Eastern University Digital Library

Md. Ashaduzzaman

Study of satisfaction in mobile operators of Grameen Phone network

Mahmuda Binte Mostofa Ruma, Nadia Islam

Fractals

2nd Convocation Souvenir 2011

Iffat A. N Majid

A study of the writing behaviors of low proficiency English learners in Bangladesh

John W. Leis

Digital signal processing using MATLAB for students and researchers

Impact study of environmental factors on sales productivity in IDS Bangladesh

Monsura Zaman, Tahmina Ferdous, Md. Moniruzzaman Khan

Evaluations of the actions for achieving millennium development goals

EU Newsletter, 2011, Fall

Mohamad Wasim Akram

Volume-3, Issue-1, January 2011, ISSN No.1998 - 7889 Eastern University Journal
Meursault’s Indifferent Stance: A Conscious Acceptance
of Capitalism
Mohamad Wasim Akram*
Abstract:
This paper aims at determining how Meursault’s conscious acceptance of capitalism in
The Outsider turns out to be “inevitability” in a society automated by pre-set rules and
conventions. This inevitability springs directly from his perennial concern for upholding
his identity as a free human being through “assertion of one’s own individual choice”.
Through an intricate discussion of the text, the paper will trace that most of Meursault’s
decisions taken in the course of the novel are often stimulated by external factors. The
major objective, however, is to prove that whereas most of the characters are simply
performing roles even without understanding them, Meursault’s case is a deliberate one
as a silent protest against the unconscious and essential acceptance of Capitalism.
Unlike others, Meursault stands apart with his own conscience and the philosophy of
indifference always motivates him not to be one of those who follow the ‘conventions’
without question. Hence, the absurdities that make him a stranger to his fellow people
transform him into a human being, a man with freedom of choice who acts only if he
really understands.
Key words:Meursault’s, Capitalism, Unconscious, motivation, freedom of choice
Albert Camus’ The Outsider gives us an impression of a hard-core capitalist society
where everybody is unconsciously reduced to sub-humans with all the values inverted.
Conforming to the conventions prescribed by the “law of the jungle’ capitalism,
individuals often tend to align themselves to the dominant definition of human being
with no individuality at all. As they act like machines, their reactions to the different
incidents of life often seem to be mechanical devoid of any emotion. Even if there is
emotion, it is more than predictable and robotic. However, it is well known that “in the
age of capitalism, the struggle is one between the bourgeoise, which owns the means of
production, and the proletariat, which has nothing but the labour-power, forced to sell in
order to survive. By creating the modern capitalist system, or capitalist mode of
production, and the proletariat exploited by that system, the bourgeoise has created the
means of its own destruction. At the same time, it has reduced the whole of human
existence to naked self-interest and the cash nexus that destroys human
relations”(Macey, 200:242). Moreover, these sterile, shattered individuals cannot bring
any hope to their desolate lives, rather become frustrated and think about dreadful death
only. Considering death as their ultimate destination, they try to escape from the burden
of asserting themselves as individuals with ‘freedom’ as well as the social
* Senior Lecturer, Dept. of English, Eastern University
Mohamad Wasim Akram
97
responsibilities and negate everything. At one moment in the process of this
dehumanization, extreme nihilism replaces all hopes and potentialities and the self is
alienated from its own human existence. Although Meursault emerges from this
degenerated mass, he asserts his difference from them through his overt and conscious
understanding of the invisible and often internalized mechanisms of capitalism. And
with this understanding he redefines himself as a human being amongst those who are
nothing but some products of capitalism working to sustain it, and again it is this
realization that determines most of his behaviours that apparently seem abnormal or
absurd.
In the capitalist society, all the institutions as well as modes of life are governed by
factors that are beyond question and a person is always expected to shape himself
according to the codes prescribed by those institutions to be defined as ‘normal’ human
beings. In such a society, it is tough for a person with a bit critical and questioning mind
to survive and we observe an unbearable indifference in Meursault who, unlike others,
does not react to life the way others do. For this, Meursault is widely known as an
existentialist hero who demonstrates the basic idea of existentialism propounded by Jean
