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DSEX back above 5700 after nine months

Daily trade turnover scales Tk10b mark again

FE Report | January 09, 2019 00:00:00

The main index of the country's premier bourse exceeded the 5,700-mark after nine months as enthusiastic investors continued to put money anew in stocks.

People familiar with the capital market developments said stocks maintained its post-election rally amid spontaneous participation on hopes and excitement of investors, taking the core index above the 5,700-mark again.

A stable political situation after the elections, higher operating profit growth in most of the listed banks, coupled with the securities regulator's positive move on margin rules, prompted the investors to take position on stocks, said a leading broker.

"The peaceful election has boosted the confidence level of investors and the market is starting to reflect their sentiment," said a merchant banker.

He noted that the investors saw positive changes after the landslide victory of the Awami League-led grand alliance in the 11th parliamentary elections.

DSEX, the prime index of the Dhaka Stock Exchange (DSE), soared more than 115 points or 2.04 per cent to settle at the nine-month high at 5,770.

It was the biggest single-day rise of DSEX in nine months since April 01, 2018. The DSEX gained nearly 150 points or 2.67 per cent on April 01, 2018.

Along with the rising index, the daily trade turnover on the Dhaka bourse scaled the Tk 10-billion-mark once again, as investors' enthusiasm sustained after peaceful election held on December 30 last.

Turnover, a crucial indicator of the market, stood at Tk 10.10 billion on the country's premier bourse, climbing further by 5.0 per cent over the previous day's mark of Tk 9.65 billion.

Due to the 14 per cent correction last year, issues were currently trading at attractive prices offering a lucrative return to investors, commented EBL Securities, in an analysis.

The stockbroker noted the market outlook was supported by buoyancy contingent on political stability after national elections.

Khairul Basher Abu Taher Mohammad, chief executive officer of MTB Capital, said investors' enthusiasm sustained amid positive expectations.

The relaxed margin rules for another two years also helped restore investors' confidence in the market, said Mr Bashar, also secretary general of Bangladesh Merchant Bankers Association (BMBA).

Dr. AB Mirza Azizul Islam, former adviser to caretaker government, said though the market was still under-priced, the single day rise of 115 points was not rational.

Mr. Islam, also former chairman of the securities regulator, advised the investors to invest carefully in a rising market and analyse the fundamentals of securities beforehand.

Mr Islam emphasised bringing reputed companies to the market to mitigate the demand-supply gap.

Market capitalisation of the DSE reached Tk 4,076 billion, the highest in eight months. It was Tk 4,077 billion on April 19 last year.

Gainers outpaced losers as out of 346 issues traded, 238 advanced, 85 declined and 23 issues remained unchanged on the DSE floor.

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