DSEX, the Dhaka Stock Exchange (DSE) prime index, crossed the 4,700-mark on Sunday after two-and-a-half months amid investors' growing confidence in the market.
The market opened on a flying note and remained vibrant throughout the session amid strong buying pressure from the investors, including global fund managers.
DSEX jumped 169.54 points or 3.71 per cent to settle at 4,734, the highest since December 2, last year.
DSEX accumulated 349 points, and DSE market-cap rose to Tk 198 billion in the past four straight sessions, after the Bangladesh Bank (BB) issued a circular confirming fund support to boost the ailing capital market.
The central bank on February 10 allowed 59 scheduled banks to form a Tk 2.0 billion special fund for each of them by taking low-interest loans from the BB to invest in the stock market.
In line with the soaring index, turnover, another important market indicator, also rose to Tk 9.16 billion on the country's premier bourse, climbing further by 25 per cent over the previous day's mark of Tk 7.30 billion.
It was the biggest single-day transaction in more than one year since February 14, 2019, when the turnover totalled a record of Tk 9.32 billion.
Market analysts said the government's special fund support, lowering banks' deposit rates, slashing interest rates on postal savings, and move to offload shares of some state-owned entities boosted investors' confidence in the market.
However, they opined that the investors should be 'careful' in making their investment decisions, as share prices of many low-profile companies also rose 'abnormally' in line with the good ones in the rising market.
Dr A B Mirza Azizul Islam, former finance adviser to the caretaker government, advised the investors to act 'rationally' while investing in stocks in the rising market.
"The investors should be careful about the unusual share price hike of low-profile companies," Mr Islam, also former chairman of the securities regulator, told the FE on Sunday.
He noted that sharp rise in prices of low-profile companies' shares without any reason is not a good sign for a sustainable stock market.
"The investors should make their investment decisions based on companies' fundamentals, technical analysis, price level, and disclosed information," he added.
Echoing Mr Islam, Khairul Bashar Abu Taher Mohammed, chief executive officer of MTB Capital, told the FE that continuous rise of the index is a matter of moderate concern.
He noted that the prices of some low-cap companies rose abnormally. Eventually, such price level will not sustain (in the long run), which will ultimately hit the investors hard.
He opined that the news of lowering banks' deposit interest rates coupled with slashing interest rates on postal savings prompted the investors to put fresh stakes on stocks.
The news that the Asian Development Bank (ADB) has lent US$ 170 million more to Bangladesh to assist in the country's ongoing capital market reforms also encouraged the investors, said a leading broker.
According to EBL Securities, the investors showed frenzied enthusiasm to inject fresh funds in the market in the hope of capital gain in the ongoing bull run.
The stockbroker noted that the central bank's fund supportive measures and the ADB's lending of $170 million for strengthening the capital market have boosted the investors' confidence.
On Sunday, the gainers took a strong lead over the losers, as out of the 356 issues traded, 293 closed higher, 40 ended lower, and 23 remained unchanged on the DSE trading floor.
The Chittagong Stock Exchange (CSE) followed the suit with its All Shares Price Index - CASPI - soaring 533 points to close at 14,436, and Selective Categories Index - CSCX - rising 325 points to finish at 8,758.
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