Executive summary

The purpose of this report is to gain knowledge about the products and services of Asset
management companies operating in Bangladesh and gain insight about the buy-side and sell
side activities conducted by firms operating in Bangladesh. The products and services offered by
AMC’s are generalized and for mass group of people. There are no individual investment
services provided by AMC’s and most of their clients are institutional investors and foreign
investors. the interviews from buy-side, sell-side, portfolio managers and traders encompass
views that mostly match with what we have been taught in our classes. Still there are some
discrepancies but on a broad outlook the investment management industry is growing and better
things are to be expected in the future in the capital market and in the overall investment
management industry in Bangladesh.

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Table of Contents
Executive summary ....................................................................................................................... 1

Task-1 ............................................................................................................................................. 3

1.1 ICB Asset Management Company Ltd ................................................................................. 3

1.2 CAPM (Capital & Asset Portfolio Management) Company Limited ................................... 6

1.3 LR Global Bangladesh Asset Management Company Limited ............................................ 8

1.4 VIPB Asset Management Company Limited ....................................................................... 9

1.5 Alliance Capital Asset Management Limited ..................................................................... 11

1.6 Zenith Investment Ltd ......................................................................................................... 13

1.7 Prime Finance Capital Management Limited .................................................................... 14

Task-2 ........................................................................................................................................... 16

2.1 Sell side analyst interview findings: ................................................................................... 16

2.2 Practices in Buy Side Analysis in Bangladesh ................................................................... 17

2.3 Portfolio Manager Interview Findings ............................................................................... 18

2.3 Findings from trade executive interview: ........................................................................... 20

Appendix ...................................................................................................................................... 22

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 Task-1

1.1 ICB Asset Management Company Ltd

ICB Asset Management Company Ltd. is a subsidiary of Investment Corporation of Bangladesh
(ICB). The Company was created as a part of the restructuring programme of ICB under Capital
Market Development Programme (CMDP) initiated by the Government of Bangladesh and the
Asian Development Bank. The Company was incorporated as a public limited company with an
authorized capital of Tk. 1.00 billion and a paid-up capital of Tk. 50.00 million under the
Companies Act, 1994.The Company obtained license on 14 October, 2001 from the Securities
and Exchange Commission under Securities and Exchange Commission (Mutual Fund) Rules,
2001 to carry out the mutual fund activities.

The company is engaged in investment management; more specifically floating and managing
both open end and closed end mutual funds, provident funds etc. The company is dedicated
towards development of mutual fund industry as well as the capital market of Bangladesh.

Products:

Open ended funds:

• ICB AMC Unit Fund

The objectives of the Fund are to provide regular income and capital appreciation in the long run
through prudent investment management. Not more than 25 % of the total assets of the fund will
be invested in Fixed Income Securities (FIS). Not less than 75 % of the total assets of the fund
will be invested in capital market instruments out of which at least 50 per cent will be invested in
listed securities.

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Rights of the Unit Holders

Item Description
Dividend Minimum 70% net income of the fund will be distributed as
dividend.
Exemption from Dividend income is tax free to the individual investor upto Tk.
Tax 25000
Transfer of Units are transferable by way of inheritance/gift and or by specific
Units : operation of law.
Lien Loan facilities are available by pledging the units from the banks &
financial institutions.

ICB AMCL Pension Holders' Unit Fund

Fund is open to retired employees of Government, Semi Government, and autonomous body,
Sector Corporation, nationalized commercial banks, financial institutions and insurance
corporations. Minimum and maximum limit of investments are 100 and 50,000 units respectively
Minimum yearly guaranteed return @ Tk. 9.00 per unit for first 5 (five) yearswith a scope of
capital appreciation.

