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Stocks gain for 2nd day but NBFIs take beating

Staff Correspondent | Published: 22:41, Feb 25,2021

 
 

Dhaka stocks on Thursday advanced for the second day as a section of investors continued buying shares after the recent plunge but share prices of non-bank financial institutions took a nosedive on the day following the imposition of restrictions by the Bangladesh Bank on dividend declarations by weak NBFIs.

DSEX, the key index of the Dhaka Stock Exchange, advanced by 0.57 per cent, or 30.74 points, to close at 5,416.39 points on Thursday after gaining 67.92 points in the previous session.

Before the two-day gain, the DSEX had lost 127.5 points in five sessions.

After a slight fall at the beginning of Thursday’s session, the key index began to rise and maintained the momentum until the end of the session as a section of investors continued bargain hunting, market operators said.

They said that investors, especially institutional ones, moved to buy shares.

Share prices of most of the companies declined in the recent rout that provoked a section of investors to buy shares at lucrative prices and discouraged others not to sell shares at lower prices, they said.

Share prices of the NBFI sector plunged by 1.5 per cent on Thursday as the Bangladesh Bank on Wednesday issued a circular that the NBFIs which have classified loan ratio more than 10 per cent and capital adequacy ratio below 10 per cent will not be allowed to declare any dividend.

Turnover on the DSE advanced to Tk 746.02 crore on Thursday compared with that of Tk 530.35 crore in the previous session.

Share prices of around 90 companies have remained stuck in their floor prices.

The Bangladesh Securities and Exchange Commission on March 19, 2020 introduced the floor price system to bar companies’ share prices from falling below a certain level amid the COVID-19 outbreak.

The market has been in the doldrums for more than a month due to various reasons, including the setting of ceiling on margin loan rate, approval of a number of companies’ initial public offerings in a short period of time, dependence on a few companies and repeated changes in regulatory policies.

Share prices of eGeneration Limited, which made its debut on Tuesday, shot up by the maximum limit allowed for the third day on Thursday to close at Tk 24.7 a share.

EBL Securities in its daily market commentary said, ‘The market was a bit subdued in early session but bargain hunters were active on sector-wise issues ahead of dividend declarations by December-end companies.’

‘NBFIs took a heavy beating on the bourse as the BB fixed a set of criteria for declaring dividends to barred weak companies in dividend disbursement, aiming to strengthen the capital base of the companies,’ it said.

Average share prices of general insurance, energy, pharmaceutical and bank sectors advanced by 3.1 per cent, 1.7 per cent, 0.5 per cent and 0.48 per cent respectively.

Of the 339 scrips traded on the DSE on Thursday, 168 advanced, 63 declined and 115 remained unchanged.

DS30, a composition of 30 large capitalised companies, advanced by 0.45 per cent, or 9.42 points, to close at 2,065.8 points on the day.

Shariah index DSES also added 0.42 per cent, or 5.18 points, to settle at 1,225.87 points.

BEXIMCO led the turnover chart with its shares worth Tk 124 crore changing hands.

Robi, LankaBangla Finance, British American Tobacco, Summit Power, LafargeHolcim Bangladesh, Orion Pharmaceuticals, Beximco Pharmaceuticals, Square Pharmaceuticals and Walton Hi-Tech Industries were the other turnover leaders on the day.

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