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Stocks jump, raising turnover to two-month high

Favorable monetary policy, IMF loan hope help gain market momentum

FE REPORT | January 16, 2023 00:00:00

Stocks witnessed yet another upbeat session on Sunday, with the turnover hitting two-month high, as bargain hunters put fresh bets on sector-specific shares hoping that hardships on the macroeconomic front will ease.

The upward momentum persisted throughout the session, fueled by higher participation. Investors sought quick rallies in sector-specific issues in anticipation that the market would gain its momentum, supported by signs of economic recovery.

DSEX, the benchmark index of the Dhaka Stock Exchange, went up by 35.45 points to settle at 6,250. DSEX added 59 points in the past four trading days.

Top positive index contributors were Beacon Pharma, Bangladesh Shipping Corporation, Orion Pharma, Genex Infosys, and Sea Pearl Beach Resorts. They jointly contributed 12 points to the rise of the prime index.

Stocks sparked a rally after a two-month break as enthusiastic investors went for buying oversold stocks after the possibility of Bangladesh getting the International Monetary Fund loan loomed, market operators said.

General investors seemed to be encouraged to put bets on some oversold stocks because of the regulator's assurance to keep the 'floor price' in place for now. The favorable monetary policy also helped them gain confidence.

The investors' enthusiasm led the daily turnover to cross Tk 7 billion on the prime bourse to Tk 7.11 billion, a 40 per cent increase over the previous day. It was the highest turnover since November 13 last year.

"Some big investors, including institutional investors, were putting fresh bets on lucrative stocks which helped the market turnover and index higher," said Md. Sajedul Islam, senior vice president of the DSE Brokers Association of Bangladesh.

The general investors are getting their confidence back gradually following various initiatives taken by the regulators, said Mr Islam, managing director of Shyamol Equity Management.

The Bangladesh Bank governor hinted that the bank interest rate cap will not be lifted anytime soon.

The investors kept their buying interest in all the major sectors such as services, insurance, miscellaneous and pharmaceuticals, said International Leasing Securities.

The IT sector dominated in the turnover list, capturing 19 per cent of the day's total turnover, followed by miscellaneous (13 per cent) and pharmaceuticals (12 per cent).

The gainers took a strong lead over the losers as out of 361 issues traded, 110 closed higher, 61 lower and 190 issues remained unchanged on the DSE trading floor.

Genex Infosys became the most-traded stock with shares worth Tk 634 million changing hands, closely followed by Bangladesh Shipping Corporation, Orion Pharma, Bashundahar Paper Mills and Intraco Refueling Stations.

The Chittagong Stock Exchange (CSE) also ended higher with the CSE All Share Price Index (CASPI) gaining 78 points to settle at 18,431 and its Selective Categories Index (CSCX) rising 47 points to close at 11,046.

The investors came back to the ailing market with an expectation of a favorable monetary policy addressing the current liquidity scenario in the money market, which is going to favor the capital market as well, said EBL Securities, in its regular market analysis.

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