The Dhaka Stock Exchange (DSE) has restructured its blue-chip index, DS30, with three companies incorporated and three others dropped from the list as part of its semi-annual evaluation based on stock performance.
The re-balancing led to the inclusion of Bangladesh Steel Re-Rolling Mills (BSRM), ACME Laboratories, and Power Grid Company of Bangladesh in DS30, done by the DSE Index Committee in line with the index methodology.
On the other hand, Kohinoor Chemicals, Unique Hotel & Resorts and industrial gas producer Linde Bangladesh have been excluded.
The revised composition of the 30-stock index will come into effect on July 19, according to a statement issued on Sunday.
According to DS30 criteria, eligible stocks must have a float-adjusted market capitalisation worth above Tk 500 million as of the rebalancing reference date. The eligible stocks must also demonstrate a minimum three-month average daily trade value of Tk 5 million as of the rebalancing reference date. Moreover, companies representing the stocks must secure net positive income over the last 12 months.
The DSE said the Index Committee had carried out the rebalancing in accordance with the approved index methodology to ensure that the DS30 continues to represent the country's most liquid and fundamentally strong listed companies.
The inclusion of BSRM, one of the country's leading steel manufacturers, ACME Laboratories, one of the major drug makers, and state-owned power transmission utility Power Grid is expected to strengthen the index's representation of the manufacturing, healthcare and power sectors.
The DS30, launched in 2013, comprises 30 large and liquid listed companies selected primarily on the basis of free-float market capitalisation, liquidity and investability. The index is widely followed by institutional and foreign investors as well as fund managers to gauge the performance of the country's equity market.
Market analysts said changes in the composition of the index often attract investors' attention as stocks added to the index may witness increased demand from institutional investors and portfolio managers seeking to align their holdings with the benchmark index.
Conversely, stocks excluded from the index may experience some portfolio reallocation by index-tracking investors, although the actual market impact depends on overall investor sentiment and trading activity.
The latest rebalancing comes at a time when investor confidence has been gradually improving following a series of regulatory reforms, supportive fiscal measures and a steady recovery in market turnover.
The benchmark index of the Dhaka bourse recently exceeded the 5,800 mark for the first time in nearly two years, reflecting renewed buying interest in fundamentally strong stocks.
The DSE reviews the composition of the DS30 every six months to ensure that the benchmark accurately reflects changes in the market and continues to serve as a reliable indicator of the performance of Bangladesh's leading listed companies.
babulfexpress@gmail.com
