Dhaka Stock Exchange (DSE), the country’s prime bourse, surged on Wednesday, and market turnover crossed the Tk 1,700 crore mark after around 17 months, rising by 4.8 per cent to Tk 1,730 crore as buoyant investors are putting fresh bets on large-cap companies' securities.
The key index DSEX of the Dhaka bourse gained 6.44 points and closed at 6,352.50. The blue-chip index DS30 and the Shariah-based index DSES closed at 2,135.28 and 1,387.51 points respectively. Most of the large-cap sectors posted negative performance on the day.
Dhaka stock managed to stay afloat in the green territory for eight straight sessions as optimistic investors continued their chase for sector-specific trendy scrips, although cautious investors preferred profit booking to realise their recent gains from the prevailing upbeat vibe in the market, market insiders said.
The market observed volatility throughout the session as investors remained active on both sides of the trading fence, while some large-cap issues exerted a correction that pulled reins on the heated-up market, EBL Securities said in its daily market review.
However, buyers ended up on the dominant side as opportunist investors chased quick rallies in particular scrips, it said.
The indices stayed upbeat, with opportunistic investors pouring new funds into sector-specific issues, driven by positive expectations related to ongoing corporate earnings disclosures.
Furthermore, substantial price appreciation on specific large-cap issues played a significant role in extending the upward trend of the core index for consecutive sessions, the review noted.
Out of the 394 issues traded, 198 advanced, 156 declined, and 40 remained unchanged at the Dhaka bourse.
The bank experienced the highest loss of 1.10 per cent. Block trades contributed 2.8 per cent of the overall market turnover. Orion Pharma Ltd had the most traded share with a turnover of Tk 101 crore.
On the sectoral front, pharmaceutical issues exerted the highest turnover, followed by the engineering and textile sectors.
Sectors displayed mixed returns, out of which ceramics, textiles, and travel exhibited the most positive returns on the bourse on Wednesday, while the life insurance, banking, and financial institutions exerted the most correction.
Chittagong Stock Exchange
The Chittagong Stock Exchange (CSE) also settled on the green terrain. The selected indices (CSCX) and All Share Price Index (CASPI) advanced by 42.7 and 72.4 points, respectively.
Dhaka bourse’s daily turnover crossed Tk 1,700 crore for the first time after the removal of the floor price on most of the listed companies.
On Tuesday [February 6], the Bangladesh Securities and Exchange Commission (BSEC) withdrew the floor price for another six companies’ shares.
The stock market regulator’s order came into effect on Wednesday for Orion Pharmaceuticals, Anwar Galvanizing, and Renata Ltd, and will remain in effect until further notice.
Meanwhile, the remaining three companies — British American Tobacco Bangladesh, Grameenphone and Robi — will have the floor price until their forthcoming record date.
Only six companies now share the floor price. These are Beximco Ltd, BSRM Ltd, Islami Bank, Khulna Power, Meghna Petroleum, and Shahjibazar Power.
On January 18, after the session's closing bell, the Bangladesh Securities and Exchange Commission (BSEC) issued an order rescinding the floor price for all listed companies and mutual funds, except for 35 companies' shares, complying with a long-standing demand from stakeholders.
On January 21, DSEX fell 96.50 points, or 1.52 per cent, in the first trading session after the floor price withdrawal. After five minutes of trading, the key index had plunged about 214 points but later recovered most of the initial losses.
The next day, DSEX gained 14.05 points and closed at 6,254.31. The stock market regulator also withdrew the floor price for 23 more companies that day.
At that time, only 12 companies shared the floor price. These are Anwar Galvanizing, British American Tobacco, Beximco Ltd, BSRM Ltd, Grameenphone, Islami Bank, Khulna Power, Meghna Petroleum, Orion Pharma, Renata, Robi Axiata, and Shahjibazar Power.
Market insiders said the key index was very much expected to fall as a large number of stocks failed to see price discovery for a long time due to the floor price.
They added that many investors did not get the opportunity to trade due to the prolonged price level. As a result, there was pressure to sell shares at the beginning of the day, but it gradually decreased.
Welcoming the floor withdrawal move, a leading stock broker had said the market might see some corrections in the first few days. It is nothing to be afraid of, and the market will recover very soon.
On July 28, 2022, the BSEC imposed floor prices on all securities to prevent shares from falling beyond a certain level amid domestic and global macroeconomic strains.
The share prices of most companies have been stuck at their floor prices for an extended period, pushing investors towards liquidating their holdings and creating a liquidity crisis in the market.
