Dhaka stocks inched up on Wednesday amid cautious trading by investors as they were assessing the impact on the capital market of the facilities the government and central bank had given to banks.
The key index of Dhaka Stock Exchange, DSEX, added 0.04 per cent, or 2.76 points, to close at 5,793.05 points on Wednesday after losing 37.23 points on Tuesday.
Before Tuesday, the key index gained 339 points in the three trading sessions after a prolonged bear run.
DSEX went through a see-saw session, gaining 46 points at one point on Wednesday but ended flat as investors were assessing the damning reactions of economists and banking experts to a series of facilities provided by the government to the financial sector, market operators said.
The Bangladesh Bank on Tuesday cut cash reserve ratio of banks’ by 1 percentage point to 5.5 per cent and repo rate by 0 .75 percentage point to 6 per cent while the government allowed the state-owned agencies to deposit up to 50 per cent of their fund with the private banks from earlier 25 per cent.
The measures for tackling what the government said ‘liquidity crisis’ drew sharp reaction from banking experts and economists who said that such measure would allow more anomalies in embattled banking sector.
They also said that the measures would ultimately result in capital flight from the country in the election year.
The bank owners, who won the facilities after hectic lobbying with the government, also made no promise of interest cut in near future despite getting the facilities, said a stockbroker.
As a result, some investors preferred to take a cautious approach while some other continued with profit taking sales after a three-day rally before Tuesday.
Therefore, the average share prices of cement, bank and non-bank financial institution sectors declined by 1.2 per cent, 0.4 per cent and 0.1 per cent respectively.
Share prices of food, telecommunication and pharmaceuticals sectors, however, increased by 0.3 per cent, 0.12 per cent and 0.1 per cent respectively that kept the market afloat on the day.
The turnover at the bourse declined to Tk 546.68 crore on Thursday compared with that of Tk 555.22 crore in the previous session.
Of the 337 companies and mutual funds traded on Wednesday, 152 declined, 147 declined and 37 remained unchanged.
DS30, the blue-chip index of the DSE, also added 0.05 per cent, or 1.25 points, to finish at 2,167.23 points.
Shariah index DSES, however, lost 0.17 per cent, or 2.37 points, to close at 1,348.45 points.
BRAC Bank led the turnover chart on the day with its shares worth Tk 49.23 crore changing hands.
IFAD Autos, Unique Hotel, Bangladesh Export Import Company, Aamra Networks, Dragon Sweater, Monno Ceramics, Rupali Life Insurance, Zaheen Spinning and LankaBangla Finance were the other turnover leaders.
Rupali Life Insurance gained the most with a 9.97-per cent increase in its share prices, while CAMP IBBL Islamic Mutual Fund was the worst loser, shedding 6.03 per cent.