The stock market closed higher for the second straight week that ended Thursday with improving turnover as the investors put fresh funds into equities, hoping an end to political crisis.
"Improved expectations on the political frontier and hope for market-friendly monetary policy statement boosted investors' confidence in the market. Therefore, investors returned from the sideline," said an analyst.
The week also featured four trading sessions like in the previous three week as the market was closed Sunday on occasion of the country's 10th National Election. The market closed first session lower while last three were closed higher.
Week-on-week, the prime index of Dhaka Stock Exchange (DSE) - DSEX-- went up by 93.73 points or 2.27 per cent to close the week at 4,407.83 points, peaking at 7-week high level.
The DS30 index, the blue chip stocks, outperformed the market with gaining 50.53 points or 3.36 per cent and closed the week at 1,555.61 points.
The Chittagong Stock Exchange (CSE) also ended higher, with its Selective Categories Index - CSCX-gaining 249.35 points or 2.96 per cent to close the week at 8,663.44 points.
The market turnover recovered from last week's sluggish trading. The total turnover on DSE amounted to Tk 18.29 billion last week against Tk 14.28 billion in the previous week.
The daily turnover averaged Tk 4.57 billion, registering 28.0 per cent increase over the previous week's average of Tk 3.57 billion.
"Investors seem to be highly optimistic about market direction ahead. As the new government has taken power, investors are expecting them to take popular decisions that will boost economic activity," said LankaBangla Securities in its weekly market analysis.
The government has reduced source tax in ready market garment (RMG) sector from 0.8 per cent to 0.3 per cent to boost the largest export earning sector as they are badly hit by recent political clashes, the stock broker said.
The central bank's consideration of expansionary and balanced monetary policy statement (MPS) for second half of fiscal year 2013-14 is the most important trigger point for capital market, the stock broker said.
"Market makers are anticipating monetary easing to boost up economic activity. The institutional investors are pouring fresh fund into stocks contributing to consolidate the market with a positive attitude," the stock broker said.
"Market is highly liquid as banks are full with idle money. Real investment from entrepreneurs is still low due to continuous political clashes," he said
So, this high liquidity in the banking system may find its way to DSEX and keep the market vibrant. But ultimate market development still depends on long term business environment, the stock broker added.
"The last week had started after the 10th national election was held. Hope for a breathing space in political frontier influenced the week positively," said IDLC Investments in its weekly market analysis.
"Investors may still be cautious about the political stance, however, they also seems enthusiastic to indulge themselves in the market thus boosting support level and helping the market in making its ground stronger," said Zenith Investments.
The gainers took a strong lead over the losers as out of 297 issues traded during the week, 297 advanced, 28 declined and 3 remained unchanged on DSE floor.
All the major sectors ended in green except banks which lost 0.14 per cent during the week. Pharmaceuticals and fuel & power--the top two gainers among the lot -- gained 3.80 per cent and 3.66 per cent respectively. NBFIs and Telecommunications also ended the week higher with 1.73 per cent and 0.88 per cent gain.
Engineering and Pharmaceuticals were the top performing sectors of the week, gaining 5.26 per cent and 3.92 per cent respectively.
The market capitalisation of the DSE went up by 1.62 per cent as it was Tk 2,673.97 billion at the opening day of the week and it stood at Tk 2,717.36 billion at the closing day of the week.
Golden Son dominated the week's top turnover chart with shares worth Tk 810.88 million changing hands during the week followed by LankaBangla Finance, Generation Next Fashions, Summit Purbanchol Power and Appollo Ispat.
National Tubes was the week's top gainer, posting a rise of 20.41 per cent while Kohinoor Chemicals was the week's worst losers, slumping by 9.54 per cent.
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