The key index of the Dhaka Stock Exchange (DSE) on Thursday crossed the 5,000-mark after a year, driven by regulatory moves and resumption of economic activities.
The DSEX of the prime bourse went up by 39.60 points or 0.79 per cent to settle at 5,011.
It has been the highest level of the index in more than 12 months since September 8, 2019, when the key index was 5,033 points.
The index has surged by a quarter since the market's reopening on May 31, 2020 after a 66-day shutdown enforced to slow the spread of Covid-19.
Furthermore, the market capitalisation added Tk 667 billion, reaching Tk 3,789 billion.
Bangladesh equity market was also the best performing globally in August as the key index surged 15.78 per cent, according to BRAC EPL Stock Brokerage and BRAC EPL Research.
Vietnam witnessed a strong rally with a 10.4 per cent index gain as it flattened the curve of the second wave of coronavirus cases while Pakistan and Sri Lanka registered gains of 4.7 per cent and 4.0 per cent respectively on the back of continued positive investors' sentiment in August, according to the research.
As the bank deposit interest rate fell drastically, the investors are taking position in the undervalued stock market in the hope for a higher return, the leading brokerage said in a note.
The brokerage said that with the expected arrival of an effective vaccine and a return to normalcy by early next year, investors believe the stock market is likely to regain strength with the economic recovery.
The market has been rising due mainly to the growing confidence in the new commission that has taken some steps against wrongdoers, Khairul Bashar Abu Taher Mohamed, chief executive officer of MTB Capital, told the FE.
He noted that the regulatory measures were crucial for the rise in boosting the confidence of investors, who have driven both the index and turnover in recent times.
"The message gave confidence and the confidence influenced the people to pour money into stocks," he said.
Mr Bashar, a former secretary-general of the Bangladesh Merchant Bankers Association, said the low interest rate, excess liquidity in the banking sector and the decline in sales of saving instruments means money ended up in the stock market.
He, however, said the investors should carefully invest in a rising market and should analyse the fundamentals of securities beforehand as prices of many low-profile stocks rose abnormally.
Market operators said the active participation of the high net worth individuals due to lower returns on the money market andgradual improvement of economic activities prompted the investors to inject fresh funds into the market.
The capital market regulator continued with its tough stance on gamblers and came up with a number of conditions for junk stocks and slapped fat fines on several companies as part of the clampdown on the wrongdoers.
The BSEC has taken punitive action against around 80 people and institutions in the last three months for violating various securities market-related rules.
The new commission has taken some measures against errant directors of listed companies and cancelled some questionable IPO proposals, sending out a clear message that it would not be easy to manipulate and bring weak companies to the market under the watch of the new leadership.
The regulator has also moved to restructure the boards of 'Z' category companies for bringing positive changes in their operations, changed the definition of 'Z' category to ensure accountability of the companies and reduced the trading cycle to T+3 from T+9.
The commission has warned of actions against the rumour-mongers under the Digital Security Act.
The securities regulator's strict stance on ensuring mandatory shareholding rules and the signs of economic recovery after pandemic-induced shocks had also a positive impact on the stock prices.
Following such regulatory moves, the enthusiastic investors continued to show their buying appetite, especially for large-cap stocks, amid growing confidence in the market, said a leading broker.
Turnover, the crucial indicator of the market, was Tk 10.24 billion on the country's premier exchange, down from Tk 10.78 billion a day earlier.
Gainers outnumbered the losers, as out of 356 issues traded, 190 closed higher, 117 ended lower while 49 issues remained unchanged on the DSE trading floor.
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