Rights of the Unit Holders

Item Description
Return : The fund shall pay minimum yearly guaranteed return @ Tk.
9.00 per unit for first 5 (five) years. The return will be
cumulative i.e. if the guaranteed return for a particular
period/year cannot be paid due to insufficient income of the
fund, it will be payable subsequently within 3 (three) years
along with the regular return.
Mode of Distribution : The return will be paid semi-annually.
Transfer of Units : Units are not transferable.
Lien Loan facilities are available by pledging the units from the

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 banks & financial institutions.
Re-investment : The investors can re-invest the income of the fund at a
concessional rate of Tk. 1.00 per unit than the prevailing sale
price .

Other open-ended products are-

 Bangladesh Fund
 ICB AMCL Converted First Unit Fund
 ICB AMCL Islamic Unit Fund
 First ICB Unit Fund
 Second ICB Unit Fund
 Third ICB Unit Fund
 Fourth ICB Unit Fund
 Fifth ICB Unit Fund
 Sixth ICB Unit Fund
 Seventh ICB Unit Fund
 Eighth ICB Unit Fund

Close ended funds:

• ICB AMCL Second NRB Mutual Fund

• Prime Finance First Mutual Fund
• ICB AMCL Second Mutual Fund
• ICB Employees Provident Mutual Fund One : Scheme One
• Prime Bank 1st ICB AMCL Mutual Fund
• Phoenix Finance 1st Mutual Fund
• ICB AMCL Third NRB Mutual Fund
• IFIL Islamic Mutual Fund-1
• ICB AMCL Sonali Bank Limited 1st Mutual Fund

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1.2 CAPM (Capital & Asset Portfolio Management) Company Limited
It has started it’sjourney in the capital market arena of Bangladesh a new generation Asset
Management Company (AMC) with the obsession to deliver the most innovative, prompt and
cost effective financial solutions to the investors around the country. CAPM has been
incorporated as private limited company under Registrar of Joint Stock Companies (RJSC) in
January 2011 and licensed as AMC in September 2011 under Securities and Exchanges
Commission (Mutual Fund) Rules 2001.CAPM is the only joint venture asset management
company of Bangladesh, promoted by a group of UK NRB and local entrepreneurs.

Products of CAPM:

Mutual Funds
Each scheme of our Mutual Funds is managed by devising a different investment strategy which
is reflective of the investors profile and carries with it different risks and rewards.
The mutual funds include-

CAPM Unit Fund

"CAPM Unit Fund" is the first time ever digitized open-end mutual fund in Bangladesh designed
to provide capital appreciation benefits with regular dividend income opportunities. The fund is
characterized with perpetual life and unlimited size due to the instinctive individuality of the
open-ended funds.
It is a self-sponsored and managed Mutual Fund in Bangladesh has been formed with the
objective of long term capital appreciation with regular dividend income by investing in a
diversified portfolio predominantly consisting of equity and debt related securities of the
Bangladesh Capital Market. The second objective is to outperform Bangladesh price inflation in
the long run.

CAPM Islamic Fund

CAPM Islamic Unit Fund (Proposed) would be a Shariah compliant Mutual Fund. The fund will
also be an open-ended with perpetual life and unlimited size in nature.

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CAPM BDBL Mutual Fund 01
CAPM BDBL Mutual Fund 01 is the foremost closed- end mutual fund of CAPM Company Ltd.
The asset is intended to give financial specialists an above-normal level of current wage. The
target of the asset is to accomplish payment of better profit consistently to unit holders with
capital appreciation benefits in long tenure through investments in equity and obligation related
securities of Bangladesh Capital Market.
Institutional portfolio

Customized IPMS:

CAPM manages clients’ investment based on their preferred investment styles.

Services of CAPM

1. Mutual Fund Management Services

CAPM delivers global standard ethically managed mutual funds management services to the
esteemed investors around the country. Their investment strategies and process orientation will
make safe and above average return. Through automation, standardization and centralization,
their serviced Mutual Funds will generate positive returns regardless of stock market trends in
the long run.

2. Institutional Portfolio Management Services

CAPM offers a wide range of customized investment solutions to all their institutional clients.
Their IPMS services will allow
- getting a help in Smart Investing
- routine income with growth
- hassle free day-to-day management

3. Provided Fund Management Services

CAPM has come up with a very professionally designed ingenious fund management solution
under the brand, Provident Fund Management Services. The Provident Fund Management
Services has been intended to deliver better retirement benefits to the employees at their
departure. This service will also strengthen the current social security system of the country.