Paul Sarte – “existence precedes essence” which means a man can pass his life
according to his own wishes and create his own values. But Meursault’s ill-fated student
life, poorly paid private job, busy office schedule (which are common phenomena in a
capitalist society) play a vital role to make him an apathetic individual. Being neglected
by a capitalistic society, he keeps himself indifferent towards its long-respected
traditions and institutions like family, marriage, church (religion), state, and court.
At the outset of the novel Meursault shows his utter indifference towards the news of his
mother’s death despite the fact that she was the last person with whom he had a humane
relationship. His mother’s death does not bring any shock to him; even he does not feel
the urge to know the actual date of her death. He works in a business farm as a poor
worker and had to send his mother to an old home when he couldn’t bear her expenses.
Moreover, she might not have got the minimum attention and care she needed from
Meursault - her only son because of the latter’s tight office schedule. So, “she’d got
bored of being alone”1. This shows how pathetically a man becomes isolated in
bourgeois society where relationships are affected by factors like money and self-
interest. In this dehumanized society even a son becomes a stranger to his mother.
Because of this long period of isolation men do not feel for each other. So, it is not
surprising when Meursault says:
“Mother died today. Or may be yesterday, I don’t know. I had a telegram from
the home: ‘Mother passed away. Funeral tomorrow. Yours sincerely.’ That
doesn’t mean anything. It may have been yesterday2.
However, in this automated society people’s reaction to incidents of life are expected to
fall in the so called normal patterns the reversal of which results in ultimate recognition
1 Camus, Albert. The Outsider. Trans. Joseph Laredo. London: Penguin Books. 1983. P-48
2 Ibid. P-9
Meursault’s Indifferent Stance: A Conscious Acceptance of Capitalism
98
of the person as ‘abnormal’. The way Meursault joins his mother’s funeral gives us the
impression that he is going to carry out merely a formal duty, not to show his last respect
to her. He knows very well that “after the funeral though, the death will be a classified
fact and the whole thing will have assumed a more official aura”3. Since it is just an
official obligation to announce his mother’s death, he takes part in every formality of her
funeral as passively as he executes his daily routine. So, during the night of the vigil we
do not see him mourning for a single moment, rather he keeps himself busy observing
the nurse, nature, the caretaker and different unimportant objects as he does on other
ordinary days of his daily life.
In addition to this, the sheer indifference in Meursault’s boss regarding his mother’s
death makes it easy for us to visualize the employer-employee relationship in the
capitalist society. Under the circumstances of Meursalt’s mother’s death he has to grant
extra two days’ leave for him, which invites an unwanted situation in a working place.
He becomes so worried regarding the extra two days leave that he can not even offer any
condolence to Meursault suppressing his disappointment for a while. His strong desire to
bring every thing under the strict schedule of his office gives us the impression that after
performing office hours accurately if someone gets time to attend mother’s funeral then
he will attend, otherwise not.
In a life where work does not have any connection with the dreams of the worker,
boredom, angst and indifference are the immediate and ultimate conditions encountered
by the workers time and time again. Day after day passively doing the pitiable clerical
job, Meursault becomes utterly indifferent like Melville’s “Bartleby the Scrivener” and
does not want to bring any change in his present dreary life. It is well known that
“persistent long-term inequality of wealth undermines the motivation of the poor to
improve their stance” (Wikipedia, 2009). Even when his boss wants to send him to his
company’s Paris office with a better opportunity, he immediately refuses the offer
saying that one life is as good as another. Seeing Meursault’s rigid stand, his boss
becomes upset and warns him that his stance is ruinous in the business world. But as
soon as he comes back to his work and becomes nostalgic for a while, we get the reason
for his indifferent stance. He clearly utters that he was ambitious when he was a student
but he had to give up his studies and soon he “realized that none of it really mattered”4.
Here, the alienation of the producer/worker from his production/work is quite evident,
and this alienation is the cause of self-negation in all capitalist societies:
I replied that you could never change your life, that in any case one life was as
