Stocks posted modest rise yesterday, shrugging off increased cash reserve requirement (CRR) the central bank imposed on banks, as the market was already awash with liquidity.
The market opened in an upbeat mood in the morning, but lost lustre in the mid-session as late selling pressure chipped away some of early gains. The benchmark DSEX ended at 4,393 with a gain of 25 points or 0.5%, extending its gaining streak for the second consecutive session.
The Shariah index DSES rose marginally 2 points or 0.3% to 1,000. The comprising blue chips DS30 closed at 1,614, inching up by about 4 points or 0.3% to 1,614.
Chittagong Stock Exchange (CSE) Selective Categories Index, CSCX, was up 34 points to 8,381.
On Monday, Bangladesh Bank raised the CRR for banks to 6% from 5.5% to contain inflation. CRR is the amount of funds that the banks have to keep with the central bank.
“Sudden increase in CRR by Bangladesh Bank (BB) was unattended by the market,” said IDLC Investments.
It said large pile of money in banking sector still remains idle. “So, investors continued their buying mood of previous session.”
Lanka Bangla Securities said the increase in CRR is not expected to have much impact on the banking industry as there is already excess liquidity in the banking system.
Buoyed by the high level of trading volume of banking and pharma stocks, market rallied in continuation of previous trading day, though market turnover was lower than that of previous day as investors preferred remaining on the safe side before final declaration of waiving tax on capital gains, it said.
Turnover at DSE standing at more than Tk280 crore, which was 4.3% lower over the previous session’s value, indicating that investors were in cautious mood.
Life Insurance came to spotlight on the day, following impressive corporate deceleration by the National Life Insurance that announced 20% cash and 38% bonus dividends.
Pharmaceuticals, banks and power edged higher. Telecommunication was the biggest loser, shedding over 1%, as profit booking broke its rising streak over last few sessions.