Bangladesh Bank governor Atiur Rahman’s resignation boosted stocks yesterday from a two-day slide, according to brokers.
The market opened on an upbeat mood in the morning with the DSE benchmark index, DSEX, soaring more than 26 points around the mid-session, but losing some points on short-term profit booking in the wee hours.
“The sentiment was lifted initially when the news of governor’s resignation hit the market, but this overabundance cooled down later,” said a leading stockbroker.
He said local investors, as usual, were more or less short-term speculators who rely on emotions.
But some investors were reluctant to join the market’s rally after realisation that there was nothing in his stepping down that changed the fundamentals overnight.
Just before the beginning of trading hour, Atiur resigned over the cyber heist of $101 million from the central bank’s foreign currency reserves, which is said to be the world’s biggest ever bank theft.
The heist came to light in Bangladesh only a couple of days ago following a media report in the Philippines though it occurred early last month.
During Atiur’s seven years service to the central bank, he launched a series of populist policies to take bank services to the doorstep of millions of rural poor in Bangladesh, which was appreciated widely.
But at the same time, he has been criticised for loan scams in the state-owned banks and the central banks’ some policies that were believed to be one of the causes for the stock market crash in late 2010.
At the time of crash, commercial banks had been involved heavily in the stock market business and became the key player in the stock market.
Analysts said the central bank’s policies on banks’ exposure to the stock market had significantly played a negative role in the market’s free-fall, which is a failure on the part of the central bank as a supervisory agency.
On the day, some investors held a rally in front of the DSE, welcoming Atiur’s resignation.
At the end of the day, the DSEX settled at 4,475, rising over 8 points or 0.2%, recovering from 16 points that declined in previous two straight sessions.
But the bottom line is that the volume of trade sharply increased as the DSE turnover hit Tk435 crore, a jump of almost 30% over the previous day and the highest in nearly two weeks.
Share prices of over 50% scrips rallied as out of 314 companies traded on the day, 159 closed positive, 98 negative and 57 remained unchanged.
