DSEX record highest single-day rise in 19 months

Dhaka stocks rebounded sharply on Wednesday, with the benchmark DSEX index surging the largest single-day gain in 19 months, as investors reacted positively to the central bank’s move to relax the rules on the bank’s exposure to the stock market.

Shrugging off concerns of uncertainty from the political and economic front, and new variant Omicron, the market recovered sharply from Tuesday’s steep sell-off, dealers say.

The DSEX index registered rapid gains, soaring by more than 143 points or 2 per cent to settle at 6,847. It is the highest single-day increase since March 10, 2020, when it gained over 148 points and reversed from the previous session’s slump of 92 points.

The Shariah-based DSES index rose 32 points or 2.29 per cent to close at 1,437 and the blue-chip DS30 index also was up 73 points or 2.92 per cent to 2,589.

Stocks of 373 issues traded, 293 gained, 45 declined, and 35 remained unchanged.

The leading market pullers were Beximco Ltd, Grameenphone, Beximco Pharmaceuticals, Square Pharmaceuticals, Walton Hi-Tech Industries, Robi, British American Tobacco Bangladesh Company, United Power Generation and Distribution Company Ltd and Power Grid. These companies added 86 points to the benchmark index.

On Tuesday, the Bangladesh Bank had agreed to relax the rules on banks’ investment in stocks in a move to shore up the capital market and settle the differences between the central bank and securities regulators. The banks’ investments in stocks will be calculated based on cost price instead of the market price. The stockmarket exposure ceiling for a bank is 25 percent of their capital, according to the banking company law.

The BB earlier directed the banks to adjust their stockmarket exposure exceeding the permitted ceiling, leaving a negative impact on the stock market.

“The two regulators also agreed to meet frequently to coordinate the rules and regulations so that the market does not get any wrong signal,” said BSEC Commissioner Shaikh Shamsuddin Ahmed after the meeting with the BB officials.

EBL Securities in its note said, “The premier bourse of the country snapped its prolonged bearish vibe with a considerable gain on the bourse as investors turned optimistic after BB, BSEC meeting gave the positive nod on resolving policy issues that are limiting fund inflow into the stock market.”

However, turnover, a crucial indicator of the market, declined by 3.86 per cent and was recorded at Tk 1,102 crore as against Tk 1,146 crore in the previous session.

All of the sectors except travel witnessed positive returns. Miscellaneous led by Beximco Ltd was the highest gainer surging 5.7 per cent, followed by paper 4 per cent, and life insurance 3.9 per cent.

The port city bourse, CSE, also settled in green terrain. The selected indices (CSCX) and All Share Price Index (CASPI) advanced by 233.3 points and 383.9 points respectively.