC, NSA, and the FBI, which are among the most well regarded intelligence networks in the world. The constitution is the main principle in giving President’s the power to declare war; however, many Presidents’ decide to capture this power for themselves without consulting Congress. This is a resolution of Congress that the President can send troops into action abroad only by authorization of Congress, or if American troops are already under attack. For example, when President Bush responded to the attacks on the World Trade Centers in New York on September 11th, 2001 he ordered a major military campaign to overthrow the Taliban regime in Afghanistan. Again in 2002, President Bush ordered a huge American campaign against Iraq to overthrow the Iraqi dictator, Saddam Hussein, whom he believed had links to the terrorist network that attacked the United States. President Bush publically made it a point to state that he did not need Congress’s authorization to declare war against organizations deemed an imminent threat against the United States of America. This is what is called the War Powers Resolution. The Judicial Powers granted to the President of the United States give him or her power to grant reprieves, pardons, and amnesties. Additionally, it involves power over all individuals who may be a threat to the security of the United States. Presidents may use this power to grant a reprieve on behalf of a particular individual. An example of reprieve for one particular individual would be when President Gerald Ford granted a pardon for former President, Richard Nixon, for â€Å"all offenses against the United States which he †¦ has committed or may have committed.† The Diplomatic Powers declare that our President is also our countries â€Å"Head of State†, or its chief representative when dealing with other countries. The title of Head of State grants the President the power to make treaties for the United States. The power of receiving Ambassadors and other Public Ministers was pushed through Congress under President Washington’s leadership in 1793. This power allows the President almost unrestricted authority to review the claims of any new ruling groups to determine whether they indeed control the territory and population they claim is theirs. The Executive Power, which is another one of the most important power’s as chief executive states that the President must ensure that all laws are faithfully executed. Additionally, this appoints the President to assign, remove, and supervise all executive officers and federal judges. These powers, under the Constitution, basically appoint the President as the true Chief Executive Officer of the United States. Another component the President is granted as chief executive is â€Å"executive privilege†. Executive privilege claims that confidential communications between the President and close executives are to be kept confidential and are not to be revealed without express permission for the President. The Legislative Power is broken down into two Constitutional provisions. The first of these provisions is under Article II, Section 3 of the Constitution and it states that the President â€Å"shall from time to time give to the Congress information of the State of the Union, and recommend to their consideration such measures as he shall judge necessary and expedient.† The second provision states the President has the power to veto. The veto is the President’s constitutional power to turn down acts of Congress. Other powers that are granted to the President are his â€Å"Delegated Powers. † These powers are not found in the Constitution but are product of congressional statutes and resolutions given to the President over the last century. The delegation of powers has been an almost inescapable consequence of the expansion of government activity in the United States. In conclusion, my belief is that the president has just enough power to run our country, deal with foreign and domestic policies, and fight the War on Terror. Because of the President’s two main sources of power, which are his express powers and delegated powers, it enables him to fulfill his duties and obligations without having too much power over our government and legislation.

History Essay Example | Topics and Well Written Essays - 1250 words - 14

History - Essay Example Fundamentally, in the 20th century Russia was an exceedingly subjugated country managed by the Czars. Ruled by feudal tenets of dictatorship, the citizens’ of Russia were terribly oppressed, cold, poor, and starving, in addition they had no authentic course or hope. In essence, Russia had never undergone any open-minded revolutions, which were occurring in other parts of the globe. This made Russia remain as one of the real last remnants of the medieval European-American society. The rebels through acts of rebellion, revolutionist, and terrorism overthrew the Czars government. To start with, the Bolsheviks and Lenin were outside Russia when the revolution took place. Some of them were Russians while others were not Russians. They were socialists and Marxists revolutionaries existing in Europe studying sociology, science, economics, history, and many more from a Marxist viewpoint. The Bolsheviks did not necessitate the removal from power of the Russian government, after the coup, they came in with the intention of putting Marxist hypothesis and ideology to practice. Their major plan was to develop Russia into a social state through social revolution and spread their ideologies to Europe, America and eventually the whole world (Wiesner-Hanks & Wheeler 2007, 67). This portrays a major difference between the French revolution and the Russian revolution. Foreigners played a major role in the Russian revolution while only the French participated in the French revolution. Eventually, the Bolsheviks managed to overthrow the residual powers of Czars authoritarianism in October revolution. They began reforms through establishing legislative assemblies called the Soviets. The same way the French came up with representative units called the constituencies. These soviets consisted of openly elected officials who were in charge of the affaires of the citizens including peasants, soldiers, and workers. To add to that, they

International business strategy Assignment Example | Topics and Well Written Essays - 3250 words

International business strategy - Assignment Example These large firms account for holding more than 90% of the world’s consulting market. Entering into new markets or acquiring the market share of competitors was one of the leaping strategic challenges before the firm. Moreover, they were already holding great cost and resource advantage in some of the largest emerging countries like India, Philippines and other nations like Eastern Europe and Russia (Plunkett, 2007, p.119). The management of WCS also was faced with a dilemma. This was choosing the right or appropriate model from amongst the several trends and models which different organizations across the globe followed. The challenge was choosing between the following options. First, was to create and generate the consulting capability of the firms and then spin off as a completely independent and different company having no operational connectivity with the parent organization. The second option treated consulting capability as a captive unit. This is followed by the off-sh ooting the existing units of businesses which continues to evolve their own consulting capabilities in the global market. However, units operate under the strong guidance and supervision of the parent organization and uses operations such as human resource management and marketing management from the parent organization itself. After much of the deliberations, the leaders decided that it would need the best features of the two models. This consequently generated the concept of a federated structure. The idea was to provide a certain amount of fundamental autonomy to the consulting business of the firm while maintaining a loose association with the parent organization. According to the organizational leaders such...The challenge was choosing between the following options. First, was to create and generate the consulting capability of the firms and then spin off as a completely independent and different company having no operational connectivity with the parent organization. The secon d option treated consulting capability as a captive unit. This is followed by the off-shooting the existing units of businesses which continues to evolve their own consulting capabilities in the global market. However, units operate under the strong guidance and supervision of the parent organization and uses operations such as human resource management and marketing management from the parent organization itself. After much of the deliberations, the leaders decided that it would need the best features of the two models. This consequently generated the concept of a federated structure. The idea was to provide a certain amount of fundamental autonomy to the consulting business of the firm while maintaining a loose association with the parent organization. According to the organizational leaders such as Mark Payne, this would be the most suitable or appropriate structure for the company. However, creating this structure would be a great challenge for the company with regards to the ex tent of autonomy it would rest with itself and the degree of coupling it would maintain with its parent organization. The positioning of the firms in the strategic consulting space along with the existence of such firms as BCG and McKinsey was challenging and not very easy.

The War in Vietnam Essay Example | Topics and Well Written Essays - 1250 words

The War in Vietnam - Essay Example The basis of such view are what elicited heated debate and controversy over the motive and gain of the US government in engaging in Vietnam War. In this regard by not understand the lopsidedness of commitment between the Vietnamese communists and the United States, the anti- Vietnam War activists claim that this paved the way for causing the most egregious blunder a nation going to any war can make.. Those that opposed the war then felt that it was obviously unnecessary, immoral or illegitimate, and there was a consensus on the nature of the war. During the initial years of the War, there was an intense dispute within civilian and military decision-making institutions mutually over the fact that the conflict was predominantly a conventional cross-border aggression or an internal insurgency. Regrettably, U.S. foreign policy advisers in the 1960s did a supreme action of miscalculation by getting involved directly in the Vietnam conflict yet the intervention proved calamitous and dreadful. There is a general consensus among the public particularly the section opposing the war that the war violated a set strategic injunction for committing military of the U.S. to a large-scale land conflict on the Asian mainland. The question thus was the war justified and was it worth such expenditure and risking the lives of the young soldiers? More seriously, in analyzing the argument was the fac t that the Vietnam War achieved very little yet a lot had been pumped in terms of cost. Anti-War theorists argued that the United States should not have invaded Vietnam since Vietnam’s political battles and internal conflicts did not directly impact or influence America. Despite the fact that U.S. politicians and leaders and military experts in one spirit agreed that Communism had at that time infringed on political freedoms and violated democracy, the war in Vietnam presented no direct threat to the government of United States or to

Morgan stanly Essay Example | Topics and Well Written Essays - 2750 words

Morgan stanly - Essay Example The headquarters is located in New York City, Manhattan, and the representatives of the company, as well as subsidiaries can be found in 42 countries. Total assets that company manages or supervises, reported by the company, total $ 304 billion. The company was established in September 1935 by Henry Morgan, Harold Stanley, and others. The establishment was stipulated by the Glass-Steagall Act, that required the proper division of the banking and investment activity of the financial organizations. As Chiou and Larson (2005) emphasize the first operational year appeared rather successful, as the company managed to gain the 24% of the market share (which involved up to $ 1 billion) in managing the public offerings (up to 70% of the company’s assets) as well as private placements. In the end of 1930s the company participated in the industrial development of the USA by offering $ 100 million debentures for the US Steel Corporation, as well as obtaining the rail syndicate in 1939. T he 1950s period is considered as quite notorious for the financial structure of the company, since the company was involved into the banking activity by co-managing the World Bank’s bonds. ... in the same year, and entered the real estate business by this merger. In 1990s, the company added another financial management approach, and started serving like the underwriter for most technical and scientific initiatives. Therefore, Morgan Stanley served as the key underwriter for Netscape, Cisco, Compaq, Dolby Laboratories, Brocade, Google and others. The core products that the company offers for the financial services market involve Global Wealth Management, Investment Management and Consulting, as well as working out proper and relevant management strategies for the institutional financial securities. Industry Analysis Financial services that are offered by the Morgan Stanley and competitors are generally intended to regulate the financial flow, stabilize the economic and financial global situation, as well as secure the managed financial reserves, debts, and investments from financial catastrophes and crises. Therefore, the financial services industry involves such spheres as banking, financial insurance, managing security, investment fund controlling, retail, payment systems development. Considering the circumstances of the 2008 financial crisis, stabilization, and reformation of the global economic system is regarded as the priority for most experienced economists. They make emphasis on developing effective financial management tools, that financial companies possess. (Horrigan, 2004) In accordance with the estimates, offered by Halah Touryalai (2013), Forbes observer, the Morgan Stanley controlled up to 40% assets of the retail clients in 2012, and the forecasts for the years 2013-2014 expect that this share will suffer 16% decrease. RBC Wealth Management’s (regional assets broker) market share, in its turn is

