Investment Risk Management and Financial Performance Analysis of IDLC Securities Limited

Abstract

The stock market also known as the share market is a public market involved in the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. Usually, a stock market is a representation of the country’s economic situation and the broker houses are viewed as the representation of the stock market of the country. A broker house is an entity that has the polish permission of Securities and Exchange, among others, to offer securities in public trading acquire and sell securities, and offer portfolio management and investment advice services to its clients. However, as a member of DSE and CSE the broker house does this service for their client’s commission in return on each transaction. That means more transactions equals to more commission for houses and more wealth for it. Up until 1998 broker houses were comparatively inactive in Bangladesh as people used to buy and sell their paper shares directly to buyers or sellers’ hand to hand. This hand-to-hand transaction was an extremely slow process and full of complications. After CDBL (Central Depository of Bangladesh Limited) was established, the trade became extraordinarily faster than what it was before. As a result, the investors in the share market have been increasing tremendously day by day and the brokerage houses of Bangladesh have been facing mentionable hurdles with the increasing number of investors in the capital market. It is remarkable that the stock market of a country such as Bangladesh has got boost in BO (Beneficiary Owners) accounts. Hence, every day the brokerage houses of DSE and CSE have the opportunity to conduct smooth and huge trades. It is not only like that more the transaction more the commission for the broker, the brokerage houses have to follow all the rules and regulations established by the BSEC. These rules and regulations of BSEC can be detrimental for the brokerage houses sometimes. There is no doubt that the brokerage houses are playing an important role in the capital market of Bangladesh. As a result, we have to constantly monitors the performance of the brokerage firms. Also, we need to measure its own performance to satisfy the parties involved in the development.