Dhaka stocks snapped the free fall on Thursday, with majority of securities rebounding from their prolonged losing streak as opportunist investors came up to take fresh bets in low-priced scrips owing to the regulatory move to put an end to the constant market jitters.
The Bangladesh Securities and Exchange Commission (BSEC) on Thursday held meetings with market stakeholders to find possible ways to revitalise the country’s stock market.
The meetings were attended by top executives of banks, merchant banks, and asset managers, who agreed to increase their investments in the capital market, and it is deemed to restore investor confidence on the trading floor, several sources in the BSEC told The Business Post.
Dhaka-Chattogram stocks witnessed consecutive crashes on Monday and Wednesday, sinking to a fresh four-month low on Wednesday as investors continued to rush to selloff their holdings to shun further capital erosion.
The stocks’ free fall made investors panic, as per stockbrokers, leading them to dump their shares to avert further losses amid the downward market momentum.
In this situation, the Bangladesh Securities and Exchange Commission (BSEC), to help support the market, sat with the chief executives of banks, top brokerage firms, asset management companies, and investment bankers at the commission headquarter in Dhaka.
Following the move, the DSEX, the key index of the DSE, gained 34.02 points or 0.55 per cent to settle at 6,254 on Thursday, with all large-cap sectors displaying positive performance on the bourse.
The DSE turnover, however, decreased by 14.79 per cent to Tk 299.5 crore yesterday.
Issues discussed in BSEC meetings:
In a meeting, BSEC Commissioner Dr Mizanur Rahman directed all the fund and asset managers to protect the interests of investors and conduct their activities by following proper procedures, a BSEC statement said.
The development of existing mutual funds in the country's capital market, the current market situation, and various investment aspects were discussed in details there.
Top executives of asset managers and fund managers sought steps to make mutual funds more popular in the capital market. They also thanked the BSEC and all concerned for resolving several tax issues as a result of the recent legislation on income tax and income tax in the mutual fund sector.
They emphasised increasing the participation of institutional investors for the development of the country's capital market and mutual funds.
Top officials of fund managers and asset management companies assured that they would do their utmost to help mutual fund industry and the stock market.
BSEC Executive Director Mohammad Rezaul Karim asked fund and asset managers to make efforts to develop the mutual fund sector by producing new funds, increasing fund sizes, increasing underlying assets, and raising awareness among investors.
On the same day, BSEC commissioner Dr Shaikh Shamsuddin Ahmed met separately with top officials of banks, merchant banks, and asset managers.
In the meeting, he asked to establish a strong bond market in the country, and opined that potential investors should be identified for bond investments.
In the future, the development of the country's capital market and bond market would be carried out in partnership with all those associated with the country's financial sector, as promised on behalf of the BSEC.
The development of the bond market would increase the opportunities and possibilities of long-term financing in the country, Shamsuddin said.
The top executives of banks, merchant banks, and asset management companies agreed that the development of the bond market is necessary to establish a sustainable capital market and the economy. They also agreed to increase their investment in the capital market.
BRAC Bank CEO and Managing Director, Salim RF Hussain; Shanta Asset Management Vice Chairman, Arif Khan; EBL Securities Managing Director, Sayedur Rahman; Standard Chartered Bank Managing Director, Muhit Rahman; City Bank’s AMD and CFO, Mahbubur Rahman, among others, were present in the BSEC meetings.
Thursday’s Market Scenario:
The market closed positive but the turnover fell sharply for another session. The broad index DSEX went up by 34.02 points. Except for the telecommunications sector, all other sectors closed positive.
The upbeat market trend persisted till the closure as bargain hunters dominated the market since most of the stocks observed price erosion in the past few trading sessions, said EBL Securities, a stockbroker, in its daily market review.
However, the majority of investors remained reluctant and preferred to sit on cash owing to concerns regarding the waning momentum of the market, it said.
The market review also said, the capital bourse stopped the free fall, with majority of scrips rebounding from their prolonged losing streak as some opportunist investors came up to take positions on low-priced scrips owing to positive expectations from the regulator’s meeting with the capital market stakeholders.
Pharmaceutical booked the highest gain of 0.48 per cent, followed by food and allied (0.30 per cent), engineering (0.27 per cent), bank (0.20 per cent), fuel and power (0.20 per cent), NBFI (0.04 per cent), and telecommunication (0.00 per cent).
Block trades contributed 9.4 per cent of the overall market turnover.
Fu Wang Food was the most traded share with Tk 27.6 crore worth of its shares changing hands.
Out of the 392 issues traded, 153 advanced, 8 declined, and 231 remained unchanged on the Dhaka bourse.
The port city bourse, Chittagong Stock Exchange (CSE), also settled on green terrain, with its two major indices – the selected indices (CSCX), and the all-share price index (CASPI) – advancing by 25.7 points and 42.3 points, respectively.
