Chittagong Stock Exchange

Prioritize exposure to undervalued industrial and pharmaceutical stocks on the Chittagong Stock Exchange (CSE)–the bourse’s All Share Price Index climbed 12.4% in 2022 and 8.7% in 2023, outperforming regional peers in volatility-adjusted returns. Companies like Beximco Pharmaceuticals and Ashraf Textile Mills traded at price-to-earnings ratios below 10x in Q1 2024, signaling potential for revaluation as export demand stabilizes.

Aim for a 60% allocation to large-cap equities and 40% to mid-cap growth stocks to balance risk and liquidity. The CSE’s average daily turnover surged to $18.2 million in March 2024, up 23% year-on-year, with institutions favoring blue chips like Square Pharma. Mid-caps in renewable energy, such as Rahimafrooz Solar, saw 15% quarterly revenue growth, supported by government subsidies.

Leverage the CSE’s 0.30% brokerage fee structure, which remains 33% cheaper than Dhaka Stock Exchange (DSE) rates. Regulatory upgrades, including real-time settlement cycles introduced in December 2023, reduced trade failure risks by 19%. Monitor the newly launched Sustainability Bond Framework, expected to channel $50 million into green infrastructure projects by Q4 2024.

How to Open and Manage a Trading Account on CSE: Step-by-Step Guide

Verify eligibility requirements: You must be 18+ with a valid national ID (NID), tax identification number (TIN), and a bank account in Bangladesh.

1. Select a TREC holder:

Access the CSE website’s broker directory for licensed Trading Right Entitlement Certificate (TREC) holders
Compare brokerage fees (typically 0.3%–0.5% per transaction) and digital tools

2. Submit documentation:

Completed account opening form (physical or online)
Notarized NID copy and passport-sized photos
Bank account statement (last 6 months)
TIN certificate copy

3. Activate your BO account:

Register a Beneficiary Owner (BO) account via Central Depository Bangladesh Limited (CDBL) through your broker
Link your BO account with the trading account for share settlements

4. Fund the account:

Deposit initial capital (minimum varies by broker; Tk 10,000 common)
Use electronic fund transfer (EFT) from linked bank accounts

5. Execute trades:

Place orders via broker’s online portal, mobile app, or phone call
Monitor real-time prices using CSE’s live market feed
Confirm trade confirmations within 24 hours

6. Maintain compliance:

Update KYC documents every 2 years or after material changes
Settle dues within 3 working days to avoid trading suspensions
Review monthly statements for discrepancies

7. Adjust strategies:

Analyze CSE’s daily trade summaries for sector trends
Set price alerts through broker platforms for volatile stocks
Rebalance portfolios quarterly using CSE indices as benchmarks

Tax obligations:

File 15% capital gains tax if annual profit exceeds Tk 50,00,000
Report dividend income under “Income from Other Sources”

Key Investment Sectors on CSE: Identifying Emerging Growth Trends

Pharmaceuticals: Over 98% of Bangladesh’s domestic drug demand is met locally, with exports growing at 17.2% CAGR since 2020. Companies like Beximco Pharma and Square Pharma expanded margins by 22% YoY in 2023. Prioritize firms with FDA-approved facilities targeting export markets in Africa and Asia.

Textiles & Apparel: Contributed 84.6% of Bangladesh’s $55.5B FY2022-23 export revenue. Synthetic fiber manufacturers gained 34% revenue growth as global brands shift from cotton. Monitor firms securing renewable energy credits to mitigate 12-15% energy cost hikes.

Banking: Digital transaction adoption surged 89% since 2021, with mobile banking users exceeding 70M. Focus on banks maintaining sub-5% NPL ratios (e.g., Eastern Bank) while expanding SME loan portfolios, up 19.3% in Q1 2024.

Energy: Renewable capacity doubled to 1,125 MW since 2022; target 4,100 MW by 2030. Summit Power and United Group dominate IPP contracts, reporting 26-31% profit growth from LNG and solar hybrid projects. Track firms securing Japan International Cooperation Agency financing.

Telecommunications: 4G penetration hit 49% in 2023, driving 28% data revenue growth for market leader Grameenphone. Ride spectrum-auction volatility by targeting undervalued infrastructure providers like Summit Telecom.

Agro-Processing: Cold storage operators saw 41% stock gains in 2023 as vegetable export demand climbed 32%. Invest in firms integrating IoT-based supply chains to minimize 25-30% post-harvest losses.