Although the country's capital market witnessed a negative trend in 2005, it finished the year with some signs of resilience and maturity overcoming many ups and downs in indices.

The market experienced a bullish trend in March, fueling a fear of possible crisis. But eventually there was no crisis because of regulators' prompt actions and investors' sensible decision. In the later half of the year, the market witnessed a downtrend in indices mainly due to the government's monetary policies, which include rise in interest rates on savings certificates. The recent militant activities by Islamist groups have also cast a negative impact on the market.

But throughout the year the market performed well, analysts and observers said. They said both primary and secondary markets were vibrant. The investors also kept faith in new initial public offerings (IPOs).

Although a number of quality IPOs came to the market, some insurance companies with weak fundamentals entered the market last year, the analysts said.

The market absorbed 17 new issues, which raised a total of Tk 3,206.90 million from public through IPOs. Most of the IPOs were oversubscribed.

The over-subscription of IPOs proves that investors' have put faith in capital market, the analysts added.

Of the IPOs issued in 2005, 12

got listed on Dhaka Stock Exchange (DSE) while all the IPOs on Chittagong Stock Exchange (CSE).

The companies that issued IPOs in 2005 are Agrani Insurance Company Limited, Global Insurance Company Limited, Popular Life Insurance Company Ltd, Popular Life Insurance Company Ltd, Peoples Leasing and Financial Services Ltd, Meghna Life Insurance company Ltd, Grameen Mutual Fund One, Nitol Insurance Company Ltd, Prime Finance & Investment Ltd, Premier Leasing International Ltd, Asia Pacific General Insurance Company Limited, Summit Power Limited, Sonar Bangla Insurance Ltd, Islamic Finance and Investment Ltd, Progressive Life Insurance Company Ltd, Berger Paints Bangladesh Limited and Pragati Life Insurance Limited.

Of the 277 companies listed on DSE, 218 held annual general meetings, 131 companies and mutual funds declared dividends, 54 issued bonus shares and nine declared rights shares. Sixty-six companies did not declare dividends and 18 companies even did not hold AGMs.

Of the companies that declared dividend, two companies declared above 100 percent dividend while seven companies 51 to 100 percent, 13 companies 31 to 50 percent, 18 companies 21 to 30 percent, 47 companies 11 to 20 percent and 45 companies below 10 percent dividends.

Evaluating the capital market in 2005, DSE Chief Executive Officer Salahuddin Ahmed Khan said,

"Scrips with strong fundamentals performed well, which showed maturity of the market."

However, he said changes in the monetary policy caused a downslide in turnover at the later part of 2005 as the policy encouraged many investors to divert their investment to savings instruments.

Assessing the capital market in 2005, Mirza Azizul Islam, chairman of Securities and Exchange Commission, said the overall market situation was good and stable. "I am satisfied that the capital market as a whole behaved in a more matured manner without any abrupt fall or rise in share indices," he added.

Trading took place in 259 days on DSE and a total of 882,807,375 shares worth Tk 64,863,638,960 were transacted. The highest transaction in a single day was 10,858,566 shares worth Tk 585,854,926 while the lowest transaction was 1,029,222 shares worth Tk 86,868,334.

The prime indicator, DSE General Index, showed 16.12 percent fall at the end of year to close at 1677.35 points on

Thursday, the last trading day of the year, starting with 1999.71

points on January 1, 2005. The

index rose to the highest 1999.71 points on January 1 while the

lowest was 1434.65 points on May 2.

DSE All Share Price Index also declined 15.03 percent to close at 1275.05 points on December 29 beginning with 1500.50 points on January 1, 2005. The index reached highest 1500.5 points on March 28

while the lowest was 1099.07 points on May 2.

The DSE 20 Index also declined by 26.12 points to close at 1608.63 points on the last trading day starting with 2177.4 points on the first trading day of 2005. The index rose to the highest 2214.17 points on March 13 while the lowest was 1536.68 points on May 2.

The CSE All Share Price Index also lost 259.07 points or 7.12 percent from the opening day of last year to close at 3378.68 points on the last trading day.

The much-talked about event during the year was Premier Bank IPO scam. The Securities and Exchange Commission (SEC) suspended Premier Bank's Tk 55 crore IPO on February 12. The capital market watchdog froze the IPO following the unearthing of 25,000 fake beneficiary owners' (BO) accounts in its preliminary investigation.

A probe committee of Bangladesh Bank also found that Premier Bank managing director had influenced opening of fake beneficiary owners (BO) accounts showing irregular bank accounts to grab major shares in the IPO offer. The central bank had earlier formed the probe team to investigate the scam after allegations that the Premier Bank management designed the attempt to grab the shares.

Another much-talked about issue was the secondary bond market, which was introduced on DSE on January 1 last year, it remained dysfunctional all the year round.