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CAPM as a BSEC licensed Asset Management Company in Bangladesh offers three different
services under Provident Fund Management Services. They are –

 Management of Provident Funds

 Administration of Provident Funds
 Provident Fund Setup Service

1.3 LR Global Bangladesh Asset Management Company Limited

LR Global Bangladesh Asset Management Company Ltd. is a privately-owned investment
manager. LR Global Bangladesh Asset Management Company Ltd was founded on January 15,
2008 and is based in Dhaka, Bangladesh. The firm invests in the public equity markets of the
frontier markers. It employs fundamental analysis along with a combination of bottom-up and
top-down stock picking approach to create its portfolios.

Products:

1) Open ended funds:

Buying and selling: Open ended fund allows investors to have a great deal of flexibility
regarding the purchase and sales. Investors can buy or sell units directly through the fund
manager at all times.

Price stability: Investors can buy and sell units of open-ended funds directly at a price per unit
which is based on the fund’s underlying securities. As a result, prices do not fluctuate as much as
listed funds

2) Close ended funds:

Long-term vision: Close-ended funds have a fixed maturity period and the funds do not face any
interruption of partial redemption before maturity. It allows the company to employ it’s long-
term view to their asset allocation and security selection process fully and also to maximizes the
return.

Steady income: The unit holders enjoy steady cash flow from regular dividend disbursements.

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Benefits of listing: Close-ended funds are easy to buy and sell. Investors can easily purchase
units from public markets and access all the benefits accessible through his/her brokerage
account.

Services: (Managed accounts)

1) Institutions

Portfolio Devepoment: This service is provided to the institutions that have investable funds and
the company also formulates custom investment policy that reflects the specific needs of the
clients.

Portfolio Advisory: This service is provided to the institutional clients.

Distressed Portfolio Management: The company provides this service to rebalance distressed
portfolios that have substantial unrealized losses.

2) High net worth individuals

Investment Advisory: The company develops custom investment plans that resonate with the
unique needs and risk appetite of the high net worth clients.

1.4 VIPB Asset Management Company Limited

VIPB Asset Management Company Limited, one of the pioneer investment management
companies in Bangladesh, is a subsidiary of Venture Investment Partners Bangladesh Limited,
the first venture capital financing company in the country. It is licensed and regulated by
Bangladesh Securities and Exchange Commission (BSEC). It is backed by reputed local
financial institutions such as The City Bank, National Credit and Commerce Bank, Southeast
Bank and National Life Insurance Company and some US based companies owned by prominent
Non-Resident Bangladeshis (NRBs).

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Specialties

 Capital Market research

 Macroeconomic research
 Mutual Fund management
 Portfolio analysis
Product and Services

1. Closed End Funds

VIPB Asset Management Company limited manages closed end mutual funds with a view to
maximize investor return. Currently it is managing two closed end mutual fund.
a. Southeast Bank 1st Mutual Fund
Minimum 70% realized income of the Fund will
Dividend
be distributed as dividend.

The dividend will be distributed within 45 days

Distribution
from the date of declaration.

b. NLI First Mutual Fund

Minimum 70% realized income of the Fund will be

Dividend
distributed as dividend.

The dividend will be distributed within 45 days

Distribution
from the date of declaration.

2. Open Ended Fund

With the successful track record of closed end mutual fund management the company has
decided to manage open ended mutual funds as well. The company is operating VIPB
Accelerated Income Unit Fund, which has started its operation in 2016. The company is
determined to continue its successful performance in open ended fund management as well.
VIPB Accelerated Income Unit Fund

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Dividend Minimum 70% realized income of the Fund
will be distributed as dividend.

Distribution The dividend will be distributed within 45 days

from the date of declaration.

