Stocks rebound strongly amid renewed optimism


FE ONLINE REPORT | Published: August 19, 2020 16:05:51 | Updated: August 21, 2020 10:20:46


Stocks rebound strongly amid renewed optimism

Stocks rebounded strongly on Wednesday, after a two-day losing streak, as investors went on a buying spree on large-cap issues riding on a number of regulatory bold steps to restore discipline in the market.

The market opened on a flying note and the key index soared more than 124 points within the first hour of trading. But late hours profit-taking sell-offs eroded some early gains.

At the end of the session, DSEX, the prime index of the Dhaka Stock Exchange (DSE), settled at 4,790, gaining 70.57 points or 1.49 per cent, after losing 139 points in the past two sessions.

Market operators said a number of bold steps of the stock market regulator to restore discipline in the market, expansionary monetary policy and some positive macro indicators encouraged investors to take positions on large-cap stocks again.

Lower returns on the money market, lucrative price level of listed securities, strong regulatory actions against wrongdoers boosted the investors’ confidence in the market, said a merchant banker.

The high net worth investors are injecting fresh funds into the market in the past few sessions targeting capital gains as returns from the money market have declined significantly, he added.

The securities regulator’s latest hard stance on ensuring mandatory 2.0 per cent shareholding by each director and jointly 30 per cent shareholding had also a positive impact on the stock prices, said a leading broker.

Two other indices also ended higher. The DS30 index, comprising blue chips, rose 35.48 points to finish at 1,644 and the DSE Shariah Index advanced 13.47 points to close at 1,094.

Turnover, the crucial indicator of the market, crossed Tk 11 billion- mark once again and amounted to Tk 11.49 billion on the country’s premier bourse, which was 9.22 per cent higher than the previous day’s mark of Tk 10.52 billion.

The market turnover has been staying above Tk 10 billion-mark in the past eight consecutive sessions as the optimistic investors remained active on the market riding on new hopes, said a leading broker.

Liquidity support fund by the Bangladesh Bank and the decline in bank deposit rates--- maximum up to 6.0 per cent for time deposit, paving the way for new investment in the market, taking the market turnover above Tk 11 billion-mark once again, he said.

Losers, however, outnumbered the gainers, as out of 357 issues traded, 166 closed lower and 149 ended higher while 42 issues remained unchanged on the DSE floor.

A total number of 202,793 trades were executed in the day’s trading session with a trading volume of 419.92 million shares and mutual fund units.

The market-cap on the premier bourse also rose to Tk 3,592 billion on Wednesday, from Tk 3,557 billion in the previous session.

Beximco Pharma topped the turnover chart with shares worth Tk 937 million changing hands, closely followed by Orion Pharma, Beximco, IFIC Bank and Brac Bank.

Beximco was the day’s best performer, posting a gain of 10 per cent while Nahee Aluminum was the worst loser, losing 5.26 per cent.

The Chittagong Stock Exchange also rebounded strongly with its All Shares Price Index (CASPI)—soaring 235 points to close at 13,727 and the Selective Categories Index - CSCX –jumping 143 points to finish at 8,284.

Of the issues traded, 126 gained, 132 declined and 24 remained unchanged on the CSE.

The port city bourse traded 16.04 million shares and mutual fund units with turnover value of Tk 354 million.

babulfexpress@gmail.com

Share if you like