Is human evolution over Essay Example | Topics and Well Written Essays - 1750 words

Is human evolution over - Essay Example The creature referred to as the pre-hominoid primate was of the primate species; the same category of mammals as monkeys, apes and humans. It had a canning semblance with the animals that are today known as monkeys, but was neither a monkey nor an ape. Scientists have over the years endeavoured to provide evidence that these higher order primates are the species that in a gradual process developed into humankind. In retrospect, this theory poses the important question of whether human evolution continues to date or not. This paper seeks to shed light on this matter, through a detailed analysis of various literatures. Keywords: Theory of evolution, human evolution, species, primate. Introduction Evolution refers to the process of a string of natural modifications that result in a species of a population of organisms and the process that causes the species to develop, adjust to their surroundings, and eventually die out of becoming extinct (Smithsonian National Museum of Natural Histor y, n.d.). All species including humans have developed through the process of biological evolution. In species such as humans and other organisms that undergo sexual reproduction, the term species is used in the description and identification of a cluster whose mature members frequently reproduce bringing about fertile offspring. These offspring also have the ability to reproduce (Smithsonian National Museum of Natural History, n.d.). Evolution follows when the genetic material that makes up an organism and is received from parents changes; that is, the chemical molecule known as the DNA. Genes are the portion of the DNA that is responsible for the production of proteins (Smithsonian National Museum of Natural History, n.d.). Information borne in the DNA changes through a process of mutation, and as a result of this mutation, there is influence on particular genes in the body or the conduct of an organism. As a result of this, the survival and reproduction of an organism is influence d by its genetic make-up and its genetically acquired attributes (Smithsonian National Museum of Natural History, n.d.). Human evolution refers to the drawn-out progression of change, which facilitated the development of people from apelike progenitors. Scientific evidence has revealed that the physical and developmental attributes shared by the entire human species originated from apelike predecessors and evolved over a period of time (Smithsonian National Museum of Natural History, n.d.). According to the American Museum of Natural History (AMNH), the first affiliates of the human species began the evolution process in Africa, roughly six or seven million years ago (n.d.). This species was known as the Hominidae. Their behaviour and way of life was similar to that of the primates from which the species of gorillas and chimpanzees evolved. They could often be found on trees but were different from their primate counterparts due to their ability to facilely walk on two feet rather t han on fours, like the other primates (American Museum of Natural History, n.d.). This is a characteristic that researchers on human evolution distinctively associate with the human species. Today’s species of humans to which we belong is known as the Homo sapiens and is an evidence of the vivid evolutionary history that the human species has undergone over a period of more than 150,000 years, since

Perceived vs. Real Traits.What Would You Do Essay

Perceived vs. Real Traits.What Would You Do - Essay Example As a part of the project, a lot of drawings and diagrams were to be made. We had a team leader who was supposed to assign each member with a particular task of the project. In fact, I am a good painter and I am good in drawing too. However, the job of drawing was given to another student who was well below mediocrity in drawing as the leader could not recognize the skills in me. In addition, the task given to me was to develop a slogan related to the theme of the project; mere literature work I was very poor at. From my appearance, what he could perceive was that I was a good writer, thus I was forced to perform a task that in fact does not suit me. To prevent the issue of perceived traits, it is highly necessary to promote communication, understanding and most importantly, a friendly atmosphere. It is highly necessary to improve the team’s understanding and acceptance of diversity for harmonious functioning of the organization. Heermann (1997) suggests a method named Personal Mandala to let the team members know each other.

Identifying Problems and Offering Solutions Essay

Identifying Problems and Offering Solutions - Essay Example For instance, if one of the students was making noise in class, Nick would candidly to stop talking in class because that was the rule. This quite irritated his classmates and hence got him on the wrong side of the school bullies. They would spit in his lunch, knock over his books, call him names such as gay and faggot, and this really hurt his pride. Unfortunately, when Nick’s parents complained to the school authorities about their son’s predicaments, all they got was nothing more than ‘boys will always be boys’ or ‘we’ve done all we can’. One unfortunate morning, Nick Perry changed his pajamas and wore his favorite T-shirt and pair of jeans. Having had enough, Nick strapped a belt around his neck and hanged himself from the top of the shelf of his closet. When his father found him, it was too late to save him. Nick’s life had been cut short at his young age. Bullying in schools is a global problem and as Nick’s suicide case shows, it can have dire consequences. This article therefore looks into the causes of bullying in schools, its impact on students, the short and long term effects it has on the bullies and victims before discussing some of the strategies such as revision of school policies as solution to bullying in schools. Bullying can be defined as aggressive behaviors or actions that are done with the intent of making the victims feel belittled or hurting them. Bullying in schools can further be described as unwanted behaviors among students driven by either perceived or real imbalances of power. Bullying bears the following characteristics: Imbalance of power- the students who act as bullies, use the power at their disposal such as physical strength, popularity, seniority, or access to some embarrassing information about their victim, to control others. However, this imbalance of power is subject to change from time to time depending on the situation. It has to be

Florida Emergency Response Plan Essay Example | Topics and Well Written Essays - 1750 words

Florida Emergency Response Plan - Essay Example However, the question is now to judge whether what is on paper is as good when it is tested by nature. Based on the experience of Hurricane Andrew, the federal government and its local counterparts have implemented the need to formulize specific plans and operating procedures to cope with these calamities but the Andrew experience has now been overshadowed by another Hurricane. Katrina hit the Bahamas, South Florida, Cuba, Louisiana, Mississippi, Alabama, Florida Panhandle, and most of eastern North America on August of 2005 costing the US almost 82 billion in damages and the lives of 1836 people ("Hurricane Katrina", 2006). This happened after the requirement of each state to have its own emergency response systems and the institution by the federal governing bodies solely focused on did after preparation and mitigation. The devastation brought on by Hurricane Katrina most recently has further emphasized the need to have these disaster plans carefully examined, updated and monitored . The Florida Fire Chiefs' Association has created the FFCA Statewide Emergency Plan (SERP) is an effort to coordinate and mitigate response during emergencies. It is not limited to situations brought on by hurricanes that frequent the state but also provides standard operating procedures for various types of emergencies either brought by natural or contrived circumstances. It is based on a collective of experience from emergency services and the methods that have been established during the ordinary course of their service. The FFCA SERP covers local, county, state and federal level of intervention that delegates primary accountability with the lowest level of government and assistance can be requested following the same hierarchy the apex being Florida Division of Emergency Management (DEM)Assessment of damages or calamity costs is evaluated by the Rapid Impact Assessment Teams(RIAT) which will also be the basis of declarations of state of emergency by the Governor which will in turn initiate the State Emergency Operations Center (SEOC) that will serve as the coordinating body of county-based emergency operations centers. In the event that local and state resources prove to be inadequate, the Governor may seek the assistance of the Federal Emergency Management Agency (FEMA). At the same time, existing government agencies may be asked to extend their functions as may be required by the situation. The other key elements that have been established through FFCA-SERP are deployment time frames, pre-identified strike teams, and pre-staged resources. Another key element to the plan is the considerable focus on the pre and post event concerns. As preparation for any event it is a requirement that a proper assessment of anticipated needs, both supplies and services, is done and that each level shall consider these as current requirements. However, even if emergency response primary follows a hierarchy, counties are encouraged to support and coordinate with each other closely at all times. Consequently, the manner of dealing with reimbursements, service rates of personnel, equipment rates and other expenses, has already been established. Disasters and Realities It has been claimed that Hurricane Andrew laid bare the

