Dhaka stocks continued to surge in the past week as investors kept buying shares amid enthusiasm over the recent Bangladesh Bank move to allow formation of a special fund.
DSEX, the key index of the Dhaka Stock Exchange, soared by 3.69 per cent or 168.53 points, to close at 4,733.14 points on the last trading session in the past week on Thursday, after gaining 111.65 points in the week before.
In line with the week before, the core index started the past week with a 170point gain on February 16 and remained afloat for another two sessions as the investors continued the buying spree on enthusiasm over the central bank announcing the new facility for the stock market.
The DSEX, however, lost in two other sessions of the week as the investors went for profit-taking share sales after the rally.
As part of the government’s recent initiatives to stabilise the stock market, the Bangladesh Bank on February 10 issued a circular allowing each scheduled bank to borrow up to Tk 200 crore from it at low interest rate to invest in the stock market.
As a result, the index gained 280 points in the last two weeks.
The investors expected that the banks and market intermediaries would accept the fund to invest in the capital market as share prices of most of the companies were trading at very lucrative levels after the recent market turmoil, market operators said.
Therefore, the daily average turnover, an indicator of the investors’ participation on the trading floor, climbed to Tk 904.34 crore last week compared with that of Tk 519.30 crore in the week before.
In addition, the banks started to cut deposit rates to around 6 per cent to implement the government’s decision of bringing down the interest rate to a single digit that might divert funds to the stock market.
Share prices of Grameenphone, the largest capitalised company on the DSE, shot up by 14.2 per cent over the week after a significant fall in its shares price over an audit dispute.
Beside GP, the share prices of Square Pharmaceuticals, United Power Generation Company and BSRM advanced over the week that had muscled in the rally.
EBL Securities in its weekly market commentary said, ‘DSEX, the broad-based index of Dhaka bourse, buoyed as the investors were cheered throughout the week after news of the special fund declaration to support the capital market from the Bangladesh Bank and ADB’s loan to the BSEC for regulatory improvements.’
Average share prices of telecommunication soared by 15.4 per cent, engineering by 9.3 per cent, pharmaceuticals by 3.7 per cent, energy by 3.3 per cent and banks by 1.7 per cent in the past the week.
Out of the total 358 shares traded in the past week, the prices of 242 advanced, 91 declined and 25 remained unchanged.
DS30, the blue-chip index of the DSE, jumped by 3.66 per cent, or 56.17 points, and closed at 1,592.80 points.
Shariah index of the bourse DSES added 4.21 per cent, or 43.99 points, in the past week causing it to close at 1,089.81 points.
LafargeHolcim Bangladesh led the turnover chart with shares worth Tk 131.02 crore traded last week.
Khulna Power Company, Summit Power, Orion Pharmaceuticals, Grameenphone, Golden Harvest Agro Industries, Bangladesh Export Import Company, Indo-Bangla Pharmaceuticals, Orion Infusion and ADN Telecom were the other turnover leaders.
MI Cement Factory outperformed others last week with a surge in share prices by 40.2 per cent while Standard Ceramic Industries performed the worst with a decline in share prices by 13.08 per cent.