good as another and that I wasn’t at all dissatisfied with mine here. He looked
upset and told me that I always evaded the question and that I had no ambition,
which was disastrous in the business world5.
3 Camus, Albert. The Outsider. Trans. Joseph Laredo. London: Penguin Books. 1983. P-9
4 Ibid. P-44
5 Ibid. P-44
Mohamad Wasim Akram
99
Meursault, does not forget for a single moment that he is an unaided victim like
Sisyphus who can only prove his existence by accepting the punishment courageously.
He did not have any motive behind killing the Arab and he did it only on the spur of the
moment when he could not bear the dazzling sun which was “raining down sheets of
flame”6. But the court establishes a false connection between his killing and his
indifferent attitude to his mother’s funeral. So, they follow the stereotypical regular
procedure in which they have to find out a reason of the killing whether it is true or not.
In the name of justice they just work like machines following the set rules. As crying
during the mother’s funeral becomes the rule of that society, which means one has to
express his emotion following the social pattern, Meursault is bound to do the same.
When he fails to do that, immediately he is declared a criminal. To Camus, as he says in
his ‘Afterword’ of the novel, “In our society any man who doesn’t cry at his mother’s
funeral is liable to be condemned to death” (Camus, 1983:118). Actually he satirizes the
stereotypical bourgeois society through uttering this extremely paradoxical sentence.
Being a part of this mechanical society, Meursault cannot deny its ridiculous justice,
rather he consciously accepts it as he does the same attending office regularly, wearing
black tie and armband in the funeral and so on. Through this conscious acceptance, he
proves himself different from other people of that society. He leads the same
monotonous life but he knows very well that he is bound to do this, whereas others
become used to it.
Within the course of the novel, our hero Meursault confronts different peculiar and
pathetic individuals and introduces them to the readers. Meursault’s description of a
peculiar little woman at Céleste gives us a glimpse of a robotic life of an alien
individual. When he starts eating, this ‘peculiar’ lady suddenly appears and sits at his
table. From that moment onward, Meursault observes her very closely. Being seated, she
takes the menu and studies it ‘feverishly’ and calls Céleste and orders her whole meal at
once, ‘speaking precisely but rapidly.’ It becomes very obvious that she does not at all
want to waste even a moment of her valuable time since she knows that “the worker
belongs neither to an owner nor to the land, but eight, ten, twelve, fifteen hours of his
daily life belong to him”(C. Tucker 1978:205). So, she has to save every single second
of her life to sell. As long as she waits for her hors d’oeuvre, she doesn’t spend a single
word with Meursault, and keeps herself busy with adding up the bill in advance utilizing
her precious time. On the other hand, through this mechanical calculation she becomes
successful to avoid any interaction with a human being. Not only that, she gives us the
idea that she has become so used to a busy working life that she cannot pass a single
second without work. At that point the hors d’oeuvre arrives and she gulps it down as
fast as she can. After this session when she has to wait for the main part of her meal to
be served, another possibility of holding a conversation between them arises, but this
time also she maintains her distance steadily. To avoid any talk with a man or to prevent
the waste of her time, she starts ticking all the radio programmes for the week published
in the magazine which she kept in her bag. It also suggests that she may spend her spare
6 Ibid. P-60
Meursault’s Indifferent Stance: A Conscious Acceptance of Capitalism
100
time of the whole week listening to radio only, not interacting with friends or family.
Not only that, it gives us the impression that she would listen to only those programmes
which would not interrupt her working hours. So, she might not listen to the radio for
any recreation but to keep herself busy with something which would give her a feel that
she is not wasting her time without doing anything. Finally when she leaves the place
without wasting fraction of a second and saying anything to anybody, even our absurd
hero, Meursault is bound to call her robot:
“Then she stood up, put her jacket back on the same precise, robot-like
movements and left”7.
Meursault’s neighbour Old Salamano’s ‘dreadful’ old age leaves us utterly horrified at
the thought of the miserable destiny that is in store for every individual in a capitalist
society. If we look at his past life, we see that he had to work on the railways where
