DSE market cap hits record high
Stock indices reached a new level yesterday as market capitalisation of the country's bourses hit an all-time high.
Market capitalisation of the Dhaka Stock Exchange (DSE) rose 2.32 per cent to Tk 501,709 crore while a similar trend was witnessed at the port city bourse, where it grew 2.6 per cent to hit Tk 426,923 crore.
"Some reforms initiated by the Bangladesh Securities and Exchange Commission (BSEC) to ensure accountability gave the investors their confidence back," said Asif Ibrahim, chairman of the Chittagong Stock Exchange (CSE).
The BSEC took some radical decisions soon after the new commission was appointed.
These include quick approvals for some initial public offerings, imposing hefty fines on stock gamblers, ensuring minimum shareholding by company sponsors, scanning junk stocks and so on.
The inclusion of Robi Axiata, a multinational telecom company, helped increase investor confidence as well, said Ibrahim, also a former president of the Dhaka Chamber of Commerce and Industry.
"We need to cash in on the bullish market and build on it to make the market vibrant in the long run," he added.
Ibrahim urged for only well-performing and multinational companies to be considered for the market.
"Non-equity based products like Sukuk need to be included in the market," he said, adding that the BSEC needs to keep up its solid surveillance.
DSEX, the benchmark index of the DSE, rose 139 points, or 2.41 per cent, to 5,909 yesterday.
Meanwhile, the CSE's general index, CASPI, went up 422 points, or 2.51 per cent, to 17,219.
As a number of new companies were listed with the bourses in the last few months, market capitalisation rose, said Sharif Anwar Hossain, president of the DSE Brokers' Association.
Newly listed Robi's market capitalisation was Tk 33,418 crore yesterday, according to DSE data.
However, the confidence-backed value increase for certain stocks was also a reason behind the boom in market capitalisation, he said. "Now investors should be careful because if they lose money then the market will be impacted in the long run," said Hossain, also managing director of Sahidullah Securities.
Investors got a lesson in 1996 and 2010, and so if they invest considering companies' performance then they will at least get dividends when share prices fall, he said.
"The index will not rise every day so the basics of investment should be followed, thus benefitting both investors and the market," he added.
Still, junk and low-performing stocks are rising, which is a trap for general investors so the regulator should investigate and stop the gambling otherwise investors will lose money, according to a top official of a merchant bank.
"If investors lose their funds here, then they will be frustrated for their wrong decision so the gambling should be kept in check through surveillance," he added.
Ali Xahangir, CEO of Amarstock, a share market analysis-based website, said that with money having become cheaper in the banking sector, the stock market is on the rise as confidence has returned among investors.
"The index could rise further since many stocks are still lucrative but some are overvalued too. So investors should be cautious," he added.
Turnover, an important indicator of the stock market, fell 1.8 per cent to Tk 2,070 crore at the DSE yesterday.
Among the 364 stocks traded at the DSE, 159 advanced, 133 dropped and 70 remained the same.
GBB Power topped the gainers' list, rising 10 per cent, followed by Powergrid, Beximco, Midas Financing, and LankaBangla Finance.
Beximco traded the most with Tk 184 crore worth of shares changing hands followed by Beximco Pharmaceuticals, Robi Axiata, Summit Power and LafargeHolcim Bangladesh.
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