The market rebounded strongly Monday, snapping an eight-day slump, as bargain hunters put fresh bets on stocks, riding on the government's moves to revamp the ailing market.
Market insiders said the stock market regulator and the finance ministry took a number of initiatives to increase fund flow in the stock market which helped the market bounce back.
The Bangladesh Securities and Exchange Commission raised the margin-loan ratio to 1:1 while the finance ministry asked to extend the tenure and amount of the capital-market refinancing fund to support the moribund market.
Following the news, the bargain hunters, including institutional investors, rushed to buy shares from the very beginning of the session and the key index climbed over 100 points instantly at the opening.
Finally, DSEX, the prime index of the Dhaka Stock Exchange (DSE), soared 118.86 points or 1.93 per cent to settle at 6,261, after losing 556 points in the past eight consecutive days.
Two other indices also ended higher with the DSE 30 Index, comprising blue chips, rose 32.58 points to finish at 2,309 and the DSE Shariah Index (DSES) jumped 15.26 points to close at 1,376.
"Stocks rebound strongly with renewed investors' optimism as the finance ministry and the securities regulator came forward to help revamp the moribund market," said a stockbroker.
The government moves came following the eight days relentless fall in the share prices that caused the DSEX to come down to an 11-month low on Sunday.
Finance Minister AHM Mustafa Kamal held a meeting with the central bank governor, finance secretary, and financial institution division (FID) secretary on Sunday to devise mechanisms for preventing further fall of the stock indices.
The finance minister asked the high officials to provide necessary support so that the investors' confidence can be restored in the market.
The minister instructed to extend the tenure of the Tk 8.56 billion capital market refinance scheme from which further investments in the markets can be made immediately.
On March 05, 2012, the government formed the scheme worth Tk 9.0 billion to protect the interest of small investors that is scheduled to expire on December 31, 2022.
Meanwhile, the stock market regulator raised the margin loan limit to 1:1 to prop up the bear market. The securities regulator also suspended the 15-minute pre-opening session to avoid misuse of the feature.
"Extended credit facilities for margin clients to reduce sell pressure amidst the bearish market have calmed down investors' nerves," said EBL Securities.
However, the confidence of most investors is yet to recover as uncertainties persist due to the un-abating Russia-Ukraine war and volatile commodity prices globally, said the stockbroker.
Turnover, a crucial indicator of the market, stood at Tk 6.59 billion on the country's premier bourse, which was 3.37 per cent lower than the previous day's mark of Tk 6.82 billion.
All the sectors witnessed buying pressure, leading to the share price surged of more than 91 per cent stocks. Out of 376 issues traded, 343 advanced, 19 declined and 14 issues remained unchanged.
The Chittagong Stock Exchange (CSE) also rebounded with the CSE All Share Price Index - CASPI -soaring 322 points to settle at 18,400 and the Selective Categories Index - CSCX rising 192 points to close at 11,039.
Of the issues traded, 207 advanced, 51 declined and 16 issues remained unchanged on the CSE.
The port-city bourse traded 9.90 million shares and mutual fund units with turnover value of Tk 240 million.
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