strict schedule was supposed to get priority over everything. As a result, he became very
used to this routine life and could not come out of it in his later retired life. It becomes
very clear when we see, for long eight years, he has been taking his dog for a walk
following the same schedule and even he has not changed his route for once. This dog
has become an inseparable part of his life though he calls it a “filthy, lousy animal”8.
Now, to Salamano life means only killing time with a filthy dog. So, at last when he
loses his dog, he feels very deserted and asks Meursault what he would do. Actually he
wants to say he does not know anything more than this tedious life. So, the labour power
he sold to capitalist system now ensures him the necessary “means of subsistence” and a
routine life only.
Old Salamano’s maltreatment with his dog makes him a cruel master who dominates his
subordinate very pitilessly. In his old life the spaniel becomes the only companion with
whom he can at least pass his dull life. So it appears that in his utter loneliness he would
treat his sole companion in a better way and care for its comfort. But his treatment of
this dog suggests that he has internalized the ideals of capitalism which has taught him
to be a cruel master. So he suppresses the dog with the same cruelty that he may have
faced in his working life. He beats the dog everyday and thinks as a master it is his duty
to suppress his subordinate. Thus, he does not feel at all sad for his cruelty. We find a
beautiful description of his absurd routine:
“When the dog wants to urinate, the old man won’t give it time and drags it on,
so that the spaniel scatters a trail of little drops behind it. But if the dog ever
does it in the room, then it gets beaten again. It’s been going on like that for
eight years”9.
Old Salamano’s wretchedness after losing his dog indicates very clearly that he has
turned into a perfect alien. In his young age he wanted to work in the theatre but for
7 Camus, Albert. The Outsider. Trans. Joseph Laredo. London: Penguin Books. 1983. P-46
8 Ibid. P-31
9 Ibid. P-31
Mohamad Wasim Akram
101
money he had to end up working on the railways. And now he does not ‘regret it’ and
vainly tries to console himself that his job has at least ensured him ‘a small pension’ for
the rest of his life. But though he is not regretting, we see how poorly he passes his life.
He has been living with a dog for eight years. “After living with it for so long, the two of
them alone together in one tiny room, Salamano has ended up looking like the dog”10.
Now both of them have the same skin disease called ‘manage’. So, “they look as if they
belong to the same species”11. In his early life, he sacrificed his own pleasure for earning
money but that money could not give him any peace in his old age, rather he has become
more alien to his own life. At the end he gets an abandoned, monotonous, boring,
charmless life where a ‘filthy, lousy animal’ becomes his only reason of living. In
Economic and Philosophic Manuscripts of 1844, Marx talks about such poor individuals
in the following manner:
“---the worker is related to the product of his labour as to an alien object. For
this premise it is clear that the more the worker spends himself, the more
powerful the alien objective world becomes which he creates over-against
himself, the poorer he himself – his inner world – becomes, the less belongs to
him as his own”.(C. Tucker 1978:72)
As has been shown, Meursault cuts himself off psychologically from the people around
him, and this is a step which he takes deliberately knowing that this is going to be the
final stage of capitalism—a stage where everything will be conditioned by money or
naked self-interest. While people around him act like passive followers of the invisible
force called capitalism, Meursault is acting according to the directions of his conscience
and it is this conscience that makes him look ‘abnormal’ in an absurd society. Meursault
consciously alienates him from everything but his own self. So, he chooses to live with
freedom of choice as a human being, essentially different from others who have become
only pseudo-human.
Work Cited
Bree, Germaine, ed. Camus: A collection of Critical Essays. Twentieth Century Views Series.
New Jersey: Prentice-Hall, Inc. 1962.
Camus, Albert. The Myth of Sisyphus. Trans. Justin O’Brien. London: Penguin Books. 2000
Leitch, B. Vincent. The Norton Anthology of Theory and Criticism. New York: W.W. Norton &
Company, Inc. 2001
Macey, David. The Penguin Dictionary of Critical Theory. London: Penguin Books. 2000
Stumpf, Samuel Enoch. Socrates to Sartre: A History of Philosophy. McGraw-Hill Education.
1982
Tucker, C. Robert. 2nd ed. The Marx-Engels reader. New York: W.W. Norton & Company, Inc.
1978
10 Ibid. P-30
11 Ibid. P-31


