Stocks take 2nd biggest jump in 7 years, turnover 12-month high
The country’s prime bourse on Sunday gained 3.71%, the second biggest since the broad index was introduced seven years ago, under the impacts of post office savings tools rate cut and banks' special fund for stock market.
DSEX, the key index of Dhaka Stock Exchange (DSE), gained 169.54 points or 3.71% on the day to end at 4,734.15 points.
The index was launched on January 27, 2013 with 4,056 as base points. The first biggest gain of the index in a single day was 234.23 points on January 19, 2020.
Sunday's turnover stood at Tk916 crore, up by 25% over previous day’s mark of Tk730 crore. It happens to be the biggest single-day transaction in the last 12 months since February 14, last year, when the turnover totaled a record Tk932 crore.
Market insiders said the central bank’s supportive measures coupled with government moves to divest shares of selected state-owned entities boosted investor’ confidence in the market.
The news that Asian Development Bank (ADB) would lend $170 million more to assist the country’s ongoing capital market reforms also encouraged the investors, they said.
High official of top brokerage houses, talking to Dhaka Tribune, as the interest rate on savings in post office was halved, people would feel encouraged to invest in stock market.
Bangladesh Bank on February 10 issued a circular, allowing scheduled banks to form a special fund of Tk200crore each for investment in the capital market.
The fund can be drawn from the bank’s own resources or borrowing money from the central bank through Treasury bill or bond repurchase agreements or repos at a 5% interest rate.
These initiatives opened up an opportunity to bring a fresh investment of Tk12,000 crore from all 60 banks in the country, market operators said.
Beside, the Asian Development Bank (ADB) on Saturday approved a second tranche loan of $170 million to conclude the Third Capital Market Development Program in Bangladesh.
UCB Capital Management Limited in its daily market commentary said that the market advanced 3.7% riding on large caps such as Brac Bank, Square Pharma and BATBC.
“Liquidity support fund by the Bangladesh Bank and interest rate slash on fixed deposit of post office has paved the way for new investment in the market,” it also said.
All major sectors including bank, pharmaceuticals, telecommunication, food, energy, textile, engineering and life insurance increased on Sunday.
The market-cap of the DSE also rose by Tk8,465 crore to Tk3,55,531 crore, from Tk3,47,066 crore in the previous session.
EBL Securities Limited in its daily market commentary said that the market gained further momentum on Sunday as investors showed frenetic enthusiasm to inject new funds in the market in the hope of capital gain in the ongoing bull run.
Two other indices of Dhaka bourse also ended higher. The DS30 index, comprising blue chips, rose 169.54 points to finish at 1,592 and the DSE Shariah Index soared 29.92 points to close at 1,045.
Among the traded issues, 293 gained, 40 declined and 23 remained unchanged during the session in DSE.
LafargeHolcim Bangladesh Limited secured the leadership position on the top turnover chart. Orion Infusion Limited secured the highest gain of 10% during the session. Alltex Industries turned out to be the worst loser with its price declining 7.86%.
The port city’s bourse, Chittagong Stock Exchange, also ended in upswing mood. The selected index, CSCX, and all share price index, CASPI, advanced by 325.7 and 533.7 points respectively.