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Stocks nudge higher on BB moves

Average turnover jumps 17pc on DSE

Babul Barman | February 15, 2020 00:00:00

Stocks rebounded strongly in the outgoing week as investors put fresh stakes in shares thanks to the central bank's bailout package to boost the ailing capital market.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 112 points or 2.51 per cent to settle at 4,564, after losing 61 points in the past two straight weeks.

Market analysts the central bank's market supportive measures coupled with government's moves to divest shares of selected state-owned entities and banks encouraged investors to some extent.

The Bangladesh Bank on Monday allowed 59 scheduled banks to form a Tk 2.0 billion special fund each by taking low-interest loans from the BB for five years to invest in the stock market.

A merchant banker said the institutional investors, including global fund managers became active in the market and put fresh stakes in stocks riding on liquidity support news.

He noted that the investors reacted positively to the money market regulator steps and went on heavy buying, particularly in banking, financial institutions and telecom sectors' shares.

An analyst said the central bank's moves would improve the liquidity flow. But securities regulator should address the issues like insider trading, rampant manipulation, good governance and dearth of quality stocks for long-term stability in the market.

UCB Capital said the investors started taking fresh positions on stocks after the central bank allowed private commercial banks to form a Tk 2.0 billion special fund each to invest in stock market.

Two other indices also ended higher. The DS30 index, comprising blue chips, rose 22.77 points to finish at 1,536 and the DSE Shariah Index soared 18.40 points to close at 1,045.

The outgoing week saw five trading days as usual. Of them, first two sessions closed lower while last three ended higher.

The weekly total turnover on the prime bourse stood at Tk 25.96 billion, up from Tk 22.22 billion in the week before.

The daily turnover averaged Tk 5.19 billion, up 17 per cent, from the previous week's average of Tk 4.44 billion.

According to EBL Securities, stocks rallied on Bangladesh Bank's declaration to provide special fund support for the ailing capital market.

Investors cheered up after the declaration and engaged in heavy trading activities amid optimism that took the average turnover to Tk 5.10 billion, said the stockbroker.

International Leasing Securities said buoyancy in large-cap stocks, particularly on Square Pharma, City Bank, LafargeHolcim and British American Tobacco played a major role behind the week's index surged.

Among the major sectors, non-bank financial institutions booked the highest gain of 9.85 per cent, followed by engineering with 4.44 per cent, power 2.79 per cent, banking 2.07 per cent, pharma 1.60 per cent and food 1.0 per cent.

Only telecom sector suffered 0.72 per cent loss.

The market capitalisation of the DSE also rose 1.94 per cent to Tk 3,470 billion on Thursday, from Tk 3,404 billion in the previous week.

Gainers outnumbered the losers, as out of 358 issues traded, 246 closed higher and 94 ended lower while 18 issues remained unchanged on the DSE floor.

LafargeHolcim dominated the week's turnover chart for the fourth straight weeks with shares worth Tk 1.26 billion changing hands during the week. Orion Pharma was the week's best performer, posting a gain of 34.89 per cent while the Shympur Sugar Mills was the worst loser, losing 12.28 per cent.

The Chittagong Stock Exchange (CSE) also ended higher, with its CSE All Share Price Index - CASPI -soaring 361 points to settle at 13,903 and the Selective Categories Index - CSCX - rising 221 points to finish the week at 8,432.

Here too, the gainers beat the losers as 232 issues closed higher, 63 ended lower and 13 remained unchanged during the week

The port city bourse traded 50.37 million shares and mutual fund units worth Tk 1.54 billion in turnover last week.


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