The rise of the indices in the capital market continued throughout the last week.
The benchmark index of the Dhaka Stock Exchange – DSEX - crossed the 7,200-mark and settled at 7,258 points, the highest ever since the index’s inception in 2013.
Over the week, the average daily turnover at the Dhaka bourse reached Tk 2,777 crore.
Capital market analysts believe that the market has been on the rising trend due to various initiatives of regulators, including raising quotas for general investors in IPOs.
Many new investors are bringing in idle money to the capital market as the alternative fields for investment shrunk amid the ongoing pandemic. Besides, the dominance of junk stocks in the market has been increasing.
Recently, the stock market regulator, Bangladesh Securities and Exchange Commission (BSEC), asked the DSE to look into the unprecedented rise of indices.
It directed the premier bourse to scrutinise the rise of stocks with poor earnings.
Now, the DSE will investigate if any intermediary had lent money to clients to buy stocks with PE ratios of over 40.
DSEX, the market tracking index of DSE, advanced for the eighth consecutive session and closed at 7,258.75 points with 4 per cent or 278 points gain.
Market researchers attributed the bullish market to the companies with large market capitalization.
EBL Securities, in its weekly market review, said the large cap stocks – such as Square Pharma, BATBC, Beximco Pharma, and EBL – gained ahead of the earnings disclosure and contributed the most last week's index gain.
Square Pharma and BATBC were the top index puller and contributed respectively 45.2 and 43.9 points to the key index.
The other major top index draggers were Pioneer Insurance and Green Delta Insurance.
It also mentioned that the investors stayed buoyant at the market despite cautionary stances from Bangladesh Bank.
However, abnormal price rises in junk stocks in the recent weeks created concern among the investors to some extent, it added.
BRAC EPL, a stock brokerage company, said in its market review that the listed companies' hands were now tied on issuance of unjustified stock dividends as the securities regulator wants investors to relish cash gains from their money in time.
Five types of companies, including Z-category ones, have also not been allowed to issue stock dividends or bonus shares without prior consent of the BSEC.
It will also look into the business activities of asset management companies (AMCs) that do not manage any funds or are not in operation after getting licenses, it added.
According to the DSE website, daily average turnover increased 24.32 per cent and stood at Tk 2,777 crore at the end of the week, up from Tk 2,234 crore in the previous week.
The investors were mostly active in the engineering (12.7 per cent), textile (11.5 per cent) and pharmaceutical (10.9 per cent) sectors.
All the sectors, except general insurance, experienced positive performance this week, out of which tannery (15.2 per cent), food (11.7 per cent) and jute (8.6 per cent) witnessed the highest price appreciation.
Meanwhile, general insurance (-3.6 per cent) sector witnessed the highest price correction.
According to the EBL market review, the tannery sector had registered the highest return - 15.2 per cent - last week, followed by food and jute sectors.
The top gainer was Tamijuddin Textile as its share price increased around 48 per cent to Tk 185.7, whereas the top loser was Meghna Condensed Milk, which lost around 21 per cent of its share price and went down to Tk 23.1.
Last week, the market capital of DSE increased 4 per cent from the previous week’s level and stood Tk 5,86,320 crore.
The top market cap company was Grameen Phone as it registered a capital increase of 9.86 per cent and stood at Tk 52,189 crore.
Meanwhile, the port city bourse, CSE, also registered gain this week as CSCX and CASPI advanced by 489.7 and 803.2 points respectively.
