Dhaka stocks soar on BSEC’s market makeover move ahead of PM visit

Staff Correspondent | Published: 00:05, Aug 20,2018


Dhaka stocks soared on Sunday, extending the gaining trend to the third day, as investors went for heavy buying of financial scrips amid a speculation that the Bangladesh Securities and Exchange Commission was trying to ‘improve’ the market condition ahead of a scheduled visit of prime minister Sheikh Hasina to the commission.
Despite a fall in the prices of two-thirds of the traded scrips, DSEX, the key index of the Dhaka Stock Exchange, advanced by 1.29 per cent, or 70.76 points, to close at 5,538.50 points on Sunday because of heavy gains of financial scrips.
The DSEX gained 160 points in last three consecutive sessions.
In line with the previous session, the market began with an upbeat momentum that increased sharply in late trading.
The market regulator’s move to suspend the trading of shares of three low-profile companies due to an unusual rise in their share prices and send five more to spot market drove investors towards the financial sector scrips — banks, non-bank financial institutions and insurance companies, said market operators.
A number of investors at brokerage houses at Motijheel in Dhaka told New Age that there was a speculation in the market that the BSEC took the move against eight low-profile companies to give a boost to the market ahead of the PM’s visit to the commission.
Although the share prices of the companies had been rising exorbitantly for months amid heavy criticisms against the BSEC’s inaction, the regulator only took the decision to take measures against the companies on August 16.
Prime minister Sheikh Hasina is scheduled to attend the 25th anniversary ceremony of the BSEC on September 12.
Investors said that there were rumours that the BSEC wanted to show the PM a stable market and only a surge in the prices of financial stocks would give the key index, which has been struggling for weeks, a boost.
As a result, investors rushed to buy the financial sector stocks, the prices of which were also lower because of lack of demand for those amid scams in the sector, ditching other scrips, said market operators.
Investors said that they were hoping further surge in the share prices of financial sector after the Eid-ul-Azha holidays, ahead of the PM’s visit.
Eid-ul-Azha will be celebrated across the country on August 22 and trading at the DSE will remain closed from August 21 to 25 for Eid holidays and weekly holidays.
BSEC executive director and spokesperson Saifur Rahman, however, brushed the investors’ speculation aside, saying ‘It is not the job of the commission to do any mechanism to effect a change in the index.’
Investors should not take decision on the basis of rumours.
NBFIs and banks shot up by 5.4 per cent and 4.4 per cent respectively with strong trading volume.
All the issues of financial sectors advanced except two banks which remained unchanged on Sunday.
Besides the financial scrips, the share prices of cement, pharmaceuticals and food advanced on the day.
Following a BSEC order, the DSE on August 16 suspended Monno Jute Stafflers, Bangladesh Autocars Limited and Legacy Footware and placed Monno Ceramic Industries, Kay & Que, Aziz Pipes, Stylecraft and Dragon Sweater and Spinning on compulsory spot trading.
Of the 337 companies and mutual funds traded, 183 declined, 127 advanced and 23 remained unchanged.
Turnover on the DSE dropped to Tk 560.57 crore on Sunday compared with that of Tk 580.76 crore in the previous trading session.
‘The core index continued flying throughout the session and investors kept buying fresh stocks in the hope of taking position with this upward momentum amid post-Eid optimism,’ said EBL Securities in its daily market commentary.
DS30, the blue-chip index of the DSE, gained 1.29 per cent, or 70.76 points, to close at 1,938.38 points.
Shariah index DSES also added 0.29 per cent, or 3.67 points, to finish at 1,250.57 points.
BBS Cables led the turnover chart with its shares worth Tk 24.48 crore changing hands.
LankaBangla Finance, City Bank, Dhaka Bank, Premier Bank, International Leasing and Financial Services, IFAD Autos, National Bank, BRAC Bank and United Power Generation were the other turnover leaders.
Republic Insurance Company gained the most on the day with a 9.91-per cent increase in its share prices, while Dragon Sweater was the worst loser, shedding 11.64 per cent.

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