1.5 Alliance Capital Asset Management Limited

Services

1. Mutual Fund

Bangladesh equity market is characterized by relatively high riskiness for individual investors
and so the company creates opportunity to gain more through careful investment management in
mutual funds.

The country has two exchanges – Dhaka Stock Exchange Limited and Chittagong Stock and
ACAML has wide experience and expertise of investment in securities primarily in equities in
both these exchanges through Mutual Funds.

2. Discretionary Portfolio Management

For discretionary portfolio management, ACAML uses their experience to build up the investors
portfolio of investments to bring out the best in it.

3. Alliance Managed Portfolio

Alliance Managed Portfolio (AMP) is a discretionary portfolio management service which

emphasizes on a structured approach for institutional investors in capital market. The main
objective is to create value through the active management of the portfolio, risk minimization
and protection of capital in any economic condition.

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Alliance Portfolio Advisory Services

Alliance Portfolio Advisory Services are focused on reconstruction of existing portfolios by

providing advisory services on investing in securities such as stocks, bonds, mutual funds
through an experienced portfolio management team.

Alliance S&P Bangladesh Shariah Index Tracking Portfolio Service

Alliance S&P Bangladesh Shariah Index Tracking Portfolio Service (AS&PBSITP) brings a
whole new experience first time ever in the portfolio management industry of Bangladesh with a
product which is the combination of many unique features. The key features are:

 Shariah based Islamic index tracking portfolio management under Discretionary Portfolio
Management Services
 Tracking of S&P BMI Bangladesh Shariah Index, designed and calculated by one of the
world’s leaders in indices provider; Standard & Poor’s Indices
 World’s leading and top Islamic scholars as Shariah board members
 Ability to attract investors of all faiths for good governance

4. Corporate Advisory

The ACAML’s Corporate Advisory business provides classical strategic and tactical advice and
unparalleled execution to public and private companies and financial sponsors across a broad
range of industry sectors.

Merger and Acquisition

In advising companies on the acquisition of a company or set of assets, ACAML evaluates

potential acquisition targets, provides valuation analyses, and evaluate and propose financial and
strategic alternatives. It also advises as to the timing, structure, financing, and pricing of a
proposed acquisition, and assist in negotiating and closing the deal.

Divestitures and sales transactions

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ACAML advises its clients contemplating the sale of certain businesses, assets, or their entire
company by evaluating and recommending financial and strategic alternatives with respect to the
sale, advising on the appropriate sales process for the situation and valuation issues, and
preparing an offering memorandum and other appropriate sales materials.

Joint Venture

The company advises clients on joint venture deal structuring and negotiations by identifying
potential partners to pressure-testing term sheets and deal concepts and other regulatory & legal
activities.

1.6 Zenith Investment Ltd

Zenith Investment Limited is an asset management company that gathers funds from different
pool of intuitional investors and invests those funds in the capital market with the guidance of
experienced fund managers. The fund managers uses sophisticated tools and software’s in order
to make investment decisions to generate profit and mitigate risks for investors. It is licensed and
regulated by Bangladesh Securities and Exchange Commission (BSEC).

Professional management of assets is widely viewed as imperative for amassing small savings of
the society and efficient allocation of resources among the deserving sectors of the economy.
The enterprise also commits to bring in disciplined investment culture in our capital market.

Products:

1. Open ended funds:

An open-end fund is one that is available for subscription all through the year and is not
listed on the stock exchanges. Investors have the flexibility to buy or sell any part of their
investment at any time at a price linked to the fund's Net Asset Value.
2. Closed End Mutual Fund:
A closed-end fund has a fixed number of shares outstanding and operates for a fixed
duration. The fund would be open for subscription only during a specified period and
there is an even balance of buyers and sellers. Closed-end funds are also listed on the
stock exchange so it is traded just like other stocks on an exchange or over the counter.

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Services:

1. Corporate Advisory Services

Zenith’s exquisite Corporate Advisory process is design to provide a roadmap to build

company’s pillars of strengths. This process can help visualizing the financial future for
company and alliances-and outlines the steps to achieve it.

