Friday, May 03, 2024
Dhaka stocks continued rallying for the second consecutive trading session on Wednesday, as optimistic investors continued their buying spree following the approval of IMF loan second tranche, and fresh investment interest with the lifting of the floor price.
According to market participants, there was doubt about the approval of the IMF loan second instalment amid ongoing political instability. But after news of the approval came out on Wednesday, confidence returned among investors amidst volatility.
As a result, new investments are being made in the market. Besides, the lowest share price of listed companies, a topic of much discussion in the capital market for the last two weeks, called the floor price, is going to be cancelled.
In view of this, investors have invested much more consciously.
However, the Bangladesh Securities And Exchange Commission (BSEC) Chairman had recently told the media that the floor price is not being canceled before the next polls. Transactions then increased as investors made fresh investments in companies that are outside the floor price range.
Turnover of the premier bourse Dhaka Stock Exchange (DSE) hit a nearly three-month high to Tk 769 crore on Wednesday, up 28 per cent compared to the tally of Tk 601 crore recorded in the previous session.
Before this, the DSE turnover had hit Tk 867 crore on September 17 this year.
Former chief research officer of BRAC EPL Investment Ltd Debabrata Kumar said, “The rise in the index may fall due to the increase in the share prices of listed companies. But if the index increases but the transactions do not, then it is not good for the market.
“Only if the transactions increase, can it be said that there is new investment in the capital market, which is a positive sign.”
The election season is naturally fraught with volatility. Not only the capital market, but the entire economy is disrupted. Even in such a situation, the rise of the index along with the increase in capital market transactions will encourage investors to make new investments.
The DSEX, prime index of the DSE, went down by 1 point to close 6,262 against 6,263 in the previous trading session.
The DS30 Index, which consists of blue-chips, fell 5.23 points to 2,105 and the DSES index, which represents Shariah-based companies, dropped 1.70 points to finish at 1,363.
Despite the indices opening higher on investor optimism riding on the recent approval of the second tranche of the IMF loan, the momentum could not be sustained as risk-averse investors perceived it as an opportunity to realise their short-term gains due to uncertainty regarding the market momentum, said EBL Securities, a stockbroker, in its daily market review.
However, investors' concentration has somewhat shifted towards insurance stocks owing to positive expectations from the central bank’s nod for the commencement of bancassurance business yesterday, EBL added to the note.
On the sectoral front, pharma increased 16.2 per cent, exerting the highest turnover, followed by increased general insurance 15.9 per cent, and engineering 14.7 per cent stocks.
Most of the sectors displayed mixed returns, out of which general insurance 3 per cent, jute 0.9 per cent and life insurance 0.9 per cent exhibited the most positive returns on the bourse on Wednesday.
Meanwhile, travel decreased 3.4 per cent, ceramic 1.3 per cent, and paper 1.3 per cent exerted the most correction.
Out of the 392 issues traded, 80 advanced, 94 declined and 218 remained unchanged. The port city bourse, CSE, also settled on green terrain. The selected indices (CSCX) and All Share Price Index (CASPI) inched down by 1.9 and 3.6 points respectively.
