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DSEX gains highest in nine months

FE Report | January 02, 2019 00:00:00

The prime index of the major bourse soared 1.47 per cent on Tuesday, the first day of the year, which is the biggest single-day gain in the last nine months.

DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by nearly 80 points or 1.47 per cent to settle at 5,465, as investors put fresh stakes on stocks.

It was the biggest single-day gain of DSEX since March 29, 2018, when the index gained nearly 109 points or 1.97 per cent.

Continuing the previous seven days' gaining streak, the market started with a flying note, and it remained vibrant throughout the session amid strong buying pressure from the investors.

DSEX added more than 245 points in the past eight consecutive sessions.

However, DSEX slumped 14 per cent or 859 points year-on-year in 2018, hitting five years highest loss since 2013.

Market operators said a calm political situation after the national election, higher operating profit growth of most of the listed banks, and the securities regulator's positive move on margin rules prompted the investors to take fresh position on stocks.

Most of the banks, except a few ones, maintained their operating profit growth in 2018, although the amount of soured loans is on the rise and the interest rate spread is maintaining a declining trend.

Khairul Basher Abu Taher Mohammad, chief executive officer of MTB Capital, said the investors showed their buying appetite amid expectations at the beginning of the new year, as the political situation has eased after the national election.

Mr Bashar, also secretary general of Bangladesh Merchant Bankers Association (BMBA), opined that the relaxation of margin rules for another two years also helped the market to end higher.

The investors reacted positively and started to exhibit their participation in response to various steps taken by the securities regulator, said Mostaque Ahmed Sadeque, former president of DSE Brokers Association.

On Tuesday, the rally was largely spurred by large-cap sectors, particularly engineering, power, banking and financial institutions.

Engineering sector posted the highest gain of 2.47 per cent, followed by power with 2.34 per cent, banking 2.03 per cent, and financial institutions 1.55 per cent.

A leading broker said the investors took a positive stance after the massive victory of the Awami League-led grand alliance in the 11th parliamentary election.

In the election, the alliance secured 288 seats, while Jatiya Oikya Front and its key alliance BNP bagged seven.

"However, the investors should carefully invest in a rising market, and should analyse the fundamentals of securities beforehand," he added.

Trading activities, however, remained low on the day, as the total turnover amounted to Tk 5.30 billion, which was 1.48 per cent lower than the previous day's Tk 5.38 billion.

The prices of about 80 per cent traded issues soared. Out of the 341 issues traded, 264 closed higher, 54 ended lower, and 23 issues remained unchanged on the DSE trading floor.

The two other indices also ended higher. The DS30 index, comprising blue chips, soared 27.41 points to finish at 1,908, and the DSES (Shariah) index rose 12.98 points to settle at 1,245.

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