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Stocks rebound as bank, telecom issues surge

News on banks' paid-up capital, rate cuts hopes lures investors

FE Report | February 26, 2019 00:00:00

Stocks rebounded on Monday, after a single-day break, as optimistic investors showed their buying appetite on banking sector shares.

Market analysts said news of central bank's move to raise banks' paid-up capital coupled with hopes for cuts in interest rates on savings instruments infused positive sentiments into the market.

The central bank is set to raise paid-up capital of scheduled banks to Tk 5.0 billion from the existing Tk 4.0 billion over the next two years, officials said.

The government is also considering reducing the yield rates of savings certificates, chairman of National Board of Revenue (NBR) Mosharraf Hossain Bhuiyan said recently.

If that happens, it will divert liquidity from the money market into the capital market, said an analyst of a leading brokerage firm.

He noted that apart from the savings certificate issue, the central bank's move for raising scheduled banks' paid-up capital also boosted investor confidence.

Accordingly, banking sector posted a 2.05 per cent gain with 24 banks closed higher. The banking sector also dominated the turnover chart, grabbing 16 per cent of the day's total turnover.

The market opened on positive note and the upward trend continued till end of the session with no sign of reversal.

At the end of the session, DSEX, the prime index of the Dhaka Stock Exchange (DSE), settled at 5,755, advancing 41.52 points or 0.72 per cent over the previous day.

Two other indices also ended higher. The DS30 index, comprising blue chips, advanced 19.96 points to finish at 2016 and the DSES (Shariah) index gained 7.38 points to settle at 1,319.

Turnover, a crucial indicator of the market, stood at Tk 7.18 billion on the country's premier bourse, soaring nearly 24 per cent over previous day's two-month lowest turnover of Tk 5.81 billion.

A total number of 141,062 trades were executed in the day's trading session with trading volume of 130.24 million shares and mutual fund units.

The market-cap of the DSE increased to Tk 4,168 billion, from Tk 4,141 billion in the previous day.

International Leasing Securities said the buoyancy in large-cap sectors, particularly in bank, telecom, pharma and financial institutions sectors helped the DSEX to end higher.

Telecommunication posted the highest gain of 2.84 per cent, followed by banking 2.05 per cent, non-bank financial institutions 0.66 per cent, and pharmaceuticals 0.45 per cent.

On the other hand, engineering, power and food sectors lost 0.61 per cent, 0.55 per cent and 0.02 per cent respectively.

According to EBL Securities, the bargain hunting targeting financial stocks after a recent fall in share prices of banking and non-banking financial issues, taking market in green zone.

The losers, however, took a modest lead over the gainers, as out of 345 issues traded, 166 closed lower, 137 ended higher and 42 remained unchanged on the DSE trading floor.

Square Pharmaceuticals topped the day's turnover with 1.64 million shares worth Tk 450 million changing hands, closely followed by Monno Ceramic, Khulna Power, Bangladesh Submarine Cable Company and Grameenphone.

ICB AMCL Second Mutual Fund was the day's best performer, posting a 7.22 per cent gain while Imam Button was the worst loser, plunging by 9.18 per cent.

The port city bourse Chittagong Stock Exchange also backed to the green with the CSE All Share Price Index - CASPI - gaining 82 points to settle at 17,593 while the Selective Categories Index - CSCX -advancing 53 points to finish at 10,654.

Here too, the losers beat the gainers as 135 issues closed lower, 81 ended higher and 38 remained unchanged.

The port city bourse traded 5.45 million shares and mutual fund units worth Tk 229 million in turnover.

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