Stocks bounce back on optimism

Bangladesh stocks bounced back yesterday following Tuesday's big sell-off after a statement came from the Bangladesh Securities and Exchange Commission (BSEC) on the outcome of its meeting with Bangladesh Bank.

The DSEX, the benchmark index of Dhaka Stock Exchange (DSE), soared 143 points, or 2.14 per cent, to 6,847 following its 92 point decline the previous day.

Stock market analysts said the market rose due to hopes prevailing among investors of banks and non-bank financial institutions increasing their participation as some issues of dispute had been solved in the meeting held at the central bank on Tuesday.

After the meeting, BSEC Commissioner Shamsuddin Ahmed said Bangladesh Bank had agreed to consider the market exposure of banks and NBFIs based on the cost value of their investments in the stock market instead of the market value of the shares.

"The BB had also agreed to allow the lenders to exclude their bond investment from the calculation of the exposure," he said.

The central bank will allow banks and non-bank financial institutions to channel the undistributed dividends into the stock market stabilisation fund, the commissioner informed.

Turnover of the DSE, however, fell 3 per cent to Tk 1,102 crore. At the premier bourse, 293 stocks advanced, 45 declined and 35 remained unchanged.

The Dhaka bourse rebounded to the green as investors were making fresh bets on select stocks amidst the prevalence of optimism, said International Leasing Securities in its daily market review.

On Tuesday's meeting, two regulatory authorities, the BSEC and BB, agreed upon some prudent measures to boost up stocks, which motivated investors to make new investments in sector-specific lucrative stocks, it said.

Investors' activity was mostly centered on bank (30.8 per cent), pharmaceuticals (14.3 per cent) and miscellaneous (12.7 per cent).

A top official of a stock broker said a higher private sector credit growth and the central bank's decision not to mop up money in order to ease liquidity gave a boost to investors' confidence.

Such activities indicate that liquidity in the money market will be eased and it will impact the stock market positively, he added.

Private sector credit growth in Bangladesh accelerated to 9.44 per cent in October, the highest in 13 months as the economy is running in full swing, shaking off the pandemic's fallouts, according to the central bank data.

Index Agro Industries topped the gainers' list, rising 9.91 per cent, followed by Sena Kalyan Insurance Company, Beximco, Envoy Textiles and First Security Islami Bank.

Stocks of Beximco were traded the most, worth Tk 122 crore, followed by ONE Bank, First Security Islami Bank, Delta Life Insurance Company and Acme Pesticides.

Tung Hai Knitting and Dyeing shed the most, dropping 11.7 per cent, followed by Aramit Cement, Dacca Dyeing, ONE Bank and Mithun Knitting & Dyeing.

Chittagong Stock Exchange also soared yesterday. The CASPI, the main index of the port city bourse rose 383 points, or 1.95 per cent, to 19,998.

Among 269 stocks to undergo trade, 198 rose, 46 fell and 25 remained the same.