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DSEX increases by 5.55% due to regulatory measures

Staff Correspondent
06 Aug 2022 00:00:00 | Update: 05 Aug 2022 21:36:38
DSEX increases by 5.55% due to regulatory measures

The Dhaka Stock Exchange’s key index, DSEX, rose 5.55 per cent as a result of regulatory measures.

The Dhaka stock exchange went through a recovery this week because of the reintroduction of floor price set by BSEC, while afterward, the finance ministry’s recommendation to calculate banks’ capital market exposure at a cost price basis boosted the ongoing investors’ optimism.

The DSEX gained 331.74 points or 5.55 per cent and closed the week at 6,312.25 points. The blue-chip index DS30 gained 119.95 points and stood at 2,265.20 points. 

Average turnover increased by 59.62 per cent to Tk 1012 crore. The textile sector dominated the turnover chart, covering 23.79 per cent of total turnover.

The DSEX fell by 2.4 per cent or 146 points, to settle below the psychological threshold of the 6,000 mark at 5,981 points in the previous week after 15 months.

In the last week, the key index crossed the 6300-mark in early trading on Wednesday as bargain hunters put fresh bets on lucrative stocks riding on regulatory support.

The Ministry of Finance on Tuesday allowed the banks to calculate capital market exposure on a cost price basis instead of the market price.

On Thursday, the Bangladesh Bank issued a circular following the recommendation of the finance ministry, which allowed the banks to calculate their stock market exposures at cost prices instead of market prices.

“From now on, a bank can calculate its stock market exposure at cost prices instead of the market prices of shares, corporate bonds, and mutual funds,” it said.

As a result, when the market rises, the banks’ sale pressure will lessen, according to a stockbroker.

Meanwhile, record remittance inflow and growth in exports are some of the leading indicators that the country’s economy is recovering from its gloomy phase, EBL Securities said in the market commentary.

Moreover, the latest circular from Bangladesh Bank regarding the banks’ exposure in the stock market investments is expected to drive positive market psychology in the next few sessions as well, the brokerage said.

Market performed five sessions during this week. Market started on a positive note (2.57%) on Sunday. It remained positive (0.49%) on Monday, (1.38%) on Tuesday, and (0.81%) on Wednesday. Finally, market ended on a positive note (0.19%) on Thursday.

All the financial sectors posted positive performance this week. The NBFI had the highest gain of 6.58 percent, followed by general insurance at 5.96 percent, life insurance at 5.35 percent, banks at 4.27 percent, and mutual funds at 2.62 percent.

All the non-financial sectors posted positive performance this week. Engineering booked the highest gain of 4.83 per cent followed by Pharmaceutical 4.56 per cent, telecommunications at 4.23 per cent, Fuel & Power 3.55 per cent, and Food & Allied 3.41 per cent.

Out of the 395 issues traded, 373 advanced, 7 declined, and 8 remained unchanged on the Dhaka bourse for the week. 

On July 28, the securities regulator BSEC has once again set the floor price for stocks in a set of measures aimed at curbing volatility in the markets.

The Bangladesh Securities and Exchange Commission (BSEC) said in an order that the “opening price of any listed security will be set at the average of the closing price of July 28, 20220 and closing price of the immediately preceding four trading days.”

“The average price, calculated for each security, will be considered as the floor price and the lowest limit of the circuit breaker,” it said.

The port city bourse, the Chittagong Stock Exchange (CSE), also showed up this week. CSCX and CASPI declined by 5.3 per cent and 5.3 per cent respectively. 

 

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