Stocks rise after 26-day flat trading

Staff Correspondent | Published: 22:37, Jul 08,2020

 
 

Dhaka stocks on Wednesday made notable gains after remaining flat for 26 days as a section of investors increased share buying at the lowest possible prices under the BSEC-imposed floor price system while the others remained worried over the coronavirus pandemic situation in the country.

DSEX, the key index of the Dhaka Stock Exchange, advanced by 0.82 per cent, or 32.83 points, to close at 4,034.65 points on the day.

The DSEX gained 53.11 points in the last three trading sessions.

Trading on the bourse started as per its normal schedule at 10:30am and continued till 2:30pm on Wednesday. The DSE on the day returned to its normal trading hours instead of 10:00am-1:00pm set by the bourse due to the COVID-19 outbreak in the country.

A section of investors continued bargain hunting as share prices of more than two-thirds of the companies hit the lowest ceiling on price fall, a restriction imposed by the Bangladesh Securities and Exchange Commission on March 19 to check free fall on the market amid the pandemic, market operators said.

They said that investors mainly focused on companies in the insurance and bank sectors on Wednesday.

The media reported on Monday that the BSEC asked 61 directors of 22 companies to comply with 2 per cent minimum shareholding rules. Of the directors, 49 were from 14 insurance companies.

There are some more non-compliant directors in the insurance sector, who would also be asked soon to comply with the rules.

Investors were taking position on these scrips on expectations that non-compliant directors of these companies would start buying shares to comply with the BSEC’s instruction, market operators said.

Out of the 46 traded insurance companies, 34 advanced, three declined, nine remained unchanged.

Besides, the media also reported that 14 banks formed special funds worth Tk 1,700 crore to invest in the market that might also encourage some investors to buy shares of banks, market operators said.

The BSEC asked 34 banks to submit reports about formation of special funds and their investment in the market.

Share prices of 15 out of 30 banks were hovering at Tk 10 that might also provoke some investors to buy bank shares.

Besides, the Bangladesh Bank in a circular issued on Tuesday eased its foreign investment policy further, allowing foreign investors to deposit their dividend incomes earned against earlier investments to their foreign currency (FC) accounts.

The investors would also be allowed to invest the balance in the FC accounts for purchasing securities.

The news might encourage some investors, though market analysts were sceptical about the reinvestment of FDI in the stock market.

Wednesday’s gain was highest after May 31, the day of reopening of trading after a 66-day recess due to a pandemic-induced shutdown.  On May 31, the index gained 52.16 points.

The market, however, had failed to keep momentum after May 31 as the pandemic situation worsened in the country.

The worsening COVID-19 situation and the regulator-enforced floor mechanism had brought the market to a standstill as the index had been hovering at 3,960 points since June 2.

After watching some positive movements in the last few sessions, some investors also joined the rally on Wednesday to invest in the market, market operators said.

But most of the investors remained cautious about the coronavirus situation in the country and its possible impact on the economy, they said.

The death toll from the deadly virus rose to 2,197 and the number of total cases of infection stood at 1,72,134 on Wednesday.

Of the 312 scrips traded on the DSE on Wednesday, 101 advanced, 23 declined, and 218 remained unchanged.

The turnover on the bourse advanced to Tk 231.05 crore on Wednesday compared with that of Tk 138.56 crore in the previous trading session.

DSE blue-chip index DS30 added 0.81 per cent, or 11.02 points, to close at 1,357.5 points on the day.

The DSES index also gained 0.51 per cent, or 4.79 points, to settle at 928.63 points.

Beximco Pharmaceuticals led the turnover chart with its shares worth Tk 17.09 crore changing hands on the day.

Bangladesh Export Import Company, Beacon Pharmaceuticals, Premier Bank, Orion Pharmaceuticals, Orion Infusions, Indo-Bangla Pharmaceuticals, Bangladesh

Submarine Cables Company, Exim Bank and Wata Chemicals were the other turnover leaders.

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