Retail investors remain glued to the trading screen at a brokerage house in the city on Sunday, as the benchmark index of the Dhaka Stock Exchange crossed 6,000 level — FE photo by Shafiqul Alam The prime index of the Dhaka Stock Exchange (DSE) crossed the 'psychological' threshold of 6,000-mark Sunday for the first time in 40 months as investors' confidence boosted.
DSEX, the prime index of the DSE, went up by 22.87 points or 0.38 per cent to settle at 6,008. It was the highest level of DSEX in nearly 40 months since February 15, 2018, when DSEX was 6,050.
The market capitalisation of the DSE also soared to a fresh all-time high at Tk 5,034 billion on Sunday, surpassing the previous day's record high of Tk 5,017 billion.
Market experts said the prime index of the DSE surpassed the historical 6000-point level as the capital market got back its rhythm riding on various regulatory reforms coupled with budgetary expectations.
They opined that lower returns on the money market, liquidity glut and limited scope for investment in other instruments, earnings surprises of listed companies and easing virus worries also the reasons behind the present bullish trend in the stock market.
The present stock market regulator took some market supportive measures in the past few months, which boosted the investors' confidence in the market, said a top broker.
He said the regulator is continuing its efforts to build a stable and vibrant market through listing of some big firms having good fundamentals, imposing penalty on many manipulators along with restructuring the boards of many weak companies etc.
"The recent growth in turnover and index - the two most important indicators of the market in general - suggested that the investors' confidence in the market is back," said a merchant banker.
He noted that the institutional investors and high nets worth individual investors were putting fresh funds on stocks amid high hopes in the upcoming budget.
He also said the market normally remains buoyant in months when the country's national budget is announced in the hope of incentives.
The corporate tax rates for both listed and non-listed companies are expected to cut by 2.50 percentage points in the next budget to help the businesses amid the Covid-19 pandemic.
However, he advised the investors to learn the necessary skills for trading on the stock market, and then invest in good shares in order to avert any misfortune.
The stock market regulator also should increase its monitoring over the market manipulators, he added.
"The stock market rose on the buying frenzy of investors, as investors showed great confidence in the leadership of the new regulatory commission," commented EBL Securities.
Driven by earning surprises, capital gain optimism on bank stocks have charged up the upwards momentum, said the stockbroker.
The market's bell-weather banking stocks continued to shine as the sector moved up further by 0.80 per cent.
The banking stocks that remained under pressure for a long time due to soaring bad loans attracted investments due to their surprising quarterly earnings.
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