Stocks witnessed a big jump on Tuesday, with key index of Dhaka bourse crossing 7000-mark, as buoyant investors put fresh bets on banking shares riding on regulatory moves on margin loans.
The market opened sharply higher and DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), soared 115.21 points or 1.65 per cent to settle at 7,056.
Market analysts said scrapping the index-based credit facilities by Bangladesh Securities and Exchange Commission had a positive impact on the market.
The stock market regulator on Monday issued a directive, saying stockbrokers and merchant bankers may extend credit facilities at 1:0.8 to their approved clients for any individual stock having price earnings (P/E) ratio up to 40.
Earlier, stockbrokers and merchant bankers were allowed to disburse margin loans at a ratio of 1:0.8 until the DSEX existed below 8,000 points.
Two other indices also ended higher with the DSE 30 Index, comprising blue chips, soaring 31.71 points to finish at 2,691 and the DSE Shariah Index (DSES) rising 19.77 points to close at 1,484.
Turnover, a crucial indicator of the market, also rose to Tk 14.91 billion, which was 5.0 per cent higher than the previous day's tally of Tk 14.21 billion.
"Institutional investors are currently active in the market and are buying banking and financial institutions stocks. So, the market kept rising," said an analyst at a leading brokerage firm.
Price surge of selective large-cap stocks such as Square Pharma, BRAC Bank, Islami Bank, LafargeHolcim, ICB, Grameenphone and IFIC Bank helped the index to exceed 7,000-mark after 12 trading days, according to amarstock.com.
The regulatory move that allowed margin loans up to 80 per cent of equity instead of index-based margin ratio had a positive impact on the market, commented EBL Securities.
"Investors' interest in the bank and financial institutions stocks ahead of the year-end declaration added further strength to the market momentum on the day," said the stockbroker.
The banking sector generated the highest return, gaining 4.50 per cent as share prices of 31 banks out of 32 listed banks closed higher.
The financial institutions, cement, pharma and power sectors also gained 3.70 per cent, 2.60 per cent, 1.30 per cent and 0.60 per cent respectively.
The investors' activity was also mostly centered on the banking sector, capturing 28 per cent of the day's total turnover led by BRAC Bank. It was followed by the pharma sector with 16 per cent and textile 11 per cent.
Gainers took a modest lead over the losers, as out of 376 issues traded, 219 advanced, 130 declined and 27 remained unchanged on the DSE trading floor.
Beximco was the most traded stock with shares worth Tk 1.44 billion changing hands, followed by IFIC Bank (Tk 1.16 billion), BRAC Bank (Tk 735 million), Square Pharma (Tk 572 million) and Beximco Pharma (Tk 497 million).
AB Bank was the day's top gainer, rising 9.92 per cent while Renata was the worst lower, losing 8.81 per cent following its price adjustment after the record date.
The Chittagong Stock Exchange (CSE) also ended higher with the CSE All Share Price Index - CASPI -jumping 315 points to settle at 20,638 and the Selective Categories Index - CSCX-- soaring 192 points to close at 12,407.
Of the issues traded, 150 advanced, 113 declined and 27 remained unchanged on the CSE.
The port-city bourse traded 21.70 million shares and mutual fund units with a turnover value of Tk 659 million.
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