Meursault’s indifferent stance: a conscious acceptance of capitalism

Rajib Lochan Das

Volume-3, Issue-2, July 2011, ISSN No.1998 - 7889 Eastern University Journal
Variability Analysis of Weekly Trading of
Dhaka Stock Exchange
Rajib Lochan Das*
Abstract
Day-of-the-week effect is a popular focus of study in finance and economics. Several
studies on Dhaka Stock Exchange (DSE) recognize presence of this effect under six-
days-a-week trading. This paper investigated the presence and nature of trends under
five-days-a-week trading at DSE regarding its three practised indices. The study uses
Markov chain model and found that the probability of getting lower returns is highest on
Mondays, and that of getting higher returns is highest on Thursdays.
Key Words: Variability, seasonality, day-of-the-week effect, probability, Markov
Chain.
1. Introduction
Trend analysis of stock market indices in any country is an important area of research.
Directed changes in indices are studied and analysed in many different ways. Such study
within a certain time frame can be considered as a seasonal study, and the effect within a
seasonal time frame is the seasonal effect. In a broader sense it is a focused point of
calendar effect. Fiscal years are of one year. Business firms are supposed to prepare
statements and declare dividends at the end of the year; sometimes, twice in a year after
every two quarters. Year-ending time of companies does not necessarily match with the
fiscal year of the country. So, eventually the calendar effect is a very common
phenomenon in every stock markets. One year cycle can be narrowed down to seasonal
effect, which can further be pointed to the time frame of a week. Day-of-the-week effect
is one of the popular focuses of study in finance and economics. It was started back in
late 1920’s. In 1930 Kelly found existence of Monday effect in US markets. A number
of researchers have drawn conclusions on different stock markets in many countries.
After that, many researchers have studied various capital markets in USA and other
countries. One influential research was done by Gibbons and Hess (1981) who found
that the returns are higher in Wednesdays and Fridays, and lowest in Mondays in US
markets. Keim and Stambaugh (1984) observed consistently lowest returns on Mondays
irrespective to the size and diversity of portfolio. On the other hand Fridays are likely to
bring higher returns. According to these arguments, so called Monday Effect occurs due
to the first day of trading in the week. Jaffe and Westerfield (1985) found that the lowest
return occurs on Tuesdays in the markets of Australia and Japan. Studying on Malaysia
*Senior Lecturer, Eastern University, Bangladesh
Rajib Lochan Das
39
and Thailand stock exchanges Brooks and Persand (2001) showed that there were
substantial evidence of positive Monday effect even after controlling risk factor. Islam
and Hasan (2002) found presence of monthly effect in returns at the Dhaka Stock
Exchange. They concluded that the DSE is likely to ensure higher returns in January,
June, September and October compared to other months of the year. Syed A Basher and
Perry Sadorsky (2006) of York University, Canada investigated for this effect in 21
emerging stock markets around the world. They found that the effect is present in
Philippines, Pakistan and Taiwan markets. They have studied all these markets taking
respective market risks into consideration. Meanwhile the monthly reviews of DSE
shows that there is a strong positive correlation between DSE indices and those in
Karachi Stock Exchange, Pakistan or NIKKEI index, Japan. Ankur Singhal and Vikram
Bahure (2009) of IIT, Kharagpur studied the Indian stock markets and came to a
conclusion that there is presence of weekend effect in stock returns. Lutfor Rahman,
