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Block trade helps DSE turnover exceed Tk 12b

No bad news for market in proposed budget seems good news for investors

FE REPORT | June 05, 2023 00:00:00

The daily turnover on the Dhaka Stock Exchange (DSE) exceeded Tk 12 billion for the first time in seven months in the maiden post-budget session on Sunday, backed by block transactions.

Although there is no new incentive for the market in the proposed budget for FY24, unveiled by Finance Minister AHM Mustafa Kamal before parliament on Thursday, stocks were buoyant since there was no proposal for cuts of existing tax facilities applied to the market.

Kamal did not propose any new tax provision either, which might encourage investors, said Md Sajedul Islam, senior vice-president of the DSE Brokers Association of Bangladesh.

"Investors reacted positively to the proposed budget as there is no bad news for the stock market."

The recent increase in market participation also bolstered confidence of investors across the trading floor, Mr Islam added.

The market turnover climbed 26 per cent over the previous trading session to Tk 12.54 billion on the prime bourse in the biggest single-day transaction since November 8 last year.

Block trade accounted for 16 per cent of the Sunday's turnover while trading of Islami Bank Bangladesh alone constituted 9 per cent.

Shares of Tk 3.42 million of Islami Bank were sold in the block market for Tk 1.12 billion on Sunday.

Earlier, the United Arab Emirates-based BTA Wealth Management bought over 2 per cent stake of Islami Bank in the block market at a cost of Tk 1.10 billion, according to the DSE data.

The prime bourse witnessed an increase in transactions on its block board in recent months when transactions in the main market fell due to the imposition of the floor price since July last year.

A block trade is a large and negotiated transaction of securities. Block trades can take place outside the main market through a private purchase agreement.

The Bangladesh Securities and Exchange Commission (BSEC) eased buying and selling of shares up to 10 per cent lower than the floor price to boost transactions in the block market in November last year.

Along with rising turnover, DSEX, the prime index of the DSE, also went up by 10.58 points or 0.16 per cent to settle at 6,366, the highest since November 8 last year.

The DSES Index, which represents Shariah-based companies, also advanced 3.43 points to 1,383. However, the DS30 Index, which consists of blue-chip companies, dropped 2.28 points to 2,199.

"Buoyant investors continued to take positions in lucrative issues, enticed by the enthusiasm across the trading floor," said EBL Securities.

The market started to recover from the early dip owing to opportunist investors' continued chase for selective stocks, causing the core index to remain afloat by the end of the session, the stockbroker added.

According to International Leasing Securities, bargain hunters put fresh bets on sector-wise issues, having seen macro-economic progress reflected in the proposed budget.

Investors were active on both sides of the trading fence while sellers dominated the buyers at closing. As a result, of the traded issues, 100 declined, 77 advanced and 173 remained unchanged on the DSE.

Investors' attention was mostly focused on life insurance as it accounted for 18 per cent turnover, followed by the IT and banking sector.

Intraco Refueling became the most-traded stock with shares worth Tk 593 million changing hands, as investors chased its shares, buoyed by its promising business outlook.

Recently, the company signed a 10-year contract with state-owned Sundarban Gas Company to supply gas to industrial areas of Gazipur from Bhola.

The Chittagong Stock Exchange (CSE) also ended higher with the CSE All Share Price Index (CASPI) gaining 32 points to settle at 18,788 and its Selective Categories Index (CSCX) rising 21 points to close at 11,240.

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