Sales Marketing Plan Essay Example for Free

Sales Marketing Plan Essay Marketing is one of the most important aspects of a business. According to Peter Drucker â€Å"There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customers so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available. † (Peter Drucker, Marketing Management, Philip Kotler). In this report, we have planned to market the service ‘Hair care’ by opening an Hair Salon in Silver spring, USA. We have analyzed different marketing strategies and designed a marketing plan for the same. SLP 01 1. NAME, LOCATION amp; NATURE NAME: â€Å"Looks† Location: Silver spring, Montgomery County, Maryland, USA Nature: ‘LOOKS’ will be one stop solution that will allow the entire family to have their hair needs satisfied in one convenient location. It will serve men, women, and children and it will accept appointments as well as walk-ins. ‘LOOKS’ will also sell premium hair care products. It will focus on serving the entire family in one quick, convenient visit. It will excel due to its attention on their clients, so as to build a long term relationship. Through unheralded customer attention, ‘LOOKS’ will slowly but surely gain market share as it services the entire family, creating long-term relationships. Being on one of the best location of Silver Spring, it will attract a lot of traffic. 2. SELF-ANALYSIS The US salon market accounts for approximately 60 billion dollars. Looking stylish, trendy and beautiful is one of the major concerns of the people in US today and providing this, forms the strength of â€Å"Looks†. As the mission of â€Å"Looks† aligns with this need of the market and as it has comparatively higher competency in the world of fashion it is a strong player. 3. CUSTOMER ANALYSIS The population of Silver Spring is 78,488, with a growth of 2. 5%. The population of Silver Spring consists of 48% males and 52% females. The immediate geographic target of LOOKS is Silver Spring and its neighboring communities of total 250,000 of population. Approximately 12 miles geographic radius is in need of the offered services. The total targeted population 100,000. Baby boomers, Gen-Xers and baby boomlet and the young generation are the groups that are targeted by ‘LOOKS’. 4. ANALYSIS OF  PRIMARY COMPETITORS The location chosen offers very less competition or no competition. Though there are two major competitors which LOOKS has to compete with. Ebony Barbers Unisex ;amp; Fenton Barber Shop are the two major competitors of LOOKS. As Silver Spring is one of the biggest hub for business it may likely to be hurt by emerging competition. LOOKS will have to face Monopolistic competition, as its competitor is able to differentiate their offerings. 5. MARKET RESEARCH The demographic segregation of Silver Spring is displayed in the graph displayed below: Age Group| %| Under 18 yrs| 23%| 18 – 24 yrs| 9. 3%| 25 – 44 yrs| 37%| 45 – 64 yrs| 21. 2%| Above 65 yrs| 9. 6%| Silver Spring is a ‘Salad Bowl’ society with ethnic group maintaining their ethnic differences, neighborhoods and culture. The Silver Spring population comprises of different racial people which are 46. 61%  white, 28. 07%  African American, 0. 44% Native American, 8.22% Asian, 0. 06% Pacific Islander, 11. 55% from  other races and 5. 04% from two or more races 22. 22% people of the total population are of Hispanic or Latino race. ‘Looks’ will concentrate on the needs and wants of all races as each group has a specific want that need to be satisfied. The Household pattern in Silver Spring is ‘diverse’ as maximum people in Silver Spring are adult live together, single parent family and single live out. 6. MARKETING ENVIRONMENT a. Political and legal factors This environment comprises of laws, government agencies and pressure groups. Business Legislation protects companies from unfair competition, customers from unfair business practices, and interest of the society. Consumer Protection is one of the most important aspect that had to be followed by the business legislation in Silver Spring, maintaining the product quality and disclosing the facts about the product is very important. Anti-competitive agreements among competitors are restrained in Silver Spring. Agreements such as price fixing and customer and market allocation agreements are prohibited in Silver Spring. Economic factors Economic environment helps in determining the strength and size of the market. LOOKS need to analyze the economic environment as the available purchasing power in an economy depends on current income, prices, savings, debt and credit availability in the economy. So its important to analyze the major trends in income and consumer spending patterns. Income Distribution The total number of household in Silver Spring is 30,374. Average household income of the area is $51,653 and the average income of the family is $60,631. The per capita income of Silver Spring is $26,357. 9. 3%(7300 people) of the population are below poverty line. The cost of living in Silver Spring is 40. 12% higher than the US average and the unemployment rate is 5. 10%. The recent job growth trend is negative. c. Social factors Silver Spring people are looking for services and products that provide them ‘Self realization’. Customers have become more value driven in choosing their products or services. Silver Spring organizes several ethnic festivals, musical and entertainment events. One of the most famous film festival i.e. Silver docs Documentary film festival is held every year in the month of June. Silver Spring also organizes Silver Spring Jazz festival which is one of the biggest musical festival which attracts more than 20,000 people. This festival is held on the second Saturday in the month of September. It also hosts American Film Institute Silver Theatre and culture, which showcases American as well as different foreign movies. Silver Spring is one of the major area of Montgomery County, the revitalization of Silver Spring has beckoned diversity of people wide variety of ideas. Thus, Silver Spring had a wide variety of culture. SLP02 7. COMPETITIVE ADVANTAGE ANALYSIS SWOT Analysis : Strengths : * Location, centrally located * Well-trained employees with excellent styling, hair care skills * Customer focused business practice * Wide range of services * Low cost * A powerful strategy supported by competitively valuable skills and experience in key areas * A strong financial condition; ample financial resources to grow the business * Product innovation skills * Wide geographic coverage Weakness : LOOKS will cater to a diverse variety of people of different culture and races i. e. whites, African American, Native Americans, Asians and people of other communities and culture. The Social class which LOOKS will target will be Middle class, upper middle class, Lower upper and upper uppers. Psychographic Segmentation: ‘Lifestyle’ and ‘Style statement’ are one of the priorities of people of Silver Spring. LOOKS will target the audience who are straights, swingers and long hairs having different personality traits. LOOKS will personify the personality of its target audience, by giving a style to their living. 9. SERVICE DESCRIPTION Silver Spring organises lots of cultural festivals, film festivals, and musical events. So LOOKS will cater the need of style needed by the target audience during these occasions. LOOKS will provide a quality service so as to keep the customers satisfied. With the trained and specialized staff it will also be able to speedy service to the client. As people look for quality, convenience and speed. LOOKS will focus in making hard core loyals, through its customer service, quality and style. 10. BUSINESS MISSION LOOKS is committed to provide the best services to its customers, it will provide its customers best professional services in the field of Hair care and styling. With the changing environment, the company will acquire new trends and will upgrade its services to provide best services to its customers. 11. GENERAL OBJECTIVES or GOALS Financial: 1. To reach the breakeven point within two years of the business operations 2. Growth of 10% profits from the base year. Nonfinancial: 1. Expand the operations of business by including new hair care programs within five years. 2. To become one of the best hair care salon in Silver Spring 3. Attracting the customers from the areas near silver Spring 4. Providing best services all round the year. 5. Provide professional services in affordable price. SLP03 12. DISTRIBUTION, LOCATION ;amp; TIMING The primary base of any beauty hair salon is to provide basic hair cut and other hair styling. LOOKS will be one stop solution for all the hair care needs. LOOKS provides hair styling for the entire family. The services of LOOKS will include Haircuts, Formal Styling of hairs, Casual hair styles, coloring, highlighting, perms, deep conditioning treatment, hair care treatment, hair spas, relaxers, massage, hair extension. Service is offered on a walk in basis or by appointment. LOOKS will emphasize a customer-centric service where the customers needs are always the priority. Highlighting is one of the essential services that is demanded by the customers in silver Spring. Coifed hair is one of the famous dress code that is followed by many women at their workplace. Customers not only just look for getting their hairs highlighted, but also prefer the services as cut with waving and smoothing. The main focus of customers in today’s time is quality of service that is provided at the hair salon, they aspire quality services as work place appearance code is one the important aspects of people in Silver Spring. Colouring and highlighting of hairs helps is transforming or changing the look and appearance of the person. Hair straightening and smoothening is also one of the major services that is demanded by the customers. LOOKS will also follow the new trends of hair styling just as blowout styling. LOOKS will also provide therapies and spa treatment which will help in recovering the damage hairs, hair loss and thinning hair treatments. 13. VARIATIONS IN TARGET MARKET LOOKS will tailor its services so that it caters the needs and wants of local customer group as well as immediate neighbours of Silver Spring. People in Silver Spring are of different races and culture so the customers will have diffused preferences, the consumer preferences will be diverse. LOOKS will operate in Silver Spring and its surroundings and will cater all the local variations. It is a suburban area. With the connectivity with two major cities, Washington D. C and Biltmore, it will also target the people residing near Silver Spring. SLP04 14. INFORMATION NEEDS Information on segmentation and competition are essential. Marketing Segmentation is an effort which helps in increasing company’s precision marketing. LOOKS will practice Segment Marketing as it will help in creating large potential market, as LOOKS will provide its services at low cost, it will be able to attract customers and the low costing can help gaining higher margins in future as LOOKS will cater a large market. The main aim of LOOKS will be to create and retain customers, keeping in mind the tastes and preferences of the customers. LOOKS can also create a few fine toned services and can price them accordingly for a high class segment. 15. PERSONAL SELLING LOOKS will adopt Full Market coverage strategy, it will serve all customer groups with all the products they might need. The services and marketing will be designed in such a way that it will appeal the broadest number of buyers. It will aim to endow its services with a superior image in people’s mind. It will try and win price sensitive market by keeping low cost to the services provided. 16. TRAINING * Gap between management perception and service quality specification: This gap occurs when management correctly perceives the requirement of the client but it is not able to provide that service because of the specified performance chart. There are several guideline that a company has to follow. LOOKS will use the products of latest technology so as to serve its clients with the services and style needed. Gap between service quality specification and service delivery: This gap occurs when the personnel is not trained properly and is incapable to meet the standards. LOOKS will focus on training its stylists from few of the top styling professionals, so that LOOKS is able to deliver the specified service required by the client. * Gap between perceived service and expected service: This gap occurs when the customers misperceives the services that is to be provided by the company. LOOKS will minimize the gap between the perceived service and the expected service. It will cater to the expected needs of the clients of LOOKS. LOOKS will give importance to reliability, responsiveness, assurance, and empathy so as provide the determined service quality. 17. INCENTIVES * Gap between customer expectation and management perception: This gap occurs when the management is not able to perceive correctly the requirement and wants of the customer. LOOKS will consult the clients to know their expected needs and wants. The stylists will be trained in the way, that they work in accordance with the expectation of the clients so as to reduce the gap between customer satisfaction and management perception. Gap between service delivery and external communications: This gap occurs when customer satisfaction are affected by statements made by company personnel. LOOKS will focus on meeting the requirement of the clients, the clients who are decisive about the style or the service needed by them will be consulted by our consulting professional who will specially focus on understanding the requirement of the client. 18. EVALUATION OF SELLING PERFORMANCE LOOKS is a customer centred organization. LOOKS has to differentiate its services from its competitors to emerge as the best Beauty Hair Salon in Silver Spring. LOOKS will provide high Performance Quality to its customers. It will provide its customers the style and services as per their specifications. LOOKS will focus on customer satisfaction; the services that will be provided by LOOKS will enable the customer to feel good. LOOKS will provide the adequate and demanded quality to its customers by consulting the customers, the stylist will provide the services as needed by the customer. LOOKS will earn a strong competitive advantage through Personnel Differentiation. LOOKS will train the employees by the best stylists to cater to its customers. The physical space of LOOKS will be another powerful image generator. 19. COMMUNICATION OBJECTIVES LOOKS will help women in balancing their lifestyle, taking care of their hairs. It will be a treat for women who have time. It will be one of the places where men and women can get pampered by the hair treatment, spas and other hair styling and hair care services. LOOKS position itself as â€Å"one-size-that -fits-all†, and â€Å"A mirror to your Image† 20. COMMUNICATIONS STRATEGY The main objective of LOOKS is to build trust in women, once LOOKS is able to gain the trust then they tend to be loyal. Objectives of LOOKS: * Visual excitement environment * Fashion authority * Above average quality and value for money * Customer dedication * Providing unrevealed value to our customers in the quality of services provided by LOOKS * A commitment to putting customer first at all times. LOOKS will focus on building awareness, attracting traffic or eyeballs, turning first-time buyers into loyal repeat customers as it is the Holy Grail of marketing strategies. It will provide new innovative colors as well as style to their clients. As the customers in this industry have diffused preferences, the preferences of the clients will be considered and worked accordingly. The salon will focus on satisfying both Employees as well as customers because if the employees are happy they will keep the customers happy. A Fun to work environment will be adopted to add a spark in the working environment. 21. MEDIA LOOKS will follow the cheapest mode of advertising . i. e word of mouth as it will focus on customer satisfaction. Other modes of promotion will also be followed like advertising through banners and hoardings. LOOKS will position itself as ‘Mirror to your image’. * Newspaper : One page advertisement will be displayed in the leading news papers of Silver spring as Silver spring Gazette, and Mondotimes. It will help in targeting a greater audience as it covers large geographic area. * Front store Display: As these displays are visible by the pass by, it will help in attracting customers. * Banners: these displays will also help it attracting huge customer base. * Radio :Radio is also one of the most effective mode of promotion, In Silver spring there are huge number of radio stations that operate. It will also help in attracting huge customers as radio also targets huge geographical area. AM station like WACA, (1540 AM), W7OP (1500 AM), FM stations like WWDC (101. 1 FM), WCSP (90. 1 FM) * Pamphlets: To increase more awareness, printed pamphlets can be distributed near schools, shopping places, amusement parks. * Specialty advertising: In this LOOKS will advertise by few useful, low cost items bearing the company’s name and address, on few of the items advertising message will also be displayed. This will include ball pens, calendars, memo pads. Maintaining ongoing contact is essential for building relationships. It is the extension of engaging and focuses on keeping a customer. The objective is to increase the customer base, and retaining customers and engaging them on an ongoing basis results in increased product service opportunities and provides the opportunity to learn more about the customer, and forge closer relationships. 23. SALES PROMOTIONS LOOKS has to build effective communication strategy so as to capture maximum market. LOOKS has to work to develop an insight in people. LOOKS will be positioned in the mind of people as â€Å"one stop solution for hair care and styling†, one-size-that -fits-all†, and â€Å"A mirror to your Image†. LOOKS has to follow â€Å"learn-feel-do† model for determining its communication objective as the target audience has high involvement with a service provided to have differentiation. 24. ADVERTISING AND PROMOTIONS EFFECTIVENESS Competition and Buying patterns of people of Silver Spring LOOKS competitors include: 1. Traditional Barbers: 2. Franchised Quick Salons 3. Independent Salons Ebony Barbers Unisex ;amp; Fenton Barber Shop are the main competitors of LOOKS. The buying patterns of men and women are quite different. Men are more sensitive towards pricing and convenience. Women are concerned and conscious with their styles and trends that are being followed. Monitoring needs to be carried out effectively, and that the feedback gained is useful and appropriate, it is also imperative that feedback is considered in any future decision-making SLP05 25. OVERALL COSTS The average price that we will charge for the styling of hairs will be approximately $100. The fixed cost will be approximately $100,000 per year including the equipments and the variable cost will be approximately $25 which will mainly include the electricity expenses, employee cost and other miscellaneous cost. Calculating the break even point: BEP = [FC ? (P – UVC)] BEPQuantity = [$100,000 ? ($100 – $25)] = 1333 customers BEPRevenue = 1333 customers ? $100 = $133300 The above figures are tentative and subject to change with the market conditions and demand. LOOKS will follow super value strategy, it will provide high quality of service in low price, so as to attract maximum customers. LOOKS initial focus is to attract maximum customers. It will follow Market penetration pricing, this will allow LOOKS to win the largest market share. New and quality product range of the hair care products will also be kept at the salon as many people prefer these for home use as well and it will turn out to be one of the channels for sale for high premium brand products. 27. TEMPORARY PRICE PROMOTIONS A new style of services will be provide to the client, all their requirements will be considered so as to provide them with the best result, the salon will give a total new look to the client keeping in mind the texture and the nature of his hair using best products and giving best services. The salon will follow distinctive strategy for positioning. The price will be on a lower end, as main motive of LOOKS is to give customers the value for the product and their satisfaction, as Customer value and customer satisfaction are very important for any company or a brand to sustain in the market and capture the market share. LOOKS will be focusing on price-quality effect . i. e. providing high degree of quality product. 28. PROFITS LOOKS will also keep premium  hair care products  for sale as they are one of the important revenue generator, they help in providing 5% to 40% of revenue. These professional quality supplies will include shampoos, conditioners, hair colors, reconstructions, brushes, combs, and other styling aids. 29. LEARNING Attract The critical first step of the customer experience is to attract customers to LOOKS. After attracting, it then need to engage customers to obtain their interest and participation. Engage The key factors at this stage are Convenience combined with interesting and innovative services. Learn Building up a knowledge database on each customer – is an important aspect that needs to be done at LOOKS as it can create value for the customer and help build the brand-customer relationship. Relate By leveraging the multidimensional data gathered from ongoing interactions with individual customers, LOOKS can create value by providing a personalized experience. Customization and good Customer Care help to erect switching barriers and encourages customers to return and repeat the cycle. LOOKS has to focus on generating high customer loyalty by delivering high customer value by designing superior value proposition backed by superior value delivery system. LOOKS success depends on the way it creates and deliver the value which is superior than its competitors, which is develops following capabilities : * Understanding customer value * Creating customer value * Delivering customer value * Capturing customer value * Sustaining customer value LOOKS will focus in making their customers their ‘True Friends’ i. e. it will bbuilding relationships with the right customers Conclusion: The marketing strategy will seek to first create customer awareness regarding the services offered, then develop the customer base, and finally work toward building customer loyalty and referrals. The message that LOOKS will seek to communicate is that the entire family can be served quickly, professionally, with superior customer service at reasonable rates. The message will be communicated through various methods. The first is in-store and storefront displays. This will be a convenient method to attract people that walk past LOOKSs store front. The other method of communication is advertisements in two local newspapers.

