Stocks gain for 2nd day as ABB urges BB not to cut ADR

Staff Correspondent | Published: 00:05, Jan 22,2018

 
 

Dhaka stocks increased for the second day on Sunday as a section of investors went on a purchasing spree during a gloomy session with an expectation of better outlook in the market following the request of Association of Bankers Bangladesh to the central bank not to shrink banks advanced deposit ratio.
DSEX, the key index of Dhaka Stock Exchange, gained 0.40 per cent, or 24.96 points, to close at 6,147.19 points, after increasing 23.49 points in the previous session.
In line with the previous session, the market began with a positive momentum, gaining 34 points at one point of the day and remained positive for the whole session as a section of investors continued on their buying binge with an expectation of better prospect in the market surrounding an appeal of ABB to the central bank, market operators said.
The media reported on Sunday that ABB, an organisation of banks chief executives, made a request to the Bangladesh Bank governor Fazle Kabir to back down from their recent move of cutting advanced deposit ratio of banks.
They expressed concern that the ceiling of ADR might increase inflation and interest rates during the election year.
They also said that cutting the ADR ratio might create liquidity crisis in the financial market that will hamper development activities of the government ahead of election.
On January 3, BB deputy governor SK Sur Chowdhury said that the ADR would likely come down to 85 per cent for the Islamic banks from the existing 90 per cent and for other banks to 80 per cent from 85 per cent to check their aggressive lending.
As a result, a section of investors expected that BB may backtrack from their decision of cutting banks ADR ratio leading to a gloomy situation in the capital market.
Moreover, some investors went on share purchase spree with an expectation of better financial disclosures for the last year.
As a result, share prices of all the large capitalised sectors increased on the day.
Average share prices of telecommunication, pharmaceuticals, cement and bank gained 0.9 per cent, 0.7 per cent, 0.4 per cent and 0.1 per cent respectively that kept the market afloat on the day, they said.
Among the prominent scripts, share prices of Beximco Pharmaceuticals, Square Pharmaceuticals and Grameenphone were the highest gainers of the day.
They, however, said that many investors still remained cautious as they awaited central bank’s monetary policy announcement for the second half of the financial year 2017-18.
The turnover at the bourse, however, declined further to Tk 344.35 crore on the day from that of Tk 358.96 crore in the previous session.
Of the 335 companies and mutual funds traded, 168 advanced, 113 declined and 54 remained unchanged.
DS30, the blue-chip index of the DSE, also advanced 0.86 per cent, or 19.46 points, to finish at 2,260.58 points.
Shariah index DSES added 0.43 per cent, 6.09 points, to close at 1,410.00 points.
Square Pharmaceuticals led the turnover chart on the day with its shares worth Tk 28.33 crore changing hands.
IFAD Autos, National Bank, Grameenphone, Golden Harvest Agro Industries, Deshbandhu Polymer, BD Thai, Western Marine Shipyard, Paramount Textile and National Tubes were the other turnover leaders.
Eastern Cables increased most with a 6.76-per cent rise in its share prices, while Meghna Condensed Milk Industries was the worst loser, shedding 4.56 per cent. 

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