Dhaka stocks gained for the second day on Wednesday as a section of investors continued buying shares but around 85 companies hit BSEC-introduced floor prices on the day due to current sluggishness on the market.
DSEX, the key index of the Dhaka Stock Exchange, gained 0.59 per cent, or 28.68 points, to close at 4,861.87 points on Wednesday after gaining 15.49 points in the previous session.
Before the two-day gain, the DSEX lost 85.86 points in the previous four sessions.
The key index started gaining from the very beginning of Wednesday’s session and maintained the momentum until the end of the session as investors continued buying shares, market operators said.
They said that some investors went for bargain hunting after share prices of many companies declined.
Besides, share prices of around 85 companies were stuck at their floor prices and investors could not sell shares of the companies that also supported the market to remain afloat, they said.
The Bangladesh Securities and Exchange Commission on March 19 introduced the floor price mechanism to check free fall on the market amid the COVID-19 outbreak in the country.
Trading value of more than 100 companies was below Tk 10 lakh each while shares of 30 companies were not traded on Wednesday, showing worsening situation on the market.
EBL Securities in its daily market commentary said, ‘Investors have taken a conservative approach in fear of an obscure future since the COVID-19 infections in the past few days observed a rising trend.
‘However, BSEC’s move to create a special fund with the investors’ unclaimed shares and cash might soar up liquidity on the country’s capital market in the coming days,’ it said.
The continued domination of the mutual funds and insurance companies became a hurdle for better companies as more investors rushed to the sectors selling off other companies’ shares, market operators said.
The mutual fund sector faced correction on Wednesday, losing 3.97 per cent after a surge in the previous two sessions while the general insurance bounced back strongly, gaining 5.42 per cent on the day.
The general insurance sector logged 38 per cent and the mutual fund sector 15 per cent of the day’s total turnover.
The average share prices of telecommunication, non-bank financial institution and bank sectors advanced by 0.77 per cent, 0.7 per cent and 0.42 per cent respectively.
The market has recently been grappling with the dominance of only two sectors, overflow of initial public offerings, poor corporate declaration, adjustment of bonus shares and concerns over looming second wave of coronavirus outbreak.
Of the 357 scrips traded on the DSE on Wednesday, 109 declined, 142 advanced and 91 remained unchanged.
The turnover on the DSE dropped to Tk 602.74 crore compared with that of Tk 671.03 crore in the previous session.
DSE blue-chip index DS30 also added 0.43 per cent, or 7.23 points, to close at 1,681.94 points on the day.
Shariah index DSES also increased by 0.4 per cent, 4.41 points, to settle at 1,117.24 points.
Nitol Insurance led the turnover chart with its shares worth Tk 24.85 crore changing hands on the day.
Continental Insurance, Pioneer Insurance, Northern Islami Insurance, Asia Pacific Insurance, AND Telecom, Reliance Insurance, BD Finance, National Feed Mills and Quashem Industries were the other turnover leaders on the day.
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