Memoirs of a Geshia and Andrea Del Sarto Essay Example for Free

Memoirs of a Geshia and Andrea Del Sarto Essay The film adaptation of Memoirs of a Geshia faithfully depict the context in which it was taken. Woman are portaryed strong feminists in todays society. Sayuris blue eyes symbolise the Japanese culture, as the element of water is often associated with adoption and change, as it can be both a relaxing and a desructive force. Sayuris growth from a young servant to one of the most sought after geshia in her district water is a good guard against fire. Sayuri is portrayed as being a worthy protective for the equally formidable element of fire which can be associated with the beautiful but highly dangerous Hutsumomo. Both woman of fire and the girl of water illustrate the dominance and power of women in todays society. as both characters were associated with the element of earth, emphasising the power of women in todays society as they have gained power over time. On the other hand, in Andrea del Sarto, Browning rejects the tendency rejects the tendancy of romantics to project all their desires onto a female object . His dramatic monolouge in the poem is a variation on the theme of men processing women as objects, You beatiful Lucrezia that are mine! reveals the artists desire to assert his male dominance over her female passivity. Browning showcases the role of women during the Victorian era and the time as men only refer to them as objects as they were only desired by men for their perfect eyes perfect mouth over time women have become more powerful as portrayed in Memoirs of a Geshia as the society has recognised and potential of women.

