Market efficiency in weak form: empirical evidence from Bangladesh Stock Market

Abstract

The report focus on the stock valuation which ultimate objective is to evaluate the stock to find out the undervalued or overvalued are traded in the Dhaka stock Exchange. Here, the return of daily trading price is used from 2013 to 2017 conducting 89 companies which are considered to know the intrinsic price in the market. Most common techniques to evaluate the stock is CAPM model. It is used to find out intrinsic value to compare with current market price which is executed to justify the CAPM model is valid or not. In the following study we use the historical date to find out intrinsic value after that we compare the intrinsic value with current market price. The study reflects that not a single company are traded in fare price that means each company are traded either undervalued or overvalued. I can say the companies which are traded in Dhaka stock exchange are inefficiency. Therefore, it can be concluded that the market are inefficient which are predictable. The arbitrage profit is possible.