Buying spree lifts stocks

The Dhaka stocks rose 0.74 percent yesterday thanks to a buying spree for undervalued shares.

DSEX, the benchmark index of the premier bourse, gained 39.90 points before finishing the day at 5,384.87.

The buying spree indicates that the investors have started restoring their confidence in the capital market after the announcement of the proposed budget, EBL Securities said in its daily market analysis.

“But the concern remained regarding the depreciation of the taka against the US dollar and looming political uncertainties ahead of the December national election,” the stockbroker said.

The share price of many good companies is undervalued now, which has prompted big and foreign investors to be active in the market, the managing director of a leading merchant bank said requesting anonymity.

The finance minister's proposal to cut corporate tax for listed banks, financial institutions and insurance companies has encouraged many to invest in these companies' shares, he said.

The Bangladesh Association of Bankers (BAB) has taken a decision to cut the interest rate for lending to a single digit from the next month, which may boost the capital market, industry insiders said.

Turnover, another important indicator of the market, also jumped 6.48 percent to Tk 676.97 crore, with 13.17 crore shares and mutual fund units changing hands on the DSE.

Of the traded issues, 204 advanced, 90 declined and 43 closed unchanged on the premier bourse.

Alif Industries dominated the turnover chart with 27.64 lakh shares worth Tk 30.11 crore changing hands, followed by Khulna Power, Western Marine Shipyard, Navana CNG and United Power Generation.

Among the major sectors, the financial institutions increased 1.91 percent, followed by engineering that rose 1.31 percent, fuel and power 1.07 percent and the mutual funds 0.59 percent.

Conversely, the paper and printing and the jute sectors declined 1.25 percent and 0.38 percent respectively. Fu-Wang Foods was the day's best performer with 10 percent gain, followed by Usmania Glass, Atlas Bangladesh, Zahintex industries and Apex Spinning.

Popular Life Insurance was the worst loser, shedding 8.41 percent followed by Zeal Bangla Sugar Mills, Peoples Insurance, Shympur Sugar Mills and KDS Accessories. Chittagong stocks also rose yesterday with the bourse's benchmark index, CSCX, increasing 74.25 points or 0.71 percent to finish the day at 10,042.388.

Gainers beat losers as 159 advanced, 58 declined and 17 finished unchanged on the Chittagong Stock Exchange. The port city bourse traded 64.98 lakh shares and mutual fund units worth Tk 19.83 crore in turnover.