Dhaka stocks advanced in the past week, extending the gaining streak to the seventh consecutive week as investors continued buying shares, especially those of insurance companies amid their growing confidence in the market.
DSEX, the key index of the Dhaka Stock Exchange, gained 3.57 per cent, or 150.4 points, to close at 4,364.83 points on August 6, the last trading session of the week.
The DSEX gained 403.89 points in the past seven weeks.
The week was truncated to four trading sessions from usual five sessions due to public holidays for Eid-ul-Azha from July 31 to August 2.
The market recovered Tk 23,219 crore in the market capitalisation during the seven weeks’ gain.
The DSEX did not fall in any session in the last two weeks while declined in just one session in the last three weeks as investors kept buying shares at bargain prices, market operators said.
The insurance sector continued leading the market to the way upward as general insurance and life insurance soared by 9.2 per cent and 4.6 per cent over the week.
General insurance has shot up by 46 per cent since July 2 while life insurance surged by 21.5 per cent during the period till August 6.
Financial sector experts said that that the country’s economy had been reopening gradually and the economic indicators started showing positive movements that ebbed concern among investors to some extent.
They said that the economy was appeared to be saved from a catastrophic impact of coronavirus outbreak that was predicted earlier, and if the spread of virus could be controlled, the economy would continue to bounce back.
The country’s exports in July earned $3.91 billion, the highest-ever earnings in a single month in the country’s history.
Besides, the monthly inflow of remittance reached $2.60 billion in July, hitting an all-time high.
In addition, Bangladesh Bank’s expansionary monetary policy cut bank rate and repo rate by 1 percentage points and 0.5 percentage points respectively to increase fund flow in the financial market
The central bank unveiled the monetary policy for the fiscal year 2020-2021 on July 29.
The rally has started since June 18 when few institutional investors took the initiative to go for share buying at the lowest possible prices under floor price system, market operators said.
The Bangladesh Securities and Exchange Commission has introduced the floor price system to check free fall in share prices amid the pandemic.
Market operators said that more investors joined the rally seeing the improvement in the market situation.
Besides, the new commission took several initiatives to develop the market and punished some wrongdoers that also raised the level of investors’ confidence in the market.
All the sectors except telecommunication advanced over the week.
EBL Securities in its weekly market commentary said, ‘Investors possessed optimistic view after the announcement of new monetary policy as the Bangladesh Bank has decided to cut policy rates and bank rate to improve the liquidity of the money market and also to revive the country’s economy from pandemic fallout.’
Coronavirus killed 3,306 people and infected 2,49,651 others across the country until Thursday.
A section of investors still remain nervous due to the pandemic. Out of the 361 issues traded last week, 260 advanced, 42 declined and 57 remained unchanged.
The daily average turnover on the DSE jumped to Tk 725.97 crore in the past week compared to the turnover of Tk 446.75 crore in the previous week.
The Shariah index of the bourse, DSES, also 3.54 per cent, or 34.61 points, over the week to close at 1,011.11 points.
DS30, the blue-chip index of the DSE, gained 3.89 per cent, or 55.24 points, to finish at 1,475.88 points.
Beximco Pharmaceuticals led the turnover chart with shares worth Tk 116.93 crore changing hands in the past week. Pioneer Insurance Company, Bangladesh Submarine Cable Company, Square Pharmaceuticals, Bangladesh Export Import Company, Grameenphone, Indo-Bangla Pharmaceuticals, LafargeHolcim Bangladesh, VFS Thread Dyeing and Silco Pharmaceuticals, Fine Foods and Sonar Bangla Insurance were the other turnover leaders.
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