Dhaka stocks gained on Thursday, ending a four-day losing spell, in cautious trading as a section of investors went for bargain hunting amid hopes that the market regulator would take steps to revive the market.
DSEX, the key index of Dhaka Stock Exchange, advanced by 0.66 per cent, or 34.75 points, to close at 5,230.78 points on Thursday after losing 79.88 points in the previous four trading sessions.
After a brief gain at the beginning, the market moved downwards but rebounded in late hours as a section of investors went for bargain hunting amid hopes of regulatory measures, market operators said.
Market regulator Bangladesh Securities and Exchange Commission on Thursday held a meeting with Dhaka Stock Exchange, Chittagong Stock Exchange, DSE Brokers’ Association and Bangladesh Merchant Banks Association to prop up the capital market that has remained volatile in recent months, they said.
Market operators said whenever BSEC held a meeting with the stakeholders, the capital market reacted positively to it on that particular day as investors expected positive outcome from such meeting.
Sometimes, BSEC pushes the market intermediaries to inject funds in the capital market so that the price index ends positive, they said.
The media reported that Bangladesh Bank would soon issue directive increasing banks’ investment limit in the capital market. It would also release Tk 856 crore for the small-scale investors affected by the recent market plunge.
The average share prices of almost all the sectors advanced on the day.
The share prices of bank sector advanced by 1.7 per cent, that of non-bank financial institution by 1.0 per cent, that of textile by 0.4 per cent and that of energy by 0.1 per cent.
The turnover on the bourse, however, on Thursday remained below Tk 300 crore for the third consecutive day and below Tk 400 crore for the seventh straight session.
The turnover on bourse increased to Tk 290.68 crore on Thursday from that of Tk 256 crore in the previous session.
Typically the market remains slow during Ramadan, the fasting month for the Muslims, as people’s expenditure rise for Ramadan commodities and Eid shopping and before the announcement of national budget as investors wait to see fiscal measures, they said.
Market experts said that the liquidity crisis in the financial sectors was the main reason for the bearish movement at the market.
If the crisis is not mitigated, it would be hard to revive the market soon as the institutional investors are facing fund shortage, they said.
‘Most of the fundamental stocks were undervalued and value investors showed their buying appetite. The market started with a positive vibe and with little volatility closed positive,’ said EBL Securities Ltd in daily market update.
Out of the 341 issues traded on Thursday, 199 advanced, 89 declined and 51 remained unchanged.
DSE blue-chip index DS30 also gained 0.29 per cent, or 5.38 points, to close at 1,818.20 points.
Shariah index DSES added 0.28 per cent, or 3.34 points, to finish at 1,197.56 points.
BSEC at its meeting with other capital market stakeholders on Thursday decided to make separate trading category for the companies whose sponsor-directors are not complying with the 2 per cent (individually) and 30 per cent (jointly) shareholding rules.
The companies under the separate category would face a number of additional restrictions.
BSEC chairman M Khairul Hossain at the meeting made the announcement.
DSE officials said that the companies under the category would face a number of restrictions including mandatory stock dividend declaration and barring margin loans along with the existing restrictions. The commission may seek suggestions from the merchant banks in this connection.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Stocks