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Stocks rebound strongly riding on bank, telecom shares

FE Report | January 17, 2018 00:00:00

Stocks rebounded strongly Tuesday, snapping a two-day losing streak, as optimistic investors went on buying spree on sector-wise large-cap stocks.

Brokers said the market returned to higher as investors showed their buying appetite on large-cap sectors, especially bank and telecommunication issues ahead of monetary policy announcement.

"The market registered the highest single-day gain since July 3, 2017, driven by rally in banking, non-bank financial institutions and telecommunication sector stocks," said an analyst at a leading brokerage firm.

However, he said, a section of investors remained idle ahead of monetary policy announcement, taking the turnover below Tk 4.0 billion-mark again.

After witnessing sharp fall in the previous two days, the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) opened lower amid thin participation of investors.

After first 30 minutes of trading, the key index returned to higher strongly and the upturn sustained till the end of the session. Finally it closed nearly 71 points higher.

DSEX, the benchmark index of the DSE, which replaced the DGEN in five years back, settled at 6,129, advancing 70.95 points or 1.17 per cent after losing 121 points in the past two straight sessions.

"The market returned to higher as investors perceived that the recent apprehensions and rumours over the banks' advance deposit ratio (ADR) issue and monetary policy issue will not affect the capital market largely," Khairul Bashar Abu Taher Mohammed, chief executive officer of MTB Capital told the FE.

EBL Securities, a stockbroker, said, "The market started with flying note and continued throughout the day driven by hopes and excitement ahead of earnings declaration".

The stockbroker noted that the revival was driven by investors' buying binge after index experiencing significant backlash.

"Investors were busy in taking fresh position in sector specific stocks from banking, telecommunication and fuel & power sector," the stockbroker said.

The two other indices also ended higher. The DS30 index, comprising blue chips, rose 22.21 points or 0.99 per cent to finish at 2,247. The DSE Shariah Index (DSES) also gained 13.52 points or 0.98 per cent to settle at 1,390.

The market activities, however, fell below Tk 4.0 billion-mark again and the total turnover amounting to Tk 3.89 billion, which was 4.18 per cent lower than the previous day's turnover of Tk 4.06 billion.

According to International Leasing Securities, the expectant investors took position on the lucrative price level in different stocks, especially on banking and telecom sector stocks that spurred the bourse to nudge higher.

The port city bourse Chittagong Stock Exchange (CSE) also closed higher with CSE All Share Price Index - CAPSI - soaring 158 points to finish at 18,885.

The Selective Categories Index - CSCX - also surged 95 points to settle at 11,405.

Gainers beat losers as 157 issues closed higher, 55 lower and 17 remained unchanged on the CSE.

The port city bourse traded 8.62 million shares and mutual fund units worth more than Tk 285 million in turnover.

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