Nurun Nahar and Farid Ahmed Molla (2010) recently studied DSE under the six-day
trading system and recognized the presence of day-of-the-week effect. They came up
with the conclusion that the significant negative mean returns (-0.10%) come on
Mondays and positive mean returns (0.12%) come on Thursdays. Trading under DSE is
presently practised five-day-a-week. Thursday, September 08, 2005 was the last day of
six-day trading in Bangladeshi stock markets. From the following week, securities were
traded under five-day trading system, i.e. from Sunday through Thursday. In this paper
the author aims to study the nature of trends of indices under five-day trading at DSE.
2. Research objective
Objective of this research is to find any significant presence of day-of-the-week effect in
day-to-day returns in the DSE under the five-day trading. In case of the effect remains
from previously practised six-day trading, the findings will also show its nature whether
it changes from previous effect under six-day trading. Number of days to maturity of
securities at DSE for being traded to next hand is three, which might have influence in
investors’ mind. This study is also aimed to know about the new day of lowest return
and that of highest return in a week.
Hypotheses are:
- Presence of day-of-the-week remains in the five-day trading.
- There will be new days of lowest and highest returns compared to other days in a
week.
3. Stock exchanges in Bangladesh
There are two stock markets in Bangladesh: Chittagong Stock Exchange (CSE) and
Dhaka Stock Exchange (DSE). In terms of number of securities, their traded volumes,
and market capitalizations the CSE is very small compared to those in the DSE. This
paper sticks its study on the DSE only. Both of the stock exchanges in Bangladesh are
Variability Analysis of Weekly Trading of Dhaka Stock Exchange
40
under the legal supervision of Securities and Exchange Commission (SEC) of
Bangladesh, which is a constitutional autonomous regulatory body.
DSE is physically located in Dhaka, the capital city of Bangladesh. It is a public limited
company regulated by SEC Act 1993 and Companies Act 1994. Number of securities
and market capitalization at DSE are as follows:
DSE summary in year >> 2006 2007 2008 2009
No. of securities 310 350 412 443
Market capitalization (mn BDT) 323367.94 742195.87 1059530 1312773
3.1 Indices of DSE
With the guidelines of IOSEC the most recently modified index at DSE is the DSI or
DSE All share index. It was reintroduced in March 2005. Other two indices are DSE 20
and DSE GEN. DSE 20 index is calculated only on twenty selectively healthy
companies from various sectors. DSE GEN i.e. the DSE General index is comprised of
securities including the securities of A, B, G and N categories. DSE 20 was introduced
in January 2001 while the DSE GEN was introduced in November 2001. The indices
recorded at the end of trading on 30 June, 2010 were 5111.63, 3650.04, and 6153.68 of
DSI, DSE 20 and DSE GEN respectively.
4. Methodology
This paper is focused on the direction of changes of indices from a day to the next. The
absolute value of the index or the absolute change in index is not considered as the
significant factor. Methodology of this study is based on the changing direction, positive
sign or negative sign, of indices on the basis of day-to-day trading. The changing sign is
calculated as:
Cs = Id – Id-1, where Id is the index after the trading on the day d. Here, the domain for dis {Sunday, Monday, Tuesday, Wednesday, Thursday}. All the Cs’s are counted
separately as positive and negative according to the changes from Sunday to Monday,
Monday to Tuesday, and so on to Thursday to Sunday. All these observations are then
considered as a basis of probability tree to make comments on the trend of the indices at
DSE.
Finally, the Markov Chain model is also applied to investigate the nature of chain of