Develop core understanding: The process begins with an in-depth conversation with your
Financial Advisor to help you clarify your financial goals as well as your investment preferences
and risk tolerance.

Conduct in-depth analysis: As your Corporate Advisor, we can analyze your current and future
financial situation and address potential shortfalls as well as the impact of unexpected life events.

Tailor made solutions that fit the need: We can create a customized strategy to help you achieve
your organizational objectives.

Implement and deliver: We can offer you a broad array of products and services to aid in
carrying out your organizational tasks and achievements aligning with your strategy.

2. Institutional Fund Management:

Zenith Investments is committed to bring versatility in managing institutional funds that keep the
fund’s return on top for all seasons. Dynamic investment philosophies are designed to harvest on
every bit of opportunities to keep the return at its fullest while keep a floor to let the funds roll on
top of the market during hard times.

1.7 Prime Finance Capital Management Limited

Prime Finance Capital Management Limited (PFCML) is a subsidiary of country’s leading
financial institution-Prime Finance & Investment Limited. PFCML has been in the capital
market as a full-fledged merchant bank in the name of merchant banking wing of Prime Finance

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& Investment Limited to serve individual clients, small and large companies with a full range of
issue management, underwriting, portfolio management and corporate advisory services.

However, as per SEC’s guidelines, the merchant banking wing was converted into separate
subsidiary company and was incorporated in 18 March 2010 as a public limited company with an
authorized capital of Tk. 2,500 (two thousand five hundred) million and an initial paid-up capital
of Tk. 1,000 (one thousand) million.

Product & Services:

1. Issue Management

Prime Finance Capital Management has a track record of providing issue management service
for more than 14 years to our clients across the country. Unique combination of professionals
with deep industry expertise and extensive issue management experience enables to deliver a
consistently high quality of issue management service to clients countrywide.

2.Underwriting

As a full-fledged merchant bank, Prime Finance Capital Management Limited actively

participates in underwriting of Initial Public Offering (IPOs), Repeat Public Offering, Rights
Issues, Alternative Securities like various types of Bonds. This is one of the largest capital base
merchant banks in Bangladesh that helped it to accomplished 73 underwriting to public issues till
December 2010.

3.Portfolio Management

Prime Finance Capital Management Limited provides portfolio management services with high
standard, excellent customer services, professionalism. Clients receive tailored financial
solutions for trading securities. Currently it has more than a thousand portfolios managed
through 4 designated brokerage houses.

4.Merger & Acquisition

PFCML delivers strategic advisory services to companies countrywide. It covers the entire
spectrum of strategic alternatives available to clients, including acquisitions, divestitures,

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restructurings, leveraged buyouts, takeover defense, special committee assignments and
exclusive sales.
5.Corporate Advisory Service

Corporate Advisory services provide advice in connection with a wide range of strategic and
financial matters that are typically of great importance for clients. Its goal is to continue to grow
business by fostering long-term, senior-level relationships with existing and new clients as their
independent advisor on strategic transactions such as mergers, acquisitions, restructurings and
other financial matters the detail of which is as under:

Task-2

2.1 Sell side analyst interview findings:

Most often we find it difficult to match what we have learned in through our academic studies
and what are actually followed in real life scenarios. So, we interviewed Md. Nafeez al Tarik,
CFA, FRM, Head of research of City brokerage limited and Khairul Bashar, CFA, research
analyst of City brokerage limited to gain a better insight. Here we present our findings briefly-

1. Research report preparation: For investment decision making they rely on research
reports which are prepared by the sell side analysts and no decision is taken or trade is
executed without proper research in city brokerage.
2. Sources of information: Analysts collect data from publicly available sources such as
company annual reports, bureau of statistics, BSEC and other external sources such as
analyst meetings, discussion with management of companies.
3. Procedure of research: For research they follow structured procedures to be specific
they follow top down approach. Typically, different analysts cover different market segments
and industries and they start with economy and industry analysis and try to identify some
specific companies and then prepare detailed research reports on them.
4. Generating Forecasts: For generating forecasts the generally take a forward-looking
approach and take insights and from the economy and company’s historical correlation with
economy and past record.

