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Stocks soar on PM assurance, regulator’s IPO move

Staff Correspondent | Published: 00:00, May 03,2019

 
 

Dhaka stocks soared on Thursday, extending the upward movement to the second day as investors continued buying shares following the prime minister Sheikh Hasina’s assurance regarding the market that remained volatile in recent months.
Market operators said the Bangladesh Securities and Exchange Commission’s decision to halt new initial public offering applications until the related rules were amended to check puny IPOs also encouraged investors.
The key index of Dhaka Stock Exchange, DSEX, gained 1.61 per cent, or 83.89 points, to close at 5,286.75 points on Thursday after gaining 27.38 points on Tuesday.
The market was closed on Wednesday on the occasion of May Day.
The market began to gain from the very beginning on Thursday, the closing day of the week, and climbed more firmly as the session progressed as investors went on bargain hunting with an expectation that the market would turn around following the government moves, market operators said.
They said when the market situation went out of control, prime minister Sheikh Hasina came forward to resolve the crisis after holding meetings with the market regulator and the finance minister.
DSE witnessed a 13-week of free-fall and lost around 750 points that prompted affected investors to take to the streets in a number of days last month.
Sheikh Hasina on Tuesday told parliament, ‘There is no reason to panic. We have been taking measures so that the capital market runs properly.’
‘Those who will manipulate trading activities in the capital market will be brought to book,’ she said.
Market operators said her approach relieved investors from tensions and encouraged them to make fresh investment moves.
On Tuesday evening, finance minister AHM Mustafa Kamal at a programme said, ‘We have heard of the problems prevailing in the stock market. Now, I can ensure you that all the problems must be solved one by one soon.’
He also assured that the government would provide incentives for the capital market in the next national budget.
BSEC on Tuesday postponed receiving any new IPO application until making necessary amendments to the rules to prevent irregularities and corruptions in the area.
The commission also decided that it would no more accept new application from the unlisted companies for the purpose of capital raising, which would diminish the existence of any ‘placement shareholders’.
Investors anticipated that the move would bring discipline to the market, market operators said.
The average share prices of all the sectors advanced on the day.
The share prices of textile, non-bank financial institution, energy and bank advanced by 4.13 per cent, 3.22 per cent, 2.13 per cent and 0.69 per cent respectively.
The market was going through a rough phase due to a number of reasons including liquidity shortage in the country’s financial sector, investors’ distrust in regulators and uncalled-for comments by the finance minister.
Earlier, Kamal said that the government had no control over the stock market now and there were two groups at the country’s stock market — one was lion and the other goat — with the lion prevailing over the goat.
His comments had sparked share sell-offs.
Of the 345 issues traded at DSE on Thursday, 275 advanced, 49 declined and 24 remained unchanged.
The turnover on the bourse increased to Tk 475.29 crore on Thursday from that of Tk 415.17 crore in the previous trading session.
DSE blue-chip index DS30 advanced by 1.29 per cent, or 23.90 points, to close at 1,870.58 points.
Shariah index DSES added 1.64 per cent, or 19.82 points, to finish at 1,224.97 points.
United Power Generation Company led the chart of turnover leaders with its shares worth Tk 27.27 crore changing hands on the day.
Fortune Shoes, Monno Ceramic Industries, Grameenphone, National Polymer, Active Fine Chemical, Generation Next, BDCOM Online, Esquire Knit Composite and National Tubes were the other turnover leaders.
Dhaka Insurance gained the most on the day with a 12.37-per cent increase in its share prices while AB Bank was the worst loser, shedding 8.33 per cent.

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