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Dhaka stocks set record, spurred by monetary policy

FE REPORT | August 03, 2021 00:00:00


Dhaka Stock Exchange (DSE) benchmark index continued breaking previous records as investors got upbeat spurred by the announcement of another expansionary monetary policy for this fiscal year.

DSEX, the core index of the premier bourse, went up 56.31 points or 0.87 per cent to settle at 6,481 Monday, the highest since its inception more than eight years back in 2013.

The DSEX gauge for the bourse health was introduced on January 27, 2013, designed by Standard and Poor's (S&P) based on free-float method, replacing the then key index - DGEN. However, the all-time-high DGEN was 8,918 recorded on December 5, 2010, when the market saw a bull run before a crash.

The blue-chip index DS30, a group of 30 prominent companies, also soared 16.22 points to settle at 2,344-- the highest since its inception on January 27, 2013.

The market capitalisation of the DSE also hit a new high at Tk 5,378 billion on the day, surpassing the previous peak at Tk 5,352 billion recorded just two weeks back.

Turnover, a crucial indicator of the market, climbed to a two- month high at Tk 21.88 billion on the country's premier bourse, in a further buck by 44 per cent over previous day's mark of Tk 15.21 billion.

Market experts say stocks continued their record-breaking rally with investors putting fresh bets on large-cap stocks, anticipating positive momentum in coming days after the Bangladesh Bank unveiled another expansionary monetary policy.

As the DSEX climbed a record high almost every day, more and more investors joined the rally with an expectation of better returns from the bullish market, said a merchant banker.

He noted that the institutional investors preferred buying stocks as they hope the index will rise further as money flow in the banking sector may increase.

"The investors are optimistic as the central bank unveiled another expansionary monetary policy for this fiscal year, which will help the market to get more liquidity," he said.

The expansionary monetary policy has made money cheaper than ever as the central bank has also supplied a large volume of funds to implement the massive stimulus packages of the government to counter the impacts of the pandemic.

Stocks remained bullish amid growing investor confidence driven by various market-supportive reforms, lower returns from the money market coupled with earnings surprises of many listed companies despite the pandemic, said a top broker.

The stock-market regulator took some market-supportive measures in the past few months which boosted the investors' confidence and lured them into parking fresh funds on stocks, he said.

He noted that mass vaccination rollout, new stimulus packages for the low-income people kept the stock trading open despite strict lockdown helping investors to keep their confidence in the market despite virus worries.

Walton Hi-Tech Industries contributed most to rise of the DSEX followed by Beacon Pharmaceuticals, Investment Corporation of Bangladesh, Titas Gas, British American Tobacco and Orion Pharmaceuticals, according to data from Amarstock.com, a stock-market data analyst.

The continuation of expansionary monetary policy has encouraged investors to put fresh funds on stocks, commented EBL Securities, in its regular market analysis.

The stockbroker noted that the reopening of export-oriented factories also stimulated investors' buoyancy as they expect that the economy will resume normalcy riding on mass vaccination in the country.

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