The key index of the Dhaka Stock Exchange (DSE), DSEX, observed a big jump on Thursday despite bad news for the country’s exporters.
DSEX gained 60.65 points and closed at 6,213.99 at the end of trading. The blue-chip index, DS30, and the Shariah-based index, DSES, closed at 2,116.78 and 1,362.93 points, respectively.
Most of the large-cap sectors also posted positive performance on Thursday.
Meanwhile, market turnover increased by 14.5 per cent to Tk 1,122 crore, from the previous session’s Tk 980 crore.
On Tuesday, Bangladesh Bank (BB) reduced the cash incentive rate for 43 export-oriented sectors as part of the country’s preparation for LDC graduation in 2026.
In a circular issued, BB further stated that the new incentive structure will be effective retrospectively from January 1 this year.
Although the central bank made the decision on Tuesday, former finance minister AHM Mustafa Kamal said in his FY2023-24 budget speech that the government will gradually reduce cash incentives as per LDC graduation preparation.
The capital bourse witnessed upbeat momentum in the final session of the week as buoyant investors continued their buy dominance in the major scrips with positive expectations following the favourable corporate earnings declarations for the recently ended quarter, EBL Securities said in its daily market review.
Of the 393 issues traded, 269 advanced, 68 declined and 56 remained unchanged at the Dhaka bourse on Thursday.
The EBL Securities review said that although indices remained flat in the first hour of the session, buyers took control of the trading floor in the subsequent period, prompted by the allure of potential quick gains owing to rebounding optimism across the trading board. Many investors decided to pour fresh funds into equities, adding further strength to the current rallies in sector-specific issues.
NBFI booked the highest gain of 3.31 per cent while the block trades contributed 2.3 per cent of the overall market turnover. Bd.Thai Aluminium Ltd was the most traded share, with a turnover of Tk 58 crore.
The Chittagong Stock Exchange (CSE) also settled on green terrain on the week’s last trading day as the selected indices (CSCX) and All Share Price Index (CASPI) surged by 117.0 and 198.1 points, respectively.
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.
Now only 12 companies share 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 also said 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 said the market might see some corrections in the first few days. It’s nothing to be afraid of, and the market will recover very soon.
On July 28, 2022, 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.
