Capital market passes a memorable week

The Dhaka Stock Exchange has passed a memorable week with its benchmark DSEX index reaching a historic high and other indices touching new heights.

The benchmark index went up by 1.1 per cent or 78.44 to settle at 7,329 points at the end of the week, the highest position since the index was launched in 2013.

According to the market analysts, the entrance of new investors to share trading increased significantly last week as the authorities reduced interest rates on savings certificates.

It gave the capital market a boost and helped the bourses to retain bullish trend.

The average turnover increased by 14.79 per cent to stand at Tk 2,229 crore at the DSE last week.

Keeping similar pace, other market indicators also extended the previous week’s gaining trend.

Talking to The Business Post, Abu Ahmed, a former Dhaka University professor, attributed the bullish stock market to reduction in interest rates of savings certificates and lower interests in bank deposits.

“To get good returns, there is no alternative for investors to investing in the capital market as the government has announced a reduction in interest rates on savings certificates. At the same time, interest rates on bank deposits are now extremely low,” he said.

He also added that the investors choose capital market for making investment in the recent days after the recent regulatory decisions.

“Many started to come to the market after the regulatory decisions. It is good for the market. But the tendency of exiting the market with a quick profit is a bad sign. By investing in good stocks, you can get good returns if you stay in the market for a long period of time,” he said.

EBL securities, in its weekly market review, said although the index’s uptrend cooled down in the last few weeks, investors continued to stay positive about the market as they expect the macro economic outlook to stay favorable and the listed companies to post earning growths.

Last week, the top index puller was LafargeHolcim Cement as it contributed 23.7 points to the key index.

On the other hand, Beximco Pharma turned out to be the top index dragger as it contributed by seven points to the index fall.

Investors were mostly active in Pharmaceuticals & Chemical (15.7 per cent), Textile (13.8 per cent) and Engineering (11.6 per cent) sectors.

Majority of the sectors observed correction, out of which Travel (15.2 per cent), Cement (11.9 per cent) and Services (10.3 per cent) experienced positive performance this week while Jute (-5.7 per cent), Mutual Fund (-5.7 per cent) and Life Insurance (-3.1 per cent) witnessed price correction.

Trading on the SME board has commenced this week with six companies- four were from OTC and two were newly listed companies. But the first session of the board appeared to be dull on Thursday, with shares worth Tk 2519 trading at the board.

However, the market insiders are optimistic and said the SME board would be the equivalent to the main market in the next two or three years.

The DSE market capitalization increased 0.78 per cent to Tk5.81 lakh crore last week.

The top gainer company was Orion Pharma in terms of closing price with its share price increasing by 21.13 per cent.

Meanwhile, the port city bourse, Chittagong Stock Exchange (CSE), also registered gain this week with CSCX and CASPI advancing by 148.3 and 231.0 points respectively.