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5. Valuation metrics: The choice of valuation model generally depends on the purpose of
the analysis, the nature of the company and the scenario. The valuation model which yields
the best results according to the circumstance is chosen. In general, free cash flow models are
preferred and Relative valuation is also widely used for quick valuation estimates and trade
execution.
6. Trade execution: Sell side analysts prepare research reports and decisions to whether
buy, sell or hold. The trades are executed by the trade executives and the analysts just send
instructions to them.

Our opinion: From the interview we can assert that the activities and procedure followed by
the sell side analysts in city brokerage match with the procedures that we have learned through
our academic process.

2.2 Practices in Buy Side Analysis in Bangladesh

Buy side analysis are done by buy side analysts recruited in merchant banks or investment banks,
asset management companies. We have interviewed a buy side analyst of Lanka Bangla
Investment Limited to update our understanding of the real world work practices of a buy side
analyst. We have interviewed Ahnaf Saber, Analyst Research of Lanka Bangla Investment
Limited. The following sections shows the findings of this interview done with structured
questionnaire.

Dependence on the research reports by sell side analysts: They sometimes consider the
research reports of sell side analysts. Most of the times, they conduct their own research. But,
they consider the recommendations of the sell side analysts to ensure the efficiency of their
investment recommendation sent to the portfolio manager or chief investment officer. However,
they collects sell side report from their own group member, Lanka Bangla Securities Limited.

Structured Procedures for making investment recommendations: They follow top down
approach to come up with an investment recommendations. The economy level analysis and
sector level analysis are done first. This tasks are done by sell side analysts. Buy side analysts
also perform it the extent of the depth of the analysis is not as deep as sell side. Then they find
out the key players in that sectors. Finally, they determine the best companies to invest their

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fund. They consider the future impact of different strategic decisions on the earnings of these
companies.

Use of external information in analysis: Buy side analysts in Lanka Bangla Investment Limited
use only available published public information. One of the most important source of external
information is Analysts’ Conferences conducted by companies such as Brac Bank Limited.

Use of valuation models to support the given recommendation: The use different valuation
model to come up with intrinsic value of the securities. For example, they use residual earning
valuation model for the valuation of the banking sector. The mostly used method is the free cash
flow model. They mentioned a critical remark on the usefulness of the relative valuation in our
capital market. They multiply the forecasted EPS of a stock with its sector P/E to get a rough
estimates of the intrinsic value of a securities.

Opinion on the Practices in Buy Side Analysis in Bangladesh

Almost 90% practices in the buy side analysis done by buy side analyst match with the standard
practices learned in our course and the steps in the portfolio management process.

2.3 Portfolio Manager Interview Findings

To learn about the activities of a portfolio manager in Bangladesh, we took an interview of Md.
Abdul Muntakim, CFA, the Chief Investment Officer of Lanka Bangla Investment Limited.
What came out as findings out of the interview is given below:

 Types of Client:
Lanka Bangla Investments Limited deals with both institutional and individual investors. They
maintain separate departments for handling these two distinct client group.

 Investment Policy Statements:

Chief Investment Officer of Lanka Bangla Investment Limited informed us that Lanka Bangla do
not formulate investment policy statement for each of the client. They provide two types of
portfolio management services for example, Discretionary Portfolio Management (Alpha Plus)
and Non-Discretionary Portfolio (IPA Scheme). They give more importance on investment
policy statement while providing discretionary portfolio management service in order to avoid
any biasness of the portfolio manager.

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On the other hand, Lanka Bangla Investment Limited formulate investment policy statement on
the basis of their product. They have investment policy statement for Lanka Bangla Nishchinto,
Alpha Plus, IPA scheme, Alpha Plus spirit, Alpha Plus NRB and Alpha Plus Starter. In
conclusion we can say that Lanka Bangla do not have any customer oriented investment policy
statement.

