Stella Equities Ltd

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FAQ

1. What types of capital market instruments are available in Bangladesh?

Bangladesh’s capital market primarily consists of:

  • Equities (shares of publicly listed companies)
  • Corporate bonds
  • Treasury bonds and bills
  • Mutual funds
  • ETFs (Exchange-Traded Funds) – limited but emerging

2. Who regulates the capital market in Bangladesh?

The market is regulated by:

  • Bangladesh Securities and Exchange Commission (BSEC)
  • Stock exchanges:
    • Dhaka Stock Exchange (DSE)
    • Chittagong Stock Exchange (CSE)

Central Depository Bangladesh Ltd. (CDBL) – manages electronic share settlement

3. How can I start investing in Bangladesh’s stock market?

You need to:

  1. Open a BO (Beneficiary Owner) account with a brokerage firm or custodian
  2. Provide KYC documents (NID/passport, photo, TIN, etc.)
  3. Fund the account through a linked bank
  4. Start trading via a licensed stockbroker

4. Can foreign investors invest in the Bangladesh capital market?

Yes. Foreign investors (both individuals and institutions) can invest in:

  • Equities
  • Government securities
  • Mutual funds

They must open:

  • A Foreign Currency Account (FCA)
  • A Non-resident Investor’s Taka Account (NITA) with an authorized dealer bank

5. Are there any investment restrictions for foreigners?

  • No restrictions on capital repatriation (profits, dividends, and capital can be repatriated, subject to Bangladesh Bank regulations)
  • No sector-wide ownership limits in most listed companies, except for certain regulated sectors (e.g., banking, telecom)

6. What taxes apply to capital market investments?

  • Capital Gains Tax: Varies depending on holding period and investor type (e.g., local vs. foreign)
  • Dividend Tax: Typically, 10–20% at source
  • Corporate Tax: If investing through institutions

7. What are the trading hours of the stock exchanges?

  • Sunday to Thursday
    • Pre-opening session: 9:15 AM – 9:30 AM
    • Continuous trading session: 9:30 AM – 2:30 PM
  • Friday & Saturday: Closed

8. What risks should I be aware of?

  • Market volatility due to political, regulatory, or liquidity factors
  • Corporate governance issues in some listed companies
  • Currency risk for foreign investors (Taka vs. USD)
  • Limited market depth and product diversification

9. Can I invest in IPOs?

Yes. IPOs are open to both retail and institutional investors. You must:

  • Apply through your BO account
  • Comply with allocation and payment terms defined by the prospectus and BSEC rules

10. How can I monitor and analyze my investments?

  • We will provide daily BO account balance with the broker.

Or you can:

  • Use trading platforms provided by your broker
  • Access DSE/CSE websites for real-time prices and disclosures
  • Use tools like Bloomberg or TradingView for advanced analysis (if available)
  • Consult research reports from licensed investment firms

11. What is a discretionary account?

A discretionary account allows a licensed portfolio manager to make investment decisions on your behalf, based on a mutually agreed-upon investment strategy and risk profile. You give the manager “discretion” over buy/sell decisions without needing prior approval for each trade.

12. Who manages my account?

Your account is managed by a licensed portfolio manager or advisory team. They are obligated to act in your best interest and make decisions aligned with your Investment Policy Statement (IPS).

13. What are the benefits of a discretionary account?

  • Professional Management: Day-to-day decisions made by experts.
  • Efficiency: Quicker execution of trades in volatile markets.
  • Customized Strategy: Tailored to your financial goals, time horizon, and risk tolerance.
  • Reduced Burden: Less need for ongoing involvement in individual investment decisions.

14. How is the investment strategy determined?

The strategy is based on your:

  • Risk tolerance
  • Return expectations
  • Liquidity needs
  • Investment timeline
  • Tax considerations

All of this is captured in your IPS, which guides how your portfolio is managed.

15. Will my portfolio be reviewed or rebalanced?

Yes. Portfolios are regularly monitored and rebalanced as needed to maintain alignment with your strategic asset allocation and to respond to market changes or life events.

16. What are the fees involved?

Fees are typically:

  • Asset-based (e.g., X% annually of assets under management)
  • May include custodial, trading, or performance-based fees

A transparent fee schedule is provided before account opening.

17. How can I track my account performance?

  • Monthly or quarterly statements
  • Online portal access
  • Annual performance reviews
    You’ll also receive tax documents and a detailed year-end summary.

18. Can I still access or withdraw my money?

Yes. While the manager has trading authority, you maintain full ownership and access to your funds. Withdrawals are subject to settlement and liquidity availability.

19. What regulatory protections do I have?

  • Your account is managed under strict regulatory standards (e.g., securities commissions, central banks)
  • Portfolio managers are fiduciaries, meaning they are legally bound to act in your best interest
  • Your investments are held in segregated custodial accounts, ensuring transparency and safety

20. Can I override or restrict certain investments?

Yes. You may set specific restrictions (e.g., ethical exclusions, sector limits) in your IPS. While managers have discretion, they operate within the boundaries you define.

21. Who should I contact for questions or updates?

You will be assigned a dedicated relationship manager or client advisor who can assist you with:

  • Portfolio updates
  • Performance discussions
  • Administrative or withdrawal requests