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DSEX soars to 16-month high, daily turnover exceeds Tk1,850cr

Staff Correspondent
11 Feb 2024 20:08:13 | Update: 11 Feb 2024 21:32:06
DSEX soars to 16-month high, daily turnover exceeds Tk1,850cr

DSEX, the key index of the Dhaka Stock Exchange (DSE), soared by 73.7 points or 1.16 per cent and climbed to a 16-month high of 6,447 points as optimistic investors perceived lucrative investment opportunities in the market.

The Dhaka bourse observed strong resilience, with the key index extending its upward trend for ten consecutive sessions owing to heightened optimism and increased market participation across the trading board, as optimistic investors perceived lucrative investment opportunities.

Meanwhile, the market turnover remained above the Tk 1,800 crore-mark, slightly decreasing by 0.3 per cent to Tk 1,852.5 crore, against Tk 1,857 crore recorded in the previous session.

Blue-chip index DS30 and Shariah-based index DSES closed at 2,159.92 and 1,398.06 points, respectively. Large-cap sectors posted a mixed performance on Sunday.

The market remained upbeat throughout the session, riding mainly on investors’ continued interest in the giant bank sector owing to positive expectations from the upcoming year-end declarations, EBL Securities said in its daily market review.

Out of the 394 issues traded, 163 advanced, 195 declined, and 36 remained unchanged at the Dhaka bourse.

The bank booked the highest gain of 4.29 per cent. Block trades contributed 2 per cent of the overall market turnover. Fortune Shoes Ltd was the most traded share, with a turnover of Tk 65 crore.

On the sectoral front, Pharma – which increased by 18.4 per cent – exerted the highest turnover, followed by Bank by 14.6 per cent and engineering by 10.8 per cent.

Sectors displayed mixed returns, out of which Bank by 4.3 per cent, Travel by 4.3 per cent and financial institutions by 3.9 per cent exhibited the most positive returns on the bourse, while ceramics by 2.1 per cent, engineering by 1.4 per cent and services by 0.9 per cent exerted the most correction.

The port city bourse, the Chittagong Stock Exchange (CSE), also settled on green terrain. The selected indices (CSCX) and All Share Price Index (CASPI) advanced by 186.8 and 309.3 points respectively.

Dhaka bourse’s daily turnover crossed Tk 1,800 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 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.