 Specific Needs and Objectives of the Investor:

Lanka Bangla Investment Limited’s policy is not carefully designed to meet the specific needs
and objectives of the particular investor. They are mainly formulated for the group of investors.
They made groups of investor on the basis of the similar characteristic of various investors.

 Awareness of Clients about Risks:

Lanka Bangla Investment Limited made customer fully aware of the probable risks they might
go through. They also adjust the portfolio when the client’s willingness to take risk and ability to
take risk changes. They also adjust the return objective according to the risk.

 Standards for Evaluating Portfolio Performance:

Lanka Bangla Investment Limited follows benchmark portfolio approach and index
benchmarking approach for evaluating performance. When the portfolio outperforms the
benchmark portfolio or index they mark the portfolio as good. Their main objective is to
outperform the benchmark portfolio or index.

 Types of Investment Strategy:

Chief Investment Officer of Lanka Bangla Investment Limited informed us that Lanka Bangla
Investment Limited always follow active strategy for managing the portfolio. They always
change the asset allocation of the client when financial, economic, political and social conditions
of the country changes.

 Monitoring & Rebalancing:

Lanka Bangla Investment Limited monitors portfolios of the client regularly and carefully.
Lanka Bangla Investment Limited reports to the discretionary portfolio management client
quarterly. They have to report to the client in every three months and have to rebalances the asset
allocation if deviation occurs. In case of Non-Discretionary client, they have to report to them
semiannually.

 Asset Allocation:
In managing the asset allocation of the portfolio Lanka Bangla Investment Limited mainly focus
on stock and cash asset class. As bond market in Bangladesh is not so established they

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sometimes avoids them. They allocate the portfolio in stock and cash based on the market
expectation.

 Valuation Techniques:
Chief Investment Officer tells us that Residual Earnings Model is typically used for valuing bank
and Free Cash Flow model is used for other sectors. They also use sector P/E approach for
valuation which is found by multiplying expected EPS with sector P/E. Theoretically we know
that discount rate can be found by CAPM, Fama Fench Model, Build up method etc. In the
context of Bangladesh discount rate is identified using Build up Approach because other models
variables are very volatile.

 Efficient Portfolio Theory & Behavioral Finance:

Theoretically we know that asset allocation is done using efficient portfolio theory but the chief
officer of Lanka Bangla Investment Limited informed us that their portfolio manager does not
always follow Efficient Portfolio Theory in Managing portfolio. He moderately agrees with the
statement that a portfolio manager should always follow efficient portfolio theory. He added that
in the context of Bangladesh Behavioral Finance is more important than efficient portfolio
theory. They took decision by combining behavioral finance with efficient portfolio theory.

In portfolio management, no doubt is there that theoretical aspects are important. But the
findings of ours proved that reality does not necessarily follow the theory in every way.
Behavioral finance proved more real than the structured one. Practical ground of finance is
absolutely more diverse and requires unique approaches for every single client. The roles of a
portfolio manager differ from client to client, situation to situation and most importantly purpose
to purpose.

2.3 Findings from trade executive interview:

To understand the trading process, we interviewed Md. Tariqul alam tariq, trade executive of
Lankabangla securities limited. Here is what we learned-

1. Trading Facilities:

Lankabangla provides 3 options to its customers to execute trades-

1. On the floor trading: Many customers tend to attend brokerage houses and give spot
instructions to the trading floor brokers to execute trades on their accounts.

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 2. DSE mobile app: Customers are now more interested in mobile trading as it is more
efficient and time saving.
3. Online desktop trading: investors can also execute trades online thorough their
lankabangla accounts on their own.
2. BO accounts facilities:

Traders also deal with customers and provide services related to account management. They
provide clients with current statements of their portfolio and also provide margin facilities to
their clients

3. Other activities:

Other activities covered by traders include responding to customer mails and providing i-broker
facilities.

Our Opinion: Our findings from the interview of the trader executive mostly match with the
curriculum books followed in classes except mobile trading, desktop trading facilities and
mailing services.

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Appendix

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