• Monday, Nov 18, 2019
  • Last Update : 02:32 pm

ICB fund brings stocks back on positive trend: DSEX gains 110.33 points

  • Published at 11:13 pm October 15th, 2019
web-DSE-File photo of Dhaka Stock Exchange Limited
File photo of Dhaka Stock Exchange Limited Mehedi Hasan/Dhaka Tribune

On the day, trading activities increased by 9.4% over the last session on Dhaka Stock Exchange (DSE). At the day's end, the turnover stood at Tk328.1 crore and the key index, DSEX, gained 110.34 points or 2.34% to settle at 4821.64 points

The key index of the country's premier bourse returned to the green zone on Tuesday, gaining over 100 points after losing 226 points in the last six consecutive sessions.

The investors now feel upbeat that the state-run Investment Corporation of Bangladesh (ICB) made new investments to revive the falling market.

On the day, trading activities increased by 9.4% over the last session on Dhaka Stock Exchange (DSE). At the day's end, the turnover stood at Tk328.1 crore and the key index, DSEX, gained 110.34 points or 2.34% to settle at 4821.64 points. 

Market insiders said that Dhaka bourse observed an exceptional session on the day following news that the ICB would support the market with Tk200 crore it got from Sonali Bank to restore the investors' confidence.

Talking to Dhaka Tribune, chief executive officer of a top merchant bank informed that Bangladesh Bank released a loan of Tk50 crore in favour of the City Bank for investing in the capital market in line with the central bank’s move to support ailing stock market. 

Following these developments, investors started taking fresh positions on Tuesday, he said.

All the sectors made positive return at the end of on Tuesday session. Investors exerted buying pressure on telecommunication, fuel and power and engineering sectors. Pharma and engineering sectors dominated the market turnover. 

ICB Managing Director Md Abul Hossain told Dhaka Tribune: “We received Tk200 crore from Sonali Bank, which we have already invested in the stock market to support the market with liquidity and restore confidence of the investors."

“We would get another Tk800 crore from four other public banks very soon," he informed, adding that they were doing their best to support the market.

On Sunday, to prop up the market, ICB sought Tk2,000 crore emergency fund from Bangladesh Bank and five state-run banks.

Honorary professor at Dhaka University’s economics department Abu Ahmed has told Dhaka Tribune that ICB’s support positively impacted the market but it will not last long. 

"ICB needs to pursue for increased fund," he said.

He also finds weak enforcement, particularly taking no actions against market curtail, and lack of efforts to bring institutional investors to floor as other major factors hampering the normal growth of stock business.

DSEX index lost 1,239 points or 20.8% from its highest hit of 5,950 points since January 24 this year.

On Tuesday, gainers took a strong lead over the losers as out of 352 issues traded, 311 advanced, 24 declined and 17 remained unchanged on DSE. At the end of the day, market-cap of the DSE also rose to Tk3,63,563 crore from Tk3,55,790 crore of the previous session.

The port city’s bourse, Chittagong Stock Exchange (CSE), also returned to green zone. CSCX and CASPI advanced by 149.3 and 242.8 points respectively.

International Leasing Securities Ltd in its daily market analysis said that all of the sectors witnessed better performance on Tuesday. 

Top loser list was mostly dominated by ‘Z category’ stocks. The pharma sector continued to dominate the turnover board and grabbed 17.5% of the day’s turnover.

About the ICB and Bangladesh Bank move, DSE Director Minhaz Mannan Emon told Dhaka Tribune that this was a good initiative to make the capital market vibrant. The initiative impacted the market positively.

On the other hand, small stock investors on Tuesday staged demonstration at the continuous fall of the key indices at stock exchanges. 

A group of small investors took to the streets in front of Dhaka Stock Exchange building at Motijheel under the banner of Bangladesh Pujibazar Biniogkari Oikya Parishad.

During the protests, the aggrieved investors also demanded resignation of Bangladesh Securities and Exchange Commission (BSEC) Chairman M Kairul Hossain and Commissioner Md Helal Uddin Nizami for what they called their failure to protect the investors’ rights.

Meanwhile, most of the banks have remained reluctant to get low-interest fund from the central bank for investments in the capital market as only The City Bank so far has applied for such fund after 23 days of the introduction of the facility to revive the ailing capital market, central bank sources said.

On September 22 this year, the central bank announced in a circular that fresh liquidity support would be given to banks to raise their respective portfolios in the capital market up to the regulatory limit directly or through subsidiaries.

According to the circular, issued by the Department of Offsite Supervision (DOS), banks will get the liquidity support through special repo (repurchase agreement) facility at a rate of 6% interest for a 28-day period, which may be extended in rotation up to maximum six months.