Significance of Capital Market for Economic Development

Significance of Capital Market for Economic Development An Explotary Study On The Significance of Capital Market for Economic Development and Its Further Growth Potential In Context of Bangladesh Abstract This research paper investigates whether the role of capital market is significant for the economic development of Bangladesh. Literature suggests that well developed stock market can provide an extra impetus to economic activity. Similar conclusions were also drawn from the in-depth interviews. This paper also reveals a well-scanned scenario of the capital market highlighting its setbacks, current weakness, recent improvements and its prospective signs of development through which we can foresee whether the capital market has further growth potential or not. Thus the present study can also contribute in providing essential information that can also be used for further research. Abbreviations ADB- Asian Development Bank CDBL- Central Depository of Bangladesh Limited CDS- Central Depository System CSE- Chittagong Stock Exchange DGEN- DSE general index DSE- Dhaka Stock Exchange GDP- gross domestic product IPO- initial public offering SEC- Security and Exchange Commission 1.0 Introduction The financial market contributes to the economic growth and development by providing the needed finance for provision of goods and services. The financial market consists of two division- money market and capital market. The money market is basically entitled to supply finance on short-term basis to individuals, businesses, enterprises, government and their agencies. The capital market, on the other hand, provides finance on medium to long-term basis to corporate bodies, government and their agencies (Al-Faki, 2006). Capital Market plays a crucial role in any modern economy as they allow investors’ fund to flow to the most promising opportunities, i.e., the funds are mobilized and channeled efficiently from savers to the users of funds (Al-Faki, 2006; DSE, 2006; Hubbard and Thornton, 2006; Ahmed, 1997). In Bangladesh financial intermediation relies mostly on the banking sector which further resulted in lack of equity financing (Salahuddin Ahmed, 2007; Islam and Hassan 2002). Furthermore out of 5 million urban-based middle class people only four hundred thousand are participating in the securities market and among them roughly hundred thousand are active investors. A large portion is still ignorant of the nature and benefits of the capital market (Abu Ahmed, 2006; DSE Review, 2006; Islam and Hassan, 2002). Developing more complete and deeper capital market would enhance a countries growth potential and innovation (Andritzky, 2007). The forces of globalization, technology, new forms of competition have noticeably transformed capital market worldwide (Hassan, 2004). The chief advisor Dr. Fakhruddin Ahmed stated that â€Å"Only a vibrant and well-regulated capital market can bring sustainable economic development in the country through making the real sector capable of meeting the challenges of the competitive global economic realities† ( DSE Monthly Review, June 2007). Regardless of recent improvements, Bangladesh’s capital market remains underdeveloped as its size is still very small in terms of market cap (ADB, 2006; Salahuddin Ahmed, 2007; Islam and Hassan 2002). The market cap represents just above 9% of the GDP (Dr. Fakhruddin Ahmed retrieved from DSE Review). As Bangladesh capital market is still quite small compared to other regional market and to the size of its economy (CSE, 2006) despite its existence for a long time, this paper applies a framework for analyzing the significance of capital market for economic growth and development of Bangladesh, identifying its growth potentials through exploration. 2.0 Problem Statement Bangladesh’s capital market is still underdeveloped, in spite of recent improvements. The size of the country’s capital market is quite small mainly due to the excessive dependence of leading corporate entities on the banks for financing. Moreover the overall transparency of market transaction is also low compared to international standards and generally there has been slow development of the underlying market infrastructure. The government is making effort to develop the reliability and efficiency of stock exchanges as investment market. Compared to the other neighboring countries the numbers of participants are much smaller in Bangladesh as investor lack confidence. There is a supply side constrains in the capital market as quality shares are lacking. For all this reason this research is done to explore the importance of capital market in the economy and what are the prospective sign of development of the stock market. 3.0 Purpose of the Study The purpose of the study is to explore a well scanned scenario of Bangladesh capital market, its significance and its prospects. Although some research has been conducted relating to this topic but there is little empirical evidence about how essential stock market is to economic development of a country. A sound capital market prompts better economic base and influence its future growth and so it can help realize Bangladesh’s growth potential. The capital market of Bangladesh is on the brink to play its due role as a medium for financing investment and thereby making a notable contribution to economic growth, employment creation and poverty alleviation. The capital market plays an important role in quickening the pace of economic development but the existing state of the capital market is under-developed and not in a position to ensure economic progress of the country. Hence this research will try to highlight the significance of capital market for the nation and explore what are the probable signs of progress. 4.0 Research Timeline 2007 SeptemberWriting Research Proposal 2007 SeptemberDeveloping Literature Review 2007 OctoberCollecting Data 2007 October- NovemberData Analysis and Interpretation of the Findings 2007 NovemberPreparing Draft and Finalizing the Research Paper 2007 DecemberSubmission of Research Paper 5.0 Limitations of the study During conducting the research I came across certain limitations and among them the foremost one is time constrain. Although I got the opportunity to work in an organization that is capital market based but it was difficult to find spare time that could be used for the report. Moreover the interviewed person could not provide all necessary information due to lack of time. The research timeline also reveals that time constrain was actually a barrier as there was plenty to find about this research topic. As the research is conducted for the first time, I did not get much support from previous research paper and further research is suggested. A huge portion of the report is based on secondary data collected through websites and so the depth of reliability varies as by the nature of website. 6.0 Review of the Literature 6.1 Financial Intermediation According to Joseph Yam (2004) financial intermediation is channeling savings into investments. Aziz and Duenwald (2002) referred that financial intermediation affects growth through the following channels – (i) it can increase the marginal productivity of capital by collecting information to evaluate alternative investment projects and by risk sharing (ii) it can raise the proportion of savings channeled to investment through financial development. According to Conning and Kevane (2002) â€Å"intermediation implies an intermediary†. Gorton and Winton (2002) added that â€Å"it is the root institution in the saving investment process†. They referred that financial intermediaries are firms that borrow from those who have excess money, that is, the savers and lend the money to companies that need resources for investment. 6.2 Performance Indicators According to R. N. Agarwal (2000) the most commonly used standard to measure the size of a country’s stock market is market capitalization ratio, that is, the ratio of market value of stocks which are currently listed on a bourse to Gross Domestic Product (GDP). A small ratio of capitalization to GDP reveals the small size of a stock market. Alternatively, the size can be measured by the number of listed companies on a stock market. The height of maturity of an economy’s financial system is essential for economic development. Bekeart et al., (2007), Hubard and Thornton (2006), Rosul (2002) all investigated the significance and relation of stock market development with the economic growth and their conclusion suggests that capital market development is positively correlated with long term economic growth and the capital market plays an important role in the economic development of any country. The size of the equity capital market has an optimistic effect on economic growth of the country, that is, much higher market cap and turnover has a major positive influence on the economy (Institute for Advanced Studies, IHS, 2006). It is seen that the ratio of market cap to GDP in neighboring countries like India, Pakistan and Sri Lanka is relatively much higher, that is, more than 60% of their GDP (DSE, Kh. Asadul Islam, 2007; Dr. Fakhruddin Ahmed,2007). In Bangladesh the market cap is very small proportion of the countries GDP (Islam Hassan, 2002) and this is due to significant dependence on the banking sector (DSE Review, Fakhruddin Ahmed, June 2007). Market capitalization as a share of GDP was around 2.5%-3.3% during 2001-2003 compared with 1.4-10.1% during 1993-1996 and 2- 4% during 1997-2000. However in the year 2004 market cap reached 6.8% reflecting the rise in the DSE index from 968 to 1,971 at the end of 2003 and 2004 respectively (ADB, May 2005). The trend of market cap as percentage of GDP and other capital market indicators of DSE and CSE are shown through the help of statistical data represented in the discussion section in Table 1. Despite the existence of the bourse from 1954, the capital market still exhibits features of an emerging equity market (Islam Hassan, 2002). The finance sector is immensely bank-based (Salahuddin Ahmed, 2007) as resource mobilization for industrialization and economic development is made primarily through the regular banking system (Islam Hassan, 2002). Borrowing requires fixed payments and over-reliance on banks can cause credit default risk. According to (Mochammad Rosul, 2002) excessive reliance on bank borrowing results in a mismatch with long-term investments being financed with short-term bank loans. He added that such a risky situation can further contribute to the economic crisis and so the job of the principal fund supplier for business should be transferred from banking sector to the capital sector. 