Market shrugs off regulator's latest cooling measures
Wednesday, 3 February 2010
FE Report
Dhaka stocks set new records both in turnover and rise of the market Tuesday, despite the securities regulator's market cooling measures as money from new investors continued to be pumped into the market.
The flow of fresh fund shrugged off the measures of the Securities and Exchange Commission, taking the market to new highs, analysts said adding that the measures just drove the investors towards the fundamentally-strong shares.
The benchmark DSE General Index (DGEN) crossed the 5,500-mark in mid session for the first time and at the end of the day closed at 5,503.37 with a gain of 52.22 points or 0.95 per cent, boosted by Grameenphone and banking issues.
The broader DSE All Shares Price Index (DSI) surged by 41.87 points or 0.93 per cent to end at 4,532.37 while the DSE 20 blue chip index also soared by 71.30 points or 2.33 per cent to 3,121.15.
The SEC the previous day revised the margin loan criteria in a bid to cool down the market, awash with fresh fund flow.
Under the new criteria, investors will no longer get credit against an issue having a PE (price-earning) ratio of over 50 and the brokerage houses must provide margin loans at the ratio of 1:1.5, instead of the earlier 1:2.
"Many investors including institutions, non-resident Bangladeshis and even housewives invest in stocks expecting higher return," said Akter H Sannamat, Managing Director of the Prime Finance and Investment Ltd
"Investment in the real sector of the economy was slow, indicating that the financial institutions sit on idle money. This money has also been injected into the market," he added.
"The SEC measures apply to those companies having a PE ratio of more than 50, so the banking shares with sound fundamentals have risen," said Sannamat.
"New listings are needed urgently to make the market stable," he said
The continued fund flow pushed up the daily turnover to a new mark as it stood at Tk 16.91 billion, up from the previous day's Tk 16.89 billion.
"Everyday new investors are entering the market against the backdrop of the rising market," said a stockbroker.
Gainers took a strong lead over the losers as out of 245 issues traded, 72 advanced, 171 declined and two remained unchanged.
Grameenphone rose 2.65 per cent to close at Tk 286.80 per share on the news that the country's telecom giant and its nearest rival Banglalink have signed an agreement to expand the latter's network across the country.
The banking sector, the market's bellwether, edged 3.24 higher with twelve banks gaining more than 5.0 per cent. Bank Asia, Shahjalal Islami Bank and Standard Bank rose more than 7.0 per cent.
The energy sector rose 0.62 per cent and cement 0.56 per cent.
Non-banking financial institutions dropped 1.40 per cent, mutual funds 2.60 per cent, pharmaceuticals 0.79 per cent, general insurance companies 2.22 per cent and life insurance companies 0.73 per cent.
The debutant Prime Bank First ICB AMCL Mutual Fund was the biggest gainer with a rise of 135.0 per cent to finish at Tk 135.0 on its unit price of Tk 10.
Beximco Ltd, the flagship company of the Beximco Group, topped the turnover list with shares worth Tk 1.07 billion traded.
It was followed by Grameenphone, AB Bank, Southeast Bank, Bextex, Beximco Pharma, Prime Bank, Shahjalal Bank, Titas Gas and Square Pharma.
Of the top ten gainers, eight came from banking sector.
Standard Bank Limited, Shahjalal Bank, Bank Asia, Dhaka Bank, Southeast Bank, Trust Bank, Islami Bank, BATBC and Social Islamic Bank Limited were the next other leading gainers.
The prominent losers included Alpha Tobacco, Fu-Wang Food, BIFC, BSC, Meghna Condensed Milk, Al-haj Textile, Fine Foods, Libra Infusion, Reckitt Benckiser and GQ Ball Pen.
Dhaka stocks set new records both in turnover and rise of the market Tuesday, despite the securities regulator's market cooling measures as money from new investors continued to be pumped into the market.
The flow of fresh fund shrugged off the measures of the Securities and Exchange Commission, taking the market to new highs, analysts said adding that the measures just drove the investors towards the fundamentally-strong shares.
The benchmark DSE General Index (DGEN) crossed the 5,500-mark in mid session for the first time and at the end of the day closed at 5,503.37 with a gain of 52.22 points or 0.95 per cent, boosted by Grameenphone and banking issues.
The broader DSE All Shares Price Index (DSI) surged by 41.87 points or 0.93 per cent to end at 4,532.37 while the DSE 20 blue chip index also soared by 71.30 points or 2.33 per cent to 3,121.15.
The SEC the previous day revised the margin loan criteria in a bid to cool down the market, awash with fresh fund flow.
Under the new criteria, investors will no longer get credit against an issue having a PE (price-earning) ratio of over 50 and the brokerage houses must provide margin loans at the ratio of 1:1.5, instead of the earlier 1:2.
"Many investors including institutions, non-resident Bangladeshis and even housewives invest in stocks expecting higher return," said Akter H Sannamat, Managing Director of the Prime Finance and Investment Ltd
"Investment in the real sector of the economy was slow, indicating that the financial institutions sit on idle money. This money has also been injected into the market," he added.
"The SEC measures apply to those companies having a PE ratio of more than 50, so the banking shares with sound fundamentals have risen," said Sannamat.
"New listings are needed urgently to make the market stable," he said
The continued fund flow pushed up the daily turnover to a new mark as it stood at Tk 16.91 billion, up from the previous day's Tk 16.89 billion.
"Everyday new investors are entering the market against the backdrop of the rising market," said a stockbroker.
Gainers took a strong lead over the losers as out of 245 issues traded, 72 advanced, 171 declined and two remained unchanged.
Grameenphone rose 2.65 per cent to close at Tk 286.80 per share on the news that the country's telecom giant and its nearest rival Banglalink have signed an agreement to expand the latter's network across the country.
The banking sector, the market's bellwether, edged 3.24 higher with twelve banks gaining more than 5.0 per cent. Bank Asia, Shahjalal Islami Bank and Standard Bank rose more than 7.0 per cent.
The energy sector rose 0.62 per cent and cement 0.56 per cent.
Non-banking financial institutions dropped 1.40 per cent, mutual funds 2.60 per cent, pharmaceuticals 0.79 per cent, general insurance companies 2.22 per cent and life insurance companies 0.73 per cent.
The debutant Prime Bank First ICB AMCL Mutual Fund was the biggest gainer with a rise of 135.0 per cent to finish at Tk 135.0 on its unit price of Tk 10.
Beximco Ltd, the flagship company of the Beximco Group, topped the turnover list with shares worth Tk 1.07 billion traded.
It was followed by Grameenphone, AB Bank, Southeast Bank, Bextex, Beximco Pharma, Prime Bank, Shahjalal Bank, Titas Gas and Square Pharma.
Of the top ten gainers, eight came from banking sector.
Standard Bank Limited, Shahjalal Bank, Bank Asia, Dhaka Bank, Southeast Bank, Trust Bank, Islami Bank, BATBC and Social Islamic Bank Limited were the next other leading gainers.
The prominent losers included Alpha Tobacco, Fu-Wang Food, BIFC, BSC, Meghna Condensed Milk, Al-haj Textile, Fine Foods, Libra Infusion, Reckitt Benckiser and GQ Ball Pen.