Stocks bounce back after 8-day rout

Stock markets bounced back on Monday after falling for eight straight sessions, as the investors reacted positively to the credit facilities raised by the securities regulator.

The market jumped as soon as it opened in the morning and the momentum continued as the days progressed.

The benchmark DSEX index climbed almost 119 points or 1.93 per cent to finish at 6,261, scaling back from Sunday’s 11-month low and offsetting losses of 555 points in the previous eight consecutive days.

Credit facilities raised by the Bangladesh Securities and Exchange Commission largely helped the benchmark index get back on its feet, dealers said.

The margin loan limit was set at 1:1, meaning an investor will get Tk 100 against the deposit of the same amount for any marginable company, said the regulator in a statement on Sunday. The previous margin loan ratio was 1:0.8.

The market regulator revised the credit facilities to facilitate investors for purchasing shares to increase money flow to the downtrend stock market, said a BSEC executive.

“Dhaka bourse break-free the prolonged bearishness after the regulatory stances acted as a tonic to clutch panic-driven sell pressure,” said EBL Securities in a note.

Extended credit facilities for margin clients to reduce sell pressure amidst the bearish market have calmed down investors' nerves on the trading floor.

However, the confidence of most investors is yet to recover as uncertainties persist due to the unabating Russia-Ukraine war and volatile commodity prices globally, it said.

The DSE witnessed a slight decrease in participation as the turnover declined by 3.4 per cent to stand at Tk 670 crore as against Tk 680 crore in the previous session.

On the sectoral front, miscellaneous (15.6 per cent) issues exerted the highest turnover followed by pharmaceuticals (13.3 per cent) and bank (9.4 per cent) stocks.

Most of the sectors displayed satisfactory performance, out of which services (5.2 per cent), textile (4.8 per cent), and jute (4.5 per cent ) observed the most positive returns while only the tannery (-0.11 per cent ) sector faced corrections on the bourse.

Out of the 385 issues traded, 343 advanced, 19 declined, and 23 remained unchanged.

The port city bourse, CSE, also settled in green terrain. The selected indices (CSCX) and All Share Price Index (CASPI) have advanced by 192.0 points and 322.3 points respectively.