6.3 Regulatory Bodies 6.3.1. The Security and Exchange Commission (SEC) The Security and Exchange Commission (SEC) exercises power under the Security and Exchange Commission Act 1993 and established on June 8, 1993. SEC, the sole Capital Market Watchdog and Regulator, has been pursuing a vigorous capital market development process including amendments of its existing regulations, conduction of investor awareness programs, rigid monitoring and surveillance to bring in transparency in the trading mechanism (SEC, Annual Report 2003 -04). The responsibility of SEC includes the following: Regulating the functions of Stock Exchanges Registering and regulating the business of stock brokers, sub broker, share transfer agents, underwriters, registrar, portfolio managers, investment advisors, and other middlemen related to security dealings. Registering, controlling, and monitoring of all types of mutual funds Controlling and monitoring of all authorized self regulatory organizations Prohibiting fraudulent and unfair practices related to securities Promoting investor’s education program and providing training of intermediaries Regulating substantial acquisition of shares and takeover of companies SEC are detects market manipulation and also keeps constant vigil on the activities of stock exchanges to ensure effectiveness of the surveillance system. Conducts research and publishes information for above purposes (Source: Security Exchange Commission Website: www.secbd.com) 6.3.2 Stock Exchanges 6.3.2.1 Dhaka Stock Exchange (DSE) On April 28, 1954 DSE was first incorporated as the East Pakistan Stock Exchange Association Limited. Formal trading began in 1956 with 196 securities listed on the DSE with a total paid up capital of about Taka 4 billion. On June 23, 1962 it was renamed as Dhaka Stock Exchange (DSE) Limited. After 1971, the trading activities of the prime bourse remained suppresses until 1976 due to liberation war and economic policy pursued by the then government. Trading resumed at DSE in 1976 with only 9 companies listed having a paid up of Taka 137.52 million (Bashar et al., 2000; M Farid Ahmed, 1997). As of today there are 342 listed companies in the prime bourse with market cap exceeding 700,000 million (DSE, 2007). The reforms that DSE undertook recently for ensuring professionalism and transparency focused on the trading of securities. The measure were taken to implement transparent trading system, efficient reporting of trade, real time delivery of information, strong surveillance and monitoring over trade of securities and settlement of shares (Rahman,Uddin and Malik, 2006). 6.3.2.2 The Chittagong Stock Exchange Limited (CSE) The CSE is the countries second bourse that started its operation from the year 1995. It is also a self-regulatory non profit organization. Currently the numbers of listed securities are 223 of which the number of listed companies are 208, mutual funds 14, and one debenture. 6.4 Recent Capital Market Scenario of Bangladesh According to Dr Fakhruddin Ahmed (DSE, 2007) political uncertainty, corruption and lack of transparency in all section of the social and economic fabric are some of the reasons for capital market deficiency. Bangladesh Governor Salehuddin Ahmed (2007) reveals that foremost problems include political instability, under developed infrastructure, poor port management, short comings in legal system and corruption (Financial Express Report). On the other hand DSE general share price index reached its pinnacle and crossed 3000 points (Newage: www.newagebd.com). In fact the capital market witnessed a robust growth in the current year. Both turnover and market cap crossed new milestones at Tk 3000 million and Tk 700,000 million respectively during the year (DSE, 2006; DSE, 2007, IDLCSL). Recently our market cap crossed USD 10 billion that accounts for only 13% of its GDP which was only 8% a year back. (DSE Monthly Review, Oct 2007). Though the contribution of capital market to GDP is still inadequate when compared to neighboring countries but still its increase is significant for the development of our economy. Comparison of indices and market cap among different countries is shown in Table 2 and Figure 2 in the discussion part. Entry of 12 new issues worth Tk 11,322.95 million helped raise the market cap. Some of the reason for the progress in capital market development is central depository system and the automated trading system (ADB, 2006; SEC, 2005). The DSE has upgraded its automated online trading system and investors are able to trade from different parts of the country (SEC Quarterly Report, April-June 2007; ADB, 2006). Another reason for the vigorous improvement of the equity capital market is due to strenuous efforts taken by the SEC that further boosted investors’ confidence (DSE, 2007). 7.0 Research Methodology 7.1 Research Design The present study endeavored to explore importance of capital market for the economic development of Bangladesh and its future prospects. Exploratory research is selected as research design as little information exists about the capital market of Bangladesh. The aim of exploratory research is mainly to gain enough information before doing more thorough research. We basically start by gathering as much information about the object as possible and with a vague impression of what we should study (Cooper Schindler, 2003). 7.2 Research Instrument The research was conducted using both primary and secondary data. For collecting secondary data, various books, websites, newspapers, annual reports, monthly reviews and significant articles were chosen. Also for collection of primary data in-depth interviews with a range of designated professional, related to this field, were taken. 7.3 Data Collection Secondary data used in the paper has been collected through access of different source of books, journals, publications of DSE, SEC, ADB and other news paper and articles. The DSE and SEC library were visited to acquire secondary information. Various websites were browsed to collect relevant articles that are circulated on online sites. For collecting primary data, in-depth interviews of experienced people related to this field of capital market were taken. Appointments were fixed initially and then the interviews were taken. The interviewed persons are Kh. Asadul Islam, CEO, IDLC Securities Limited (IDLCSL); Anwarul Kabir Bhuiyan, SEC, Executive Director; Tania Sharmin, SEC, Assistance Director (Surveillance); Abul Ehsan, Senior Officer, IDLC Finance Limited; Moumita Manzoor, Research Associate, IDLCSL. Each of them was interviewed for 40 minutes approximately during the office hour while taking break from work. They were asked some essential questions associated to this research topic. Some of the questions that were asked are as follows- What is the role of capital market in the economy? What are the setbacks of the stock market in Bangladesh? Explain the current scenario of the capital market What are the prospective sign of the development of the capital market? How can we be sure of a sound growth of capital market in Bangladesh? Do you see a better or worse scenario ahead of us and why? 8.0 Discussion 8.1 Role of Capital Market in the Economy According to Dr. Mirza Azizul Islam (2006) capital market can play an essential role in enhancing economic development through efficient intermediation of savings into productive investments and in encouraging the expansion of private entrepreneurship (DSE, 2006). The primary market can contribute to the growth of private entrepreneurship by facilitating the entrepreneurs to raise funds from surplus savers and consequently finance investment in a cost-effective manner. For instance, if an industrialist with a viable new investment or expansion proposal is unable to execute his plan due to financial crisis then he can issue securities to meet the required deficit. Moreover issuing shares have the additional advantage that they do not create fixed charges for the companies issuing them and hence endows a better option than, say, financing through bank loans. A proficient and vibrant secondary market can also contribute copiously to economic growth. If a company, for instance, is well-managed and the secondary market prices are higher than face value, subsequent rights issue can obtain premium. Therefore the company can finance its development plan in lucrative and cost-effective approach. So the capital market not only provides opportunity for companies to borrow funds needed for long term investment purposes but also provides avenue for the marketing of shares and other securities in order to raise fresh funds for expansion of operations, leading to increase in output or productivity. The equity market offers opportunity for government to finance projects aimed at providing essential amenities for socio-economic development. Such market encourages inflow of foreign capital when foreign companies or investors invest in domestic securities. The securities market can help attain higher productivity by restructuring of ownership and management of the company as secondary market provides an exit option for the original founders and it also creates an avenue for the populace to participate in the corporate sector of the economy and share in its wealth through ownership of securities. So it not only reduces the over-reliance of the corporate sector on short term finance for long term projects but truly makes available the needed money for venture capital development which could serve as a vehicle for industrial development. So through its allocating mechanism, the capital market ensures an efficient and effective distribution of scarce financial resources for the optimal benefit to the economy. 8.2 Major Setbacks of the Capital Market Investment in capital market is limited to a small proportion of the population. Investors’ confidence in the capital market has not entirely recovered since the stock market crash in 1996. Share market debacle in 1996 was mainly the result of market manipulation by a section of stockbrokers in collaboration with some other market participants (SEC, 1997). Some of the other notable reasons behind the stock market crash includes insider-trading and off-loading of shares by directors of the company, absence of circuit breaker in the securities market, disclosure of unregulated rumors and sensitive information, lack of attention given by investors to the relation between stock price and company fundamentals, weak regulatory body to name a few. The diagram below shows clearly the catastrophe that took place during 1996. Figure 1 DSE General Price Index (DGEN) 1993-2007 (Source: IDLCSL) On November, 2001 the DSE introduced the benchmark price barometer DSE General Index (DGEN) with a base index of 817.62 points. The index excludes companies of Z category and is calculated on the basis of price movement of individual stocks. Figure 1 displays the monthly DSE general index from the year January 1993 to November 2007, the latest month for which the data was available. From the diagram we can tell that the market behaved irrationally during the year 1996. The DSE all share price index rose from 832 in 1 January 1996 to 3567 in 14 November of the same year, i.e. DGEN rose from 1106 to 4738.83. This conspicuous rise in DSI was followed by a drastic fall to 2261.47 points in the last week of December 1996 and again to 1140.65 points on April 1997. The market was dreary for a long period of time after the 1996 collapse but between July 20003 and June 2005, DGEN more than doubled from 823 to 1727. It appears that the index is performing modestly in the current year followed by an uptrend as it shows an increase in the index from 1527.29 in November 2006 to 3011.60 in November 2007, reaching its pinnacle after 1996. The devastating history of 96 crashes still persists in the mind of potential investors but without mass participation the market cannot sustain in the long-run. Also it needs to bring back the foreign investors that fled in the 1996 debacle. Inflows of foreign direct investment need to be restored to stabilize the economy. From the statistical data below in Table 1 it can be observed that foreign investors are least attracted to the securities market of Bangladesh. There were significant foreign investment inflows into equities in the year 1994 amounting to $ 106 million but by the mid 1997, most of the foreign portfolio investors had divested holdings and have not since returned. The following table contains the key capital market indicators reflecting that the pace of primary market development had been fluctuating and the market’s contribution to resource mobilization of the economy remains below potential and the secondary market remained stagnant during 1997-2003 but showed some sign of recovery in 2004. Overall, investor confidence has not yet fully recovered. Table 1 Capital Market Indicators- Dhaka Stock Exchange Item 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 No of Listed Companies 143 157 183 186 202 208 213 223 231 242 248 337 Market Cap In taka (mn) 18099 41771 56518 168106 71302 50254 44789 62932 63777 71269 97587 224923 In $ (mn) 455 1038 1409 3960 1569 1036 881 1169 1119 1229 1685 3709 Market Cap as % of GDP 1.44 3.08 3.71 10.11 3.95 2.51 2.04 2.65 2.52 2.61 3.25 6.76 