changes on day-to-day returns. Bivariate probabilities are calculated for each pair of
days of tradings from Sunday through the week.
4.1 Sample data and design
Data of three indices DSI, DSE 20, and DSE GEN at the Dhaka Stock Exchange are
collected for this study. Daily indices from September 08, 2005 to June 30, 2010 are the
Rajib Lochan Das
41
base of data. This study is aimed to investigate the return behavior under the five-day
trading. The September 08, 2005 was taken as the first day of index as this was the first
day of five-day trading in DSE. Number of trading days in this period was 1139. There
was 2 ‘no change’ indications in DSI and in DSE GEN, and 3 ‘no change’ indications in
DSE 20. ‘No change’ indication means the index on a particular day remains exactly
same as on the immediately previous day. In this case, Cs = 0, neutral in sign, regarding
up to the two decimal places. So, finally 1137 data of DSI and of DSE GEN were taken
into consideration in this study. While, 1136 data of DSE 20 index were considered.
4.2 Research pathway Cs binary value counts are the basis of further calculations.
DSE All share index:
2005 2006 2007 2008 2009 2010
+ ve - ve + ve - ve + ve - ve + ve - ve + ve - ve + ve - ve
Thu->Sun 4 9 18 28 27 19 22 25 28 21 14 11
Sun->Mon 7 8 16 29 26 22 15 32 23 25 12 14
Mon->Tue 11 3 25 20 29 18 28 21 28 21 16 10
Tue->Wed 7 7 25 21 28 20 28 21 22 26 17 7
Wed->Thu 9 3 24 22 30 18 30 15 30 18 16 8
DSE General Index:
2005 2006 2007 2008 2009 2010
+ ve - ve + ve - ve + ve - ve + ve - ve + ve - ve + ve - ve
Thu->Sun 4 9 17 29 27 19 23 24 28 21 14 11
Sun->Mon 7 8 14 31 28 20 14 33 24 24 11 15
Mon->Tue 10 4 24 21 27 20 27 22 28 21 15 11
Tue->Wed 6 8 24 22 28 20 27 22 23 25 16 8
Wed->Thu 9 3 26 20 31 17 30 15 29 19 16 8
DSE 20 Index:
2005 2006 2007 2008 2009 2010
+ ve - ve + ve - ve + ve - ve + ve - ve + ve - ve + ve - ve
Thu->Sun 3 10 17 29 25 21 23 24 24 25 16 9
Sun->Mon 5 10 14 31 25 23 15 32 19 29 10 16
Mon->Tue 10 4 24 21 28 19 24 25 26 23 19 7
Tue->Wed 5 9 25 21 23 25 26 23 24 24 19 5
Wed->Thu 6 6 27 19 30 18 28 17 27 20 17 7
Variability Analysis of Weekly Trading of Dhaka Stock Exchange
42
5. Analysis and findings
Total number of positive changes and that of negative changes are counted. For each
pair of days, such as Thursday-to-Sunday, Sunday-to-Monday and so on, totals of binary
Cs values are summed up. It is observed that there is significant difference in the changes
of DSI and DSE GEN indices. DSE GEN differs from DSI by the Z categories of
securities. This category is of the unhealthy companies in terms their quality of
governance, regular AGM’s, and declared dividends. Observations of totals of changes
in five pairs of days in weeks are given below.
All Share Index (2005-2010)
0
50
100
150
Thu->Sun Sun->Mon Mon->Tue Tue->Wed Wed->Thu
+ ve
- ve
DSE General Index (2005-2010)
0
50
100
150
Thu->Sun Sun->Mon Mon->Tue Tue->Wed Wed->Thu
+ ve
- ve
DSE 20 Share Index (2005-2010)
0
50
100
150
Thu->Sun Sun->Mon Mon->Tue Tue->Wed Wed->Thu
+ ve
- ve
For all three indices, the highest negative counts are on Sunday-to-Monday, and highest
positive counts are on Wednesday-to-Thursday pairs. There is significant difference in
changing patterns between DSE 20 and any of other two indices. Total number of
positive and negative changes are same in Thursday-to-Sunday for both DSI and DSE
GEN. But for DSE 20 it is differed by 10 more occurrences in negative trends.
5.1 Markov Chain model
With the independent bivariate trends between two consecutive days of week Markov
chain model is applied. In this section two chains are prepared for DSI and DSE 20,
Total (DSI)
+ ve - ve
Thu->Sun 113 113
Sun->Mon 99 130
Mon->Tue 137 93
Tue->Wed 127 102
Wed->Thu 139 84
Total (DSE GEN)
+ ve - ve
Thu->Sun 113 113
Sun->Mon 98 131
Mon->Tue 131 99
Tue->Wed 124 105
