Junk stocks have continued their bull run and maintained their dominance on the gainers' list riding on rumours that they will advance the most amid the market's upward movement.
These stocks have skyrocketed in the last few months, even prompting the regulators to take a move to find out the reasons behind their rise. Still, they are climbing.
Of the top 10 gainers on Dhaka Stock Exchange (DSE) yesterday, six companies were from the “z” category.
Savar Refractories was the top gainer increasing 9.99 percent. In fact, there was no seller of the stock during most of the trading time.
Other junk stocks such as Meghna Pet rose 9.83 percent, Information Services Network 9.78 percent, Bangladesh Welding 9.77 percent, Emerald Oil 9.69 percent and Bangladesh Industrial Finance Company 9.68 percent.
“This is a disturbing factor as junk stocks are rising the most,” said Faruq Ahmed Siddiqi, a former chairman of the Bangladesh Securities and Exchange Commission.
“It shows gambling is continuing and investors are interested to pour money in these stocks as these give them quick profit,” he said, urging investors to be careful about their investment in junk stocks as they are very risky.
The stocks closed broadly higher yesterday on the back of a largely peaceful parliamentary elections, which lifted a cloud of uncertainty that had been weighing in on the market.
The DSEX, the benchmark index of the DSE, hit a four-month high. Led by gains by LafargeHolcim Bangladesh, Beximco Pharma and Beximco, the index gained 94.03 points to end the day at 5,590.47.
The DSEX rose 372.46 points in the last 10 days.
Yesterday, Saiham Cotton dominated the turnover chart with 1.22 crore shares worth Tk 33.31 crore changing hands, followed by Beximco, BBS Cables, Paramount Textiles and United Power Generation.
Chittagong stocks also rose with the bourse's benchmark index, the CSCX, advancing 173.46 points, or 1.70 percent, to finish at 10,367.63.
Gainers beat losers as 237 securities advanced and 26 declined, while 12 finished unchanged on Chittagong Stock Exchange. The port city bourse traded 1.85 crore shares and mutual fund units worth Tk 32.72 crore.