Significance of Capital Market for Economic Development Significance of Capital Market for Economic Development An Explotary Study On The Significance of Capital Market for Economic Development and Its Further Growth Potential In Context of Bangladesh Abstract This research paper investigates whether the role of capital market is significant for the economic development of Bangladesh. Literature suggests that well developed stock market can provide an extra impetus to economic activity. Similar conclusions were also drawn from the in-depth interviews. This paper also reveals a well-scanned scenario of the capital market highlighting its setbacks, current weakness, recent improvements and its prospective signs of development through which we can foresee whether the capital market has further growth potential or not. Thus the present study can also contribute in providing essential information that can also be used for further research. Abbreviations ADB- Asian Development Bank CDBL- Central Depository of Bangladesh Limited CDS- Central Depository System CSE- Chittagong Stock Exchange DGEN- DSE general index DSE- Dhaka Stock Exchange GDP- gross domestic product IPO- initial public offering SEC- Security and Exchange Commission 1.0 Introduction The financial market contributes to the economic growth and development by providing the needed finance for provision of goods and services. The financial market consists of two division- money market and capital market. The money market is basically entitled to supply finance on short-term basis to individuals, businesses, enterprises, government and their agencies. The capital market, on the other hand, provides finance on medium to long-term basis to corporate bodies, government and their agencies (Al-Faki, 2006). Capital Market plays a crucial role in any modern economy as they allow investors’ fund to flow to the most promising opportunities, i.e., the funds are mobilized and channeled efficiently from savers to the users of funds (Al-Faki, 2006; DSE, 2006; Hubbard and Thornton, 2006; Ahmed, 1997). In Bangladesh financial intermediation relies mostly on the banking sector which further resulted in lack of equity financing (Salahuddin Ahmed, 2007; Islam and Hassan 2002). Furthermore out of 5 million urban-based middle class people only four hundred thousand are participating in the securities market and among them roughly hundred thousand are active investors. A large portion is still ignorant of the nature and benefits of the capital market (Abu Ahmed, 2006; DSE Review, 2006; Islam and Hassan, 2002). Developing more complete and deeper capital market would enhance a countries growth potential and innovation (Andritzky, 2007). The forces of globalization, technology, new forms of competition have noticeably transformed capital market worldwide (Hassan, 2004). The chief advisor Dr. Fakhruddin Ahmed stated that â€Å"Only a vibrant and well-regulated capital market can bring sustainable economic development in the country through making the real sector capable of meeting the challenges of the competitive global economic realities† ( DSE Monthly Review, June 2007). Regardless of recent improvements, Bangladesh’s capital market remains underdeveloped as its size is still very small in terms of market cap (ADB, 2006; Salahuddin Ahmed, 2007; Islam and Hassan 2002). The market cap represents just above 9% of the GDP (Dr. Fakhruddin Ahmed retrieved from DSE Review). As Bangladesh capital market is still quite small compared to other regional market and to the size of its economy (CSE, 2006) despite its existence for a long time, this paper applies a framework for analyzing the significance of capital market for economic growth and development of Bangladesh, identifying its growth potentials through exploration. 2.0 Problem Statement Bangladesh’s capital market is still underdeveloped, in spite of recent improvements. The size of the country’s capital market is quite small mainly due to the excessive dependence of leading corporate entities on the banks for financing. Moreover the overall transparency of market transaction is also low compared to international standards and generally there has been slow development of the underlying market infrastructure. The government is making effort to develop the reliability and efficiency of stock exchanges as investment market. Compared to the other neighboring countries the numbers of participants are much smaller in Bangladesh as investor lack confidence. There is a supply side constrains in the capital market as quality shares are lacking. For all this reason this research is done to explore the importance of capital market in the economy and what are the prospective sign of development of the stock market. 3.0 Purpose of the Study The purpose of the study is to explore a well scanned scenario of Bangladesh capital market, its significance and its prospects. Although some research has been conducted relating to this topic but there is little empirical evidence about how essential stock market is to economic development of a country. A sound capital market prompts better economic base and influence its future growth and so it can help realize Bangladesh’s growth potential. The capital market of Bangladesh is on the brink to play its due role as a medium for financing investment and thereby making a notable contribution to economic growth, employment creation and poverty alleviation. The capital market plays an important role in quickening the pace of economic development but the existing state of the capital market is under-developed and not in a position to ensure economic progress of the country. Hence this research will try to highlight the significance of capital market for the nation and explore what are the probable signs of progress. 4.0 Research Timeline 2007 SeptemberWriting Research Proposal 2007 SeptemberDeveloping Literature Review 2007 OctoberCollecting Data 2007 October- NovemberData Analysis and Interpretation of the Findings 2007 NovemberPreparing Draft and Finalizing the Research Paper 2007 DecemberSubmission of Research Paper 5.0 Limitations of the study During conducting the research I came across certain limitations and among them the foremost one is time constrain. Although I got the opportunity to work in an organization that is capital market based but it was difficult to find spare time that could be used for the report. Moreover the interviewed person could not provide all necessary information due to lack of time. The research timeline also reveals that time constrain was actually a barrier as there was plenty to find about this research topic. As the research is conducted for the first time, I did not get much support from previous research paper and further research is suggested. A huge portion of the report is based on secondary data collected through websites and so the depth of reliability varies as by the nature of website. 6.0 Review of the Literature 6.1 Financial Intermediation According to Joseph Yam (2004) financial intermediation is channeling savings into investments. Aziz and Duenwald (2002) referred that financial intermediation affects growth through the following channels – (i) it can increase the marginal productivity of capital by collecting information to evaluate alternative investment projects and by risk sharing (ii) it can raise the proportion of savings channeled to investment through financial development. According to Conning and Kevane (2002) â€Å"intermediation implies an intermediary†. Gorton and Winton (2002) added that â€Å"it is the root institution in the saving investment process†. They referred that financial intermediaries are firms that borrow from those who have excess money, that is, the savers and lend the money to companies that need resources for investment. 6.2 Performance Indicators According to R. N. Agarwal (2000) the most commonly used standard to measure the size of a country’s stock market is market capitalization ratio, that is, the ratio of market value of stocks which are currently listed on a bourse to Gross Domestic Product (GDP). A small ratio of capitalization to GDP reveals the small size of a stock market. Alternatively, the size can be measured by the number of listed companies on a stock market. The height of maturity of an economy’s financial system is essential for economic development. Bekeart et al., (2007), Hubard and Thornton (2006), Rosul (2002) all investigated the significance and relation of stock market development with the economic growth and their conclusion suggests that capital market development is positively correlated with long term economic growth and the capital market plays an important role in the economic development of any country. The size of the equity capital market has an optimistic effect on economic growth of the country, that is, much higher market cap and turnover has a major positive influence on the economy (Institute for Advanced Studies, IHS, 2006). It is seen that the ratio of market cap to GDP in neighboring countries like India, Pakistan and Sri Lanka is relatively much higher, that is, more than 60% of their GDP (DSE, Kh. Asadul Islam, 2007; Dr. Fakhruddin Ahmed,2007). In Bangladesh the market cap is very small proportion of the countries GDP (Islam Hassan, 2002) and this is due to significant dependence on the banking sector (DSE Review, Fakhruddin Ahmed, June 2007). Market capitalization as a share of GDP was around 2.5%-3.3% during 2001-2003 compared with 1.4-10.1% during 1993-1996 and 2- 4% during 1997-2000. However in the year 2004 market cap reached 6.8% reflecting the rise in the DSE index from 968 to 1,971 at the end of 2003 and 2004 respectively (ADB, May 2005). The trend of market cap as percentage of GDP and other capital market indicators of DSE and CSE are shown through the help of statistical data represented in the discussion section in Table 1. Despite the existence of the bourse from 1954, the capital market still exhibits features of an emerging equity market (Islam Hassan, 2002). The finance sector is immensely bank-based (Salahuddin Ahmed, 2007) as resource mobilization for industrialization and economic development is made primarily through the regular banking system (Islam Hassan, 2002). Borrowing requires fixed payments and over-reliance on banks can cause credit default risk. According to (Mochammad Rosul, 2002) excessive reliance on bank borrowing results in a mismatch with long-term investments being financed with short-term bank loans. He added that such a risky situation can further contribute to the economic crisis and so the job of the principal fund supplier for business should be transferred from banking sector to the capital sector. 