Stocks rebound on stimulus, vaccine rollout news

DSE market-cap hits fresh all-time high riding on banks

FE REPORT | Wednesday, 14 July 2021

Stocks rebounded strongly on Tuesday, with the key index hitting more than 42-month high, as investors went on buying spree riding on new stimulus and vaccine roll-out news.
Prime Minister Sheikh Hasina on Tuesday announced five new stimulus packages worthTk 32 billion for low-income people, who have been affected by the Covid-19 lockdown restrictions.
Following the previous day's modest correction, the market opened higher and went up steadily till the end as pre-Eid sale pressure eased to some extent amid relaxed lockdown news.
DSEX, the prime index of the DSE, rose 57.62 points or 0.92 per cent to settle at 6,266, highest since January 7, 2018, when the core index was 6,268.
Market capitalisation of the prime bourse also soared to an all-time high at Tk 5,219 billion on Tuesday, surpassing the previous day's record high of Tk 5,177 billion.
Turnover, a crucial indicator of the market, also jumped to Tk 16.68 billion on the country's premier bourse, in a further buck by 4.32 per cent over the previous day's tally of Tk 15.99 billion.
Market experts said the core index holds its firm position at above 6,200 points marks as buying support added strength to the equity indices despite worries over virus-infused shock to the country's economy.
The investors are hopeful about the market as the government announced five new stimulus packages of Tk 32 billion for low-income people and relaxed the ongoing lockdown for eight days ahead of Eid-ul-Azha to facilitate business and public movement, said a merchant banker.
He noted that budgetary measures, removal of the floor price restriction, lower returns from the money market and several regulatory reforms to build a vibrant capital market contributed to the index to reach a 42-month high.
Stocks sparked a rally across all the major sectors riding on optimism due to the resumption of vaccine roll-out in the country, commented EBL Securities.
The stockbroker noted that the previous day's marginal correction prompted investors to exert buying pressure at a lucrative price level as investors are much relaxed on the trading floor due to the easing the nationwide restrictions ahead of Eid.
According to International Leasing Securities, the investors took a fresh position riding on the news that Bangladesh will receive 5.9 million vaccine doses under the COVAX global vaccine sharing initiative this month.
The stockbroker noted that the relaxation of the ongoing lockdown ahead of Eid vacation tempted the investors positively which led them to take position in almost all the sectors.
Two other indices also ended higher with the DS30 index, comprising blue chips, advanced 14.70 points to finish at 2,273 and the DSE Shariah Index rose 7.27 points to close at 1,354.
Most of the major sectors posted gains with the heavyweight banking generating the highest return of 1.90 per cent, followed by cement with 1.70 per cent, engineering 1.0 per cent, financial institutions 0.90 per cent, power 0.60 per cent and telecom 0.50 per cent.
Gainers took a strong lead over the losers, as out of 373 issues traded, 212 ended higher, 129 lower while 32 remained unchanged on the DSE trading floor.
A total number of 299,477 trades were executed in the day's trading session with a trading volume of 612.68 million shares and mutual fund units.
Beximco - the flagship company of Beximco Group- topped the turnover chart with shares worth Tk 1.81 billion changing hands, followed by Power Grid Company (Tk 577 million), LafargeHolcim (Tk 471 million), Southeast Bank (Tk 322 million) and LankaBangla Finance (Tk 303 million).
Fine Foods was the day's best performer, posting a gain of 9.87 per cent while Trust Bank was the worst loser, losing 11.34 per cent following its price adjustment after the record date.
The Chittagong Stock Exchange also ended higher with its All Shares Price Index (CASPI)-gaining 179 points to close at 18,220 while the Selective Categories Index - CSCX rising 103 points to close at 10,932.
Of the issues traded, 165 advanced, 118 declined and 27 issues remained unchanged on the CSE.
The port city bourse traded 29.30 million shares and mutual fund units with turnover value of Tk 577 million.

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