Dhaka stocks advanced on Monday, extending the gaining streak to the fifth session as investors continued buying shares amid the Bangladesh Bank’s special fund support while a section of investors went for profit taking sales on the day.
DSEX, the key index of Dhaka Stock Exchange, advanced by 0.71 per cent, or 33.98 points, to close at 4,768.13 points on the day, hitting a four-month high.
Monday’s index was the highest after November 12 last year when it was at 4,779.18 points.
The DSEX gained 383 points in the last five sessions, adding Tk 21,417 crore to the DSE market capitalisation.
The core index faced profit booking selling pressure at the beginning of Monday’s session after a significant gain in the previous four sessions.
The index, however, rebounded to end the session with notable gains as investors kept buying shares with expectation of market recovery following a number of stimuli including the BB’s announcement of special fund for the stock market, market operators said.
The central bank on February 10 issued a circular allowing each schedule bank to borrow up to Tk 200 crore from it with low interest rate to invest in the stock market.
Market operators said that as share prices of most of the companies plunged to very lucrative levels, the banks and market intermediaries would invest in the stock market to maximise their profits.
The central bank made the move as the government faced criticisms over the relentless fall in the share prices in 11 consecutive months until January 14, 2020. The bear run eroded 1,900 points of the DSEX.
Moreover, the government on February 13 slashed the interest rate on savings in the post offices by half to facilitate implementation of the single-digit interest rate in the country’s banking sector.
Interest rate on three-year fixed deposit was reduced to 6 per cent from 11.28 per cent on maturity, the media reported.
In addition, banks started cutting deposit rate to around 6 per cent to implement government’s decision of bringing down interest rate to single digit that might divert funds to the stock market.
The turnover on the DSE advanced to Tk 976.38 crore on Monday from Tk 916.25 crore in the previous trading session.
Monday’s turnover on the bourse was the highest since February 3 last year when it was Tk 984.21 crore.
EBL Securities in its daily market commentary said, ‘Investors’ confidence in the stock market appeared to have improved as the benchmark index added 382.58 points after the central bank declared special fund support for the ailing capital market.’
The average share prices of the engineering sector advanced by 1.3 per cent, pharmaceutical by 1.0 per cent, textile by 0.9 per cent and energy by 0.1 per cent.
Share prices of non-bank financial institution and bank dropped by 1.1 per cent and 0.3 per cent respectively amid profit taking.
Out of the 356 scrips traded on Monday, 195 advanced, 128 declined and 32 remained unchanged.
DSE blue-chip index DS30 increased by 0.41 per cent, or 6.68 points, to close at 1,599.00 points.
Shariah index DSES added 0.73 per cent, or 7.95 points, to end at 1,083.69 points.
LafargeHolcim Bangladesh led the turnover chart with its shares worth Tk 37.48 crore changing hands on the day.
Khulna Power Company, Orion Infusion, ADN Telecom, Orion Pharmaceuticals, Bangladesh Export Import Company, Golden Harvest Agro Industries, Western Marine Shipyard, Indo-Bangla Pharmaceuticals and Summit Power were the other turnover leaders.
Rupali Life Insurance gained the most on the day with a 9.95-per cent increase in its share prices while Shyampur Sugar Mills performed the worst, losing 8.38 per cent.
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