Dhaka stocks hit the roof as PM moves to stabilise market

Staff Correspondent | Published: 21:56, Jan 19,2020

 
 

Dhaka stocks skyrocketed on Sunday with the key index posting the highest single-day gain as investors went for buying shares heavily following a number of the government moves to stabilise the ailing market.

DSEX, the key index of the Dhaka Stock Exchange, soared by 5.59 per cent, or 232.23 points, to close at 4,382.06 points on Sunday, stretching the gaining streak to the third day after the index had hit a 56-month low on January 14.

Sunday’s gain was the highest since the DSEX’s launch in 2013 following the 2010-2011 market crash.

Market operators said investors were buoyed by a number of initiatives taken by the government and the Bangladesh Bank to stabilise the volatile market.

The DSEX gained 345.58 points in the last three consecutive sessions after losing 336 points in seven sessions with only one positive day.

The key index started flying from the very beginning of Sunday’s session and climbed more firmly as the session progressed as investors went for injecting funds amid news that prime minister Sheikh Hasina held meeting with senior government officials to discuss ways to stabilise the market.

The soaring start helped most of the investors shake off panic and refrain themselves from selling shares, said market operators.

Out of the 356 scrips traded on Sunday, 346 advanced, just six declined and four remained unchanged.

A meeting of policymakers in presence of the prime minister at the Prime Minister’s Office on January 16 discussed ways to solve prolonged turmoil on the country’s capital market and made 6-point suggestions.

The meeting discussed that the investment of banks and non-bank financial institutions could be increased on the capital market and investment capacity of state-run Investment Corporation of Bangladesh could be enhanced to mitigate liquidity problem on the market.

Merchant bankers and institutional investors could be given loan facilities on easy terms.

The senior government officials may take initiatives to enlist on the stock market good companies including multinational and government-owned companies.

A couple of members of parliament on January 15 criticised the government over the plunge on the stock market saying that the market seriously lacked system of governance.

Besides, BB governor Fazle Kabir on January 14 said that the central bank would extend whatever support it needed to stabilise the stock market while financial institution division senior secretary Ashadul Islam at a meeting on the same day said that the ministry had asked four state-run banks to invest in the capital market.

Top brasses of four state-run banks at a meeting held on January 16 at the board room of Sonali Bank head office in Dhaka emphasised an increase in investment on the capital market and also instructed the officials to take necessary steps in this regard.

Former Bangladesh Securities and Exchange Commission chairman Faruque Ahmed Siddique told New Age that the government’s recent moves soothed investors.

He said that there was no reason for continued plunges and astronomical rises in share prices.

If liquidity is not injected in the market, it would be hard to keep the market afloat, he said.

The market has been in the doldrums for the last 11 months and on December 14 the DSEX hit a 56-month low amid lack of investors’ confidence in the market amid the government’s apathy towards the market, market operators said.

The share prices of British American Tobacco, Grameenphone and City bank surged by the maximum possible mark on Sunday that fuelled the market rise.

There was a rumour on the market that GP would pay the Bangladesh Telecommunication Regulatory Commission Tk 2,000 crore out of the regulator’s audit claim as per the Appellate Division order following appointment of Bangladeshi chief executive officer Yasir Azman.

Market operators said that they could not substantiate the authenticity of the rumour.

When asked about the rumour, GP external communications head Md Hasan said, ‘We cannot comment on any speculation. We have received the order from the Appellate Division and reserve our comment for the moment. The existing stay order issued by the High Court Division remains active and continues to restrain the BTRC from taking actions based on the incorrect audit report.’

The share prices of Square Pharmaceuticals soared by 8.69 per cent after two of its directors declared to buy 6 lakh shares in total.

The turnover on the DSE advanced to Tk 411.36 crore on Sunday from Tk 267.49 crore in the previous trading session.

DSE blue-chip index DS30 jumped by 5.73 per cent, or 80.65 points, to close at 1,487.25 points.

Shariah index DSES added 6.09 per cent, or 57.29 points, to end at 997.58 points.

Square Pharmaceuticals led the turnover chart with its shares worth Tk 19.14 crore changing hands on the day.

Singer Bangladesh, LafargeHolcim Bangladesh, Khulna Power Company, SS Steel, Grameenphone, ADN Telecommunication, NCC Bank, Ring Shine Textiles and Bank Asia were the other turnover leaders.

Beximco Pharmaceuticals gained the most on the day with a 10-per cent increase in its share prices while SS Steel performed the worst, losing 7.5 per cent.

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