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Stocks extend rally to 9th day

Insurance scrips surging  

Staff Correspondent | Published: 23:19, Aug 05,2020

 
 

Dhaka stocks gained marginally on Wednesday, extending the gaining streak to the ninth consecutive session as a section of investors continued buying shares, especially those of insurance scrips while others went for profit booking.

DSEX, the key index of the Dhaka Stock Exchange, added 0.18 per cent, or 8.04 points, to close at 4,307.15 points on the day.

The DSEX added 230.40 points in the last nine sessions, the longest rally seen after January last year.

The nine-day surge recovered Tk 15,034 crore in market capitalisation.

In line with the previous session, the market began on a positive note, gaining 28 points within an hour as investors continued buying shares with an expectation that the market would maintain the momentum it had found since the beginning of July, market operators said.

They said that many investors who were on the sidelines returned to the market after observing positive movements on the market.

The key index however finished with a slight gain as some investors went for profit taking after the recent gains, they said.

The gradual reopening of the economic activities coupled with the Bangladesh Bank’s expansionary monetary policy has driving the market movement in recent days.

The central bank unveiled the monetary policy for the fiscal year 2020-2021 on July 29, bringing down the bank rate to 4 per cent from 5 per cent and repo rate from 5.25 per cent to 4.75 per cent to make funds available for banks at a cheaper rate.

The mechanism is expected to enhance fund flow in the financial market.

Besides, the media reported that the monthly inflow of remittance touched $2.60 billion in July, hitting an all-time high in the month.

Moreover, Bangladesh’s exports in July this year fetched $3.91 billion, the highest-ever earnings in a single month in the country’s history.

The insurance companies continued to be the prime attention of investors and most of the companies witnessed more than 40 per cent gain in the last month rally.

Share prices of Paramount Insurance shot by 193 per cent, Eastern Insurance by 173 per cent and Pioneer Insurance by 132 per cent in a month surge.

Share prices of insurance companies have been rising since early July after the Bangladesh Securities and Exchange Commission directed companies’ directors to comply with 2 per cent minimum shareholdings rules, and most of them are from the insurance sector.

Besides, the insurance regulator has taken several steps to reform the sector to revive confidence of the clients.

The average share prices of general insurance, life insurance and bank sectors advanced by 5.1 per cent, 2.6 per cent and 0.7 per cent respectively on Wednesday.

The coronavirus cases continued surging as the death toll from the virus rose to 3,267 and the number of total infections stood at 2,46,674 as on Wednesday, making some investors hesitant about investing in the market.

Of the 344 scrips traded on the DSE on Wednesday, 155 advanced, 123 declined, and 74 remained unchanged.

The turnover on the bourse advanced to Tk 718.34 crore on Wednesday compared with that of Tk 676.65 crore in the previous trading session.

The DSES index, however, dropped by 0.22 per cent, or 2.28 points, to settle at 997.42 points.

DSE blue-chip index DS30 also lost 0.16 per cent, or 2.47 points, to close at 1,452.41 points on the day.

Pioneers Insurance Company led the turnover chart with its shares worth Tk 28.52 crore changing hands on the day.

Bangladesh Submarine Cables Company, Beximco Pharmaceuticals, Bangladesh Export Import Company, Indo-Bangla Pharmaceuticals, Republic Insurance, Sonar Bangla Insurance, Square Pharmaceuticals, Standard Insurance and LafargeHolcim Bangladesh were the other turnover leaders.

BSCCL gained the most on the day with a 10-per cent increase in its share prices while Samata Leather was the worst loser, shedding 5.85 per cent.

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