Wed->Thu 141 82
Total (DSE 20)
+ ve - ve
Thu->Sun 108 118
Sun->Mon 88 141
Mon->Tue 131 99
Tue->Wed 122 107
Wed->Thu 135 87
Rajib Lochan Das
43
because DSI and DSE GEN trends exhibit nearly identical chains. Two chains exhibit
the binary probability allocations for each pair of two consecutive days in the week. In
the table, probability of positive changes for Sun-to-Mon is shown as left-to-up
direction. Likewise, probability of negative changes for the same Sun-to-Mon is shown
as up-to-left direction. Binary values of probabilities are calculated from the occurances
of positive or negative changes on indices in the respective pair of days in the week. In
the chains, outer directions are used for the positive movements, and inner ones are for
negatives. Negative movements are in parentheses in the table
Markov’s chain for DSI:
Markov’s chain for DSE 20:
Sun Mon Tue Wed Thu
Sun 0.384279 (0.522124)
Mon (0.615721) 0.569565
Tue (0.430435) 0.532751
Wed (0.467249) 0.608108
Thu 0.477876 (0.391892)
Regarding the chain of DSI, binary probability allocations exhibit that there is equal
number of occurances of positive and negative changes from Thursday to Sunday. This
shows that return at the first day of the next week is likely to be same to that of the last
trading day of the previous week. This result is different in DSE 20, which shows that
there is likely to get lower returns at the first day of the week than that at the last day of
the previous week in particular.
6. Measuring variability
Markov chains of two indices DSI and DSE20 show significant variability on Mondays
and Thursdays. Following tables depict measurement of variabilities regarding p as
positive change and n as negative changes. From Monday to Thursday all possible trends
are calculated accordingly.
Sun Mon Tue Wed Thu
Sun 0.432314 (0.500000)
Mon (0.567686) 0.595652
Tue (0.404348) 0.554585
Wed (0.445415) 0.623318
Thu 0.500000 (0.376682)
Sun
Thu
Wed Tue
Mon
0.623318
0.500000
0.5000000.567686
0.432314
0.404348
0.595652
0.445415
0.554585
0.376682
Sun
Thu
We
d
Tue
Mo
n
0.608108
0.522124
0.4778760.615721
0.384279
0.430435
0.569565
0.467249
0.532751
0.391892
Variability Analysis of Weekly Trading of Dhaka Stock Exchange
44
Through the
path from
Monday to
Thursday,
probability of
having at leas
t two positive
chnages is
63.55% for
DSI, and is
60.47% for
DSE20.
7. Conclusion
This paper has studied the daily returns in the Dhaka Stock Exchange from September
08, 2005 to June 30, 2010. The findings show that there is significant presence of day-
of-the-week effect regarding all indices practised at DSE. Though the change trends are
identical with DSE All share index and DSE General index. The lowest returns are
found on Mondays, that is, the highest probability (56.7686% regarding DSI, and
61.5721% regarding DSE 20) of experiencing the negative changes at Sunday-to-
Monday pair of days. On the other hand, the highest returns are found on Thursdays, that
is, the highest probability (62.3318% regarding DSI, and 60.8108% regarding DSE 20)
of experiencing the positive change at Wednesday-to-Thursday pair of days. Three work
days are required to get matured of any security at DSE to its next transaction. So, it is
found that a portfolio can make substantial profits if the securities are bought on
Mondays before 12:00 pm and sold on Thursdays after 12:00 pm.
Monday to Thursday (DSI)
ppp 0.205906659
ppn 0.124433005
pnp 0.165373954
pnn 0.099938381
npp 0.139776154
npn 0.084469181
nnp 0.112261233
nnn 0.067841432
Total = 1.000000000
At least two p 0.635489773
Monday to Thursday (DSE20)
ppp 0.184522191
ppn 0.118914301
pnp 0.161835036
pnn 0.10429369
npp 0.139448068
npn 0.089866533
nnp 0.122302814
nnn 0.078817369
Total = 1.000000000
At least two p 0.604719595
Rajib Lochan Das
45
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