Report on Dynamic Asset Allocation

A successful stock market in a developing economy can provides a major source of financial development both by channeling domestic savings and attracting foreign investment. However, this objective is not always met, particularly in a risky stock market due to underlying some problems of the capital market. A study of dynamic asset allocation gives valuable information about share price such as when a security is in a risky position,when a security is in a booming position, when to buy risk free asset ,when to sell risky asset .It is the way of equity risk management.It insures the portfolio. Without sound and efficient dynamic asset allocation strategy, rapid economic development could be hampered as capital market provides long term funds to entrepreneurs. Further, the capital market Bangladesh is still underdeveloped, in spite of recent initiatives.

This report deals with the dynamic asset allocation of 10 companies for the year 2013.For the purpose of dynamic asset allocation strategy,the necessary data have been collected from the web site of particular companies and from the website of Dhaka stock Exchange.

As a partial requirement of MBA program, we are required to study the “Portfolio Management”course. In the classroom we get the opportunity to know the theoretical part of the subject. But without practical orientation it is somewhat difficult to grasp the core concept. Information system is entirely based on practical situation. So in order to enhance the understanding of the core concept, we are required to prepare a report on practical situation to understand how to implement and practice the theoretical part in real life situation.

The primary objective of this report is to show the dynamic asset allocation strategy and the way to achieve exposure to various investment opportunities.

Specific Objectives:
  • · Examining the performance of a particular company.
  • · Presenting the real scenario of stock prices.
  • · To familiarize with the strategy.

Methodology is the process of system through which a study is being carried out for the purpose of collection of information which is required in connection with the study for reaching a conclusion on the study.

Since the data required from the Dhaka Stock Exchange for2013 is not published in DSE website and is not available in any other easily accessible way, the study limited to use data which are already available in soft copy, compiled and printed. The data for all stocks listed on DSE have been collected from four sources. One is DSE website. The second is the publications of central library of the Dhaka Stock Exchange such as Various Issues of Monthly Review, fortnightly capital market, and Annual Report of the Dhaka Stock Exchange during the study period. The third is the website of Securities Exchange Commission of Bangladesh.