Stocks bounce back riding on banks
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The stock market bounced back in the last three trading days riding on good performance of the listed banks in the third quarter of the current year.
The DSEX, the benchmark index of Dhaka Stock Exchange (DSE), rose 21 points, or 0.44 per cent, to 4,918 yesterday.
It regained 80 points in the last three days after experiencing a 79-point drop in the previous five trading days, according to the DSE data.
Good performance of banks has influenced the investors into going after the bank shares, causing a rise in the index, said a top official of a stock broker.
Most of the banks' earnings rose in the quarter although the investors have been expecting a fall, he said.
Of the 30 listed banks, one witnessed the fall of its stock prices, another saw no change while the rest experienced a rise on the DSE board.
The trend was almost the same the previous day, said the stock broker.
A merchant banker, however, said the rise was normal.
The market may not fall that much now thanks to strong participation of stock investors and their buoyancy, he said.
Though banks are showing higher profits in the third quarter, but it would not be sustainable in the coming years because they might fall victim to bad loans again, said the merchant banker.
Borrowers breathed a sigh of relief for a brief period when the government allowed them to do business without having to clear loan instalments until September this year to ease pressure they had been facing for the Covid-19 outbreak, he said.
But now they are still struggling to repay the loans due to poor business amid the pandemic, he pointed out.
So the banks, which will keep enough provision for their bad loans, will remain unscathed in the coming years, he said.
"But many banks are not keeping the provision appropriately."
Turnover, an important indicator of the stock market, rose 13.63 per cent to Tk 892 crore at the DSE yesterday. Of the traded stocks, 159 advanced, 144 fell and 54 remained unchanged.
Beximco Pharmaceuticals saw the highest Tk 57 crore-worth shares changing hands followed by Asia Pacific Insurance, Global Insurance, Bangladesh National Insurance and Beximco.
Fu-Wang Ceramic Industries topped the gainers' list, rising 15 per cent followed by Bangladesh National Insurance, Yeakin Polymer, Shinepukur Ceramic and Zahintex Industries.
Express Insurance shed the most, falling 12 per cent, followed by Global Insurance, Continental Insurance, EBL NRB Mutual Fund and Takaful Insurance.
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