FE Report
Stock ended higher on Wednesday with increased trading activities, spurred by news that the deposit and lending rates of the banks would be slashed.
DSEX, the prime index of the Dhaka Stock Exchange (DSE), settled at 5,384, soaring nearly 40 points or 0.74 per cent over the previous session.
Market insiders said investors showed their buying appetite on stocks following the news that the private commercial banks will bring down their interest rates to single digit from July 1.
Bangladesh Association of Banks (BAB), an association of the bank owners, announced on Wednesday to slash the interest rates to boost investment in Bangladesh.
The banks will not take more than 9.0 per cent interest on loans while they will give maximum 6.0 per cent interest on three-month deposits.
"The move would help increase the fund flow to the capital market to some extent," Khairul Bashar Abu Taher Mohammed, chief executive officer (CEO) of MTB Capital, told the FE.
Mr. Bashar, also secretary general of the Bangladesh Merchant Bankers Association, said the June-closing stocks attracted the investors most, taking the stock indices higher.
"Some foreign investors are active in the market and took position on lucrative stocks," he said.
The broad index rose slightly during the first hour of the day, maintained a balanced movement in the middle of the session and then rose again steadily.
Two other indices of the DSE also ended higher. The DS30 index, comprising blue chips, gained more than 12 points to finish at 1,955 and the DSE Shariah index advanced nearly 10 points to close at 1,250.
According to International leasing Securities, the market saw a lively session amidst enthusiastic participation of investors riding on new hopes.
The stockbroker noted that notable price corrections over the last few weeks tempted the bargain hunters to inject fund into the market, pushing up the market turnover further.
Trading activities also rose and the total turnover amounted to Tk 6.76 billion, which was 6.45 per cent higher than the previous session's Tk 6.35 billion.
"After the budget and Eid festival, such buying spree indicates that investors' confidence to the market is restoring gradually," said EBL Securities.
However, concerns remained over depreciation of the taka against dollar and looming political uncertainties ahead of the national election, said the stockbroker.
The financial institutions witnessed the highest gain of 1.92 per cent, followed by engineering with 1.32 per cent, power 1.10 per cent, telecommunication 1.07 per cent, banking 0.55 per cent and pharmaceuticals 0.36 per cent.
Only food & allied sector saw 0.02 per cent correction.
Of the traded issues, 204 closed higher, 90 closed lower and 43 remained unchanged on the DSE trading floor.
Alif Industries was the most traded stocks on the DSE turnover chart for the third straight session with shares worth Tk 301 million changing hands, closely followed by Khulna Power Company, Western Marine Shipyard, Navana CNG and United Power.
Fu-Wang Food was the day's best performer, posting a gain of 10 per cent while the Popular Life Insurance was the worst loser, losing 8.41 per cent.
The port city's bourse CSE also ended higher with its CSE All Share Price Index - CASPI-advancing 118 points to settle at 16,602.
CSCX, the Selective Categories Index, also gained 74 points to finish at 10,042.
The gainers beat the losers as 159 issues closed higher, 58 ended lower and 17 issues remained unchanged on the CSE.
The port city's bourse traded 6.50 million shares and mutual fund units worth more than Tk 198 million in turnover.
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