Dhaka stocks on Sunday skyrocketed following the Bangladesh Bank’s decision to increase banks’ investment limit in the capital market by excluding banks’ investments in unlisted securities from their capital market exposure count.
DSEX, the key index of Dhaka Stock Exchange, advanced by 2 per cent, or 104.91 points, to close at 5,335.70 points on Sunday after a 34.75-point rise in the previous trading session.
Market operators said that investors, shaking off jittery over the recent market turbulences, went for heavy buying on Sunday following the BB’s move to boost banks’ stock market investment.
BB in a circular on Thursday said that banks’ investments in unlisted securities (equity share, non-convertible cumulative preference share, non-convertible bond, debenture, open-end mutual fund) would be excluded from the calculation of their total investment (solo and consolidated) in the capital market.
The decision came into effect immediately.
Stock market stakeholders hailed the BB move as it was their long-standing demand.
Market operators said that as per the BB move banks would be free to invest between Tk 10,000 crore and Tk 15,000 crore in the capital market.
They said although they were sceptical about the banks’ ability to inject huge funds in the capital market because of the ongoing liquidity crisis in the financial sector, it was initially a psychological boost for investors and a possibility of banks’ increased investment in the market in long term.
The DSEX started climbing from the beginning of the trading on Sunday as investors went for heavy buying, with the index rising more than 100 points in the first half an hour and ultimately adding more than 100 points in the session.
They turned their focus to the financial scrips — insurance companies, banks and non-bank financial intuitions — because of the financial sector’s increased ability to invest in the market, said market operators.
The prices of almost all the sectors gained on the day with general insurance sector soaring by 4.8 per cent, bank by 3.3 per cent, non-bank financial institution by 2.2 per cent, telecom by 2.2 per cent and textile by 1.5 per cent.
‘The latest BB move has created enthusiasm among investors although a number of steps from the government and the market regulator to boost the confidence of investors fizzled in the previous two weeks,’ said a stockbroker.
He said that they would closely watch the market in the next few days to know whether the upward trend triggered by the BB move would sustain, given the fact that the market was facing the ongoing liquidity crisis and typical pre-budget and Ramadan slowness.
EBL Securities in its daily market update said, ‘The investors continued their buying binge [on Sunday] amid the hype regarding the news of Bangladesh Bank’s market supportive measures widening the banks’ scope of investment in the stock market, which created enthusiasm among investors.’
The turnover on the bourse increased to Tk 443.56 crore on Sunday from Tk 290.68 crore amid active participation from investors.
Out of the 344 issues traded on Sunday, 271 advanced, 45 declined and 28 remained unchanged.
DSE blue-chip index DS30 also gained 1.74 per cent, or 31.64 points, to close at 1,849.85 points.
Shariah index DSES added 1.46 per cent, or 17.56 points, to finish at 1,215.12 points.
Fortune Shoes led the chart of turnover leaders with its shares worth Tk 19.53 crore changing hands on the day.
IFIC Bank, EXIM Bank, SK Trims Ltd, Uttara Bank, Bank Asia, Power Grid, Premier Bank, City
Bank and Indo Bangla Pharma were the other turnover leaders.
SK Trims Ltd gained the most on the day with a 10-per cent increase in its share prices while Savar Refractories Ltd was the worst loser, shedding 5.94 per cent.
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