Stocks rebounded strongly Tuesday from a market tailspin as institutional investors came to the rescue with big buys of lucrative shares.
The securities regulator planned further recovery measures in a meeting on the day with merchant banks, as a two-day freefall was snapped with the institutional-investment backup.
Following the previous day's massive fall -- which sent small investors in a raucous protest on the Dhaka bourse premises -- market opened on an optimistic note. The day's trading ended on a sharp upturn despite some volatility early in the session.
DSEX, the benchmark index of Dhaka Stock Exchange (DSE), made a quantum leap by 120.48 points or 1.75 per cent to 7,005 at the close, after shedding 191 points in the past two consecutive days.
"Institutional investors, including the state-run Investment Corporation of Bangladesh, supported the run from the front, helping the market to close sharply higher," said an analyst, seeking anonymity.
He noted that the market had fallen steeply without any valid reason earlier in the past few days, aside from some rumours, while the market bounced back the same way, which is "not a good sign for a sustainable market".
Price surge of some big paid-up companies, which had undergone erosion in the last few days, contributed most to the index rise on Tuesday, according to a leading stockbroker.
Besides, insurance, financial institutions, cement sectors came back strongly as cent-percent companies saw a price surge, he added.
Large-cap firms such as British American Tobacco, Robi, ICB, Beximco, and Titas Gas accounted for 28-point rise of DSEX jointly, according to amarstock.com, a market data analyst.
As prices of many stocks had fallen sharply in the past few days, optimistic investors, including institutional ones, took advantage of this and increased their stake, said Khairul Bashar Abu Taher Mohammed, CEO of MTB Capital.
"I think this is a good opportunity to invest in lucrative stocks since many listed companies disclosed better performances in recent times," he added.
The two other indices also ended higher. The DS30 index, comprising blue chips, rose 17.10 points to finish at 2,661 and the DSES (Shariah) index advanced 16.86 points to close at 1,482.
Turnover, another important indicator of the market, however, dropped to Tk 13.86 billion on the prime bourse, 5.71 per cent lower than the previous day's tally of Tk 14.70 billion.
The investors started taking fresh position as many stocks traded at a bargain price due to recent consecutive price erosions, commented EBL Securities.
The prices of more than 90-per cent traded issues closed higher, as out of 376 issues traded, 340 closed higher, 22 ended lower and 14 issues remained unchanged on the DSE trading floor.
All the major sectors posted gains, excepting telecom which lost 0.30 per cent as the sector heavyweight GP shed 1.65 per cent alone.
The financial institutions sector generated the highest returns of 3.80 per cent, followed by general insurance with 2.60 per cent, cement 2.50 per cent, engineering 1.40 per cent, power 1.30 per cent and food 0.90 per cent.
Textile sector also soared nearly 5.0 per cent as prices of 57 companies rose out of 58 listed textile firms.
A total number of 195,064 trades were executed in the day's trading session with a trading volume of 314.45 million securities.
The market-cap of DSE also increased to Tk 5,639 billion from Tk 5,572 billion in the previous day.
Beximco returned onto the day's top turnover list with shares worth Tk 867 million changing hands, closely followed by Delta Life Insurance (Tk 784 million), NRB Commercial Bank (Tk 757 million), Orion Pharma (Tk 705 million) and Fortune Shoes (Tk 561 million).
KDS Accessories was the day's best performer, posting a gain of 10.18 per cent, following its corporate declaration. The company has recommended 15-per cent cash dividend for the year ended on June 30, 2021.
The largest market-cap listed company --- Grameenphone --- was the day's worst loser, shedding 1.65 per cent.
The port-city bourse, CSE, also rebounded strongly with the CSE All Share Price Index - CASPI - soaring 274 points to settle at 20,444 and Selective Categories Index - CSCX - advancing 159 points to finish at 12,283.
Here, too, the gainers beat the losers as 245 issues closed higher, 33 ended lower and 22 remained unchanged.
The port-city bourse traded 13.75 million shares and mutual fund units worth nearly Tk 418 million in turnover.
Meanwhile, the Bangladesh Securities and Exchange Commission (BSEC) Tuesday held a troubleshooting meet with the chief executive officers (CEOs) of leading merchant banks and brokerage firms.
The participants told the meeting, chaired by the BSEC commissioner Dr Shaikh Shamsuddin Ahmed, that there is no justified reason behind the recent freefall of stock prices.
Mohammad Rezaul Karim, a BSEC spokesperson, said the CEOs had been asked to play market-supportive role.
"The CEOs also upheld their stance regarding market-supportive role. They have expressed optimism regarding normalcy of the market," Mr Karim said.
At the meeting the participants also spoke about taking strong measures against "unscrupulous persons having ill motive" of adding fuel to the fire in market fall.
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