6.3 Regulatory Bodies 6.3.1. The Security and Exchange Commission (SEC) The Security and Exchange Commission (SEC) exercises power under the Security and Exchange Commission Act 1993 and established on June 8, 1993. SEC, the sole Capital Market Watchdog and Regulator, has been pursuing a vigorous capital market development process including amendments of its existing regulations, conduction of investor awareness programs, rigid monitoring and surveillance to bring in transparency in the trading mechanism (SEC, Annual Report 2003 -04). The responsibility of SEC includes the following: Regulating the functions of Stock Exchanges Registering and regulating the business of stock brokers, sub broker, share transfer agents, underwriters, registrar, portfolio managers, investment advisors, and other middlemen related to security dealings. Registering, controlling, and monitoring of all types of mutual funds Controlling and monitoring of all authorized self regulatory organizations Prohibiting fraudulent and unfair practices related to securities Promoting investor’s education program and providing training of intermediaries Regulating substantial acquisition of shares and takeover of companies SEC are detects market manipulation and also keeps constant vigil on the activities of stock exchanges to ensure effectiveness of the surveillance system. Conducts research and publishes information for above purposes (Source: Security Exchange Commission Website: www.secbd.com) 6.3.2 Stock Exchanges 6.3.2.1 Dhaka Stock Exchange (DSE) On April 28, 1954 DSE was first incorporated as the East Pakistan Stock Exchange Association Limited. Formal trading began in 1956 with 196 securities listed on the DSE with a total paid up capital of about Taka 4 billion. On June 23, 1962 it was renamed as Dhaka Stock Exchange (DSE) Limited. After 1971, the trading activities of the prime bourse remained suppresses until 1976 due to liberation war and economic policy pursued by the then government. Trading resumed at DSE in 1976 with only 9 companies listed having a paid up of Taka 137.52 million (Bashar et al., 2000; M Farid Ahmed, 1997). As of today there are 342 listed companies in the prime bourse with market cap exceeding 700,000 million (DSE, 2007). The reforms that DSE undertook recently for ensuring professionalism and transparency focused on the trading of securities. The measure were taken to implement transparent trading system, efficient reporting of trade, real time delivery of information, strong surveillance and monitoring over trade of securities and settlement of shares (Rahman,Uddin and Malik, 2006). 6.3.2.2 The Chittagong Stock Exchange Limited (CSE) The CSE is the countries second bourse that started its operation from the year 1995. It is also a self-regulatory non profit organization. Currently the numbers of listed securities are 223 of which the number of listed companies are 208, mutual funds 14, and one debenture. 6.4 Recent Capital Market Scenario of Bangladesh According to Dr Fakhruddin Ahmed (DSE, 2007) political uncertainty, corruption and lack of transparency in all section of the social and economic fabric are some of the reasons for capital market deficiency. Bangladesh Governor Salehuddin Ahmed (2007) reveals that foremost problems include political instability, under developed infrastructure, poor port management, short comings in legal system and corruption (Financial Express Report). On the other hand DSE general share price index reached its pinnacle and crossed 3000 points (Newage: www.newagebd.com). In fact the capital market witnessed a robust growth in the current year. Both turnover and market cap crossed new milestones at Tk 3000 million and Tk 700,000 million respectively during the year (DSE, 2006; DSE, 2007, IDLCSL). Recently our market cap crossed USD 10 billion that accounts for only 13% of its GDP which was only 8% a year back. (DSE Monthly Review, Oct 2007). Though the contribution of capital market to GDP is still inadequate when compared to neighboring countries but still its increase is significant for the development of our economy. Comparison of indices and market cap among different countries is shown in Table 2 and Figure 2 in the discussion part. Entry of 12 new issues worth Tk 11,322.95 million helped raise the market cap. Some of the reason for the progress in capital market development is central depository system and the automated trading system (ADB, 2006; SEC, 2005). The DSE has upgraded its automated online trading system and investors are able to trade from different parts of the country (SEC Quarterly Report, April-June 2007; ADB, 2006). Another reason for the vigorous improvement of the equity capital market is due to strenuous efforts taken by the SEC that further boosted investors’ confidence (DSE, 2007). 7.0 Research Methodology 7.1 Research Design The present study endeavored to explore importance of capital market for the economic development of Bangladesh and its future prospects. Exploratory research is selected as research design as little information exists about the capital market of Bangladesh. The aim of exploratory research is mainly to gain enough information before doing more thorough research. We basically start by gathering as much information about the object as possible and with a vague impression of what we should study (Cooper Schindler, 2003). 7.2 Research Instrument The research was conducted using both primary and secondary data. For collecting secondary data, various books, websites, newspapers, annual reports, monthly reviews and significant articles were chosen. Also for collection of primary data in-depth interviews with a range of designated professional, related to this field, were taken. 7.3 Data Collection Secondary data used in the paper has been collected through access of different source of books, journals, publications of DSE, SEC, ADB and other news paper and articles. The DSE and SEC library were visited to acquire secondary information. Various websites were browsed to collect relevant articles that are circulated on online sites. For collecting primary data, in-depth interviews of experienced people related to this field of capital market were taken. Appointments were fixed initially and then the interviews were taken. The interviewed persons are Kh. Asadul Islam, CEO, IDLC Securities Limited (IDLCSL); Anwarul Kabir Bhuiyan, SEC, Executive Director; Tania Sharmin, SEC, Assistance Director (Surveillance); Abul Ehsan, Senior Officer, IDLC Finance Limited; Moumita Manzoor, Research Associate, IDLCSL. Each of them was interviewed for 40 minutes approximately during the office hour while taking break from work. They were asked some essential questions associated to this research topic. Some of the questions that were asked are as follows- What is the role of capital market in the economy? What are the setbacks of the stock market in Bangladesh? Explain the current scenario of the capital market What are the prospective sign of the development of the capital market? How can we be sure of a sound growth of capital market in Bangladesh? Do you see a better or worse scenario ahead of us and why? 8.0 Discussion 8.1 Role of Capital Market in the Economy According to Dr. Mirza Azizul Islam (2006) capital market can play an essential role in enhancing economic development through efficient intermediation of savings into productive investments and in encouraging the expansion of private entrepreneurship (DSE, 2006). The primary market can contribute to the growth of private entrepreneurship by facilitating the entrepreneurs to raise funds from surplus savers and consequently finance investment in a cost-effective manner. For instance, if an industrialist with a viable new investment or expansion proposal is unable to execute his plan due to financial crisis then he can issue securities to meet the required deficit. Moreover issuing shares have the additional advantage that they do not create fixed charges for the companies issuing them and hence endows a better option than, say, financing through bank loans. A proficient and vibrant secondary market can also contribute copiously to economic growth. If a company, for instance, is well-managed and the secondary market prices are higher than face value, subsequent rights issue can obtain premium. Therefore the company can finance its development plan in lucrative and cost-effective approach. So the capital market not only provides opportunity for companies to borrow funds needed for long term investment purposes but also provides avenue for the marketing of shares and other securities in order to raise fresh funds for expansion of operations, leading to increase in output or productivity. The equity market offers opportunity for government to finance projects aimed at providing essential amenities for socio-economic development. Such market encourages inflow of foreign capital when foreign companies or investors invest in domestic securities. The securities market can help attain higher productivity by restructuring of ownership and management of the company as secondary market provides an exit option for the original founders and it also creates an avenue for the populace to participate in the corporate sector of the economy and share in its wealth through ownership of securities. So it not only reduces the over-reliance of the corporate sector on short term finance for long term projects but truly makes available the needed money for venture capital development which could serve as a vehicle for industrial development. So through its allocating mechanism, the capital market ensures an efficient and effective distribution of scarce financial resources for the optimal benefit to the economy. 8.2 Major Setbacks of the Capital Market Investment in capital market is limited to a small proportion of the population. Investors’ confidence in the capital market has not entirely recovered since the stock market crash in 1996. Share market debacle in 1996 was mainly the result of market manipulation by a section of stockbrokers in collaboration with some other market participants (SEC, 1997). Some of the other notable reasons behind the stock market crash includes insider-trading and off-loading of shares by directors of the company, absence of circuit breaker in the securities market, disclosure of unregulated rumors and sensitive information, lack of attention given by investors to the relation between stock price and company fundamentals, weak regulatory body to name a few. The diagram below shows clearly the catastrophe that took place during 1996. Figure 1 DSE General Price Index (DGEN) 1993-2007 (Source: IDLCSL) On November, 2001 the DSE introduced the benchmark price barometer DSE General Index (DGEN) with a base index of 817.62 points. The index excludes companies of Z category and is calculated on the basis of price movement of individual stocks. Figure 1 displays the monthly DSE general index from the year January 1993 to November 2007, the latest month for which the data was available. From the diagram we can tell that the market behaved irrationally during the year 1996. The DSE all share price index rose from 832 in 1 January 1996 to 3567 in 14 November of the same year, i.e. DGEN rose from 1106 to 4738.83. This conspicuous rise in DSI was followed by a drastic fall to 2261.47 points in the last week of December 1996 and again to 1140.65 points on April 1997. The market was dreary for a long period of time after the 1996 collapse but between July 20003 and June 2005, DGEN more than doubled from 823 to 1727. It appears that the index is performing modestly in the current year followed by an uptrend as it shows an increase in the index from 1527.29 in November 2006 to 3011.60 in November 2007, reaching its pinnacle after 1996. The devastating history of 96 crashes still persists in the mind of potential investors but without mass participation the market cannot sustain in the long-run. Also it needs to bring back the foreign investors that fled in the 1996 debacle. Inflows of foreign direct investment need to be restored to stabilize the economy. From the statistical data below in Table 1 it can be observed that foreign investors are least attracted to the securities market of Bangladesh. There were significant foreign investment inflows into equities in the year 1994 amounting to $ 106 million but by the mid 1997, most of the foreign portfolio investors had divested holdings and have not since returned. The following table contains the key capital market indicators reflecting that the pace of primary market development had been fluctuating and the market’s contribution to resource mobilization of the economy remains below potential and the secondary market remained stagnant during 1997-2003 but showed some sign of recovery in 2004. Overall, investor confidence has not yet fully recovered. Table 1 Capital Market Indicators- Dhaka Stock Exchange Item 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 No of Listed Companies 143 157 183 186 202 208 213 223 231 242 248 337 Market Cap In taka (mn) 18099 41771 56518 168106 71302 50254 44789 62932 63777 71269 97587 224923 In $ (mn) 455 1038 1409 3960 1569 1036 881 1169 1119 1229 1685 3709 Market Cap as % of GDP 1.44 3.08 3.71 10.11 3.95 2.51 2.04 2.65 2.52 2.61 3.25 6.76