Stocks bounce back but worries remain

Stocks bounced back yesterday following three days of continuous decline but tensions continue to run high among investors due to the downward trend of the turnover.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), rose 122 points, or 2.27 per cent, to 5,498 yesterday.

Tap here to add The Daily Star as a trusted source

The market took a huge tumble over the last few days so if people sell their shares, they will incur losses, according to a stock broker.

"So, this discourages them to put up sale orders," he said, adding that this caused the market to rise.

Besides, some investors started to buy again but the buying tendency is still comparatively low.

"So, the index rose depending on lower turnover as well," the stock broker said.

Turnover, an important indicator of the market, dropped 13 per cent to Tk 683 crore yesterday.

"The lower turnover is not a good sign for the market," he added.

Two weeks ago, turnover at the DSE ranged from Tk 1,300 crore to Tk 1,500 crore but it has now halved to Tk 700 crore on average, DSE data shows.

"There is nothing in the near future that can drown the index so why the index was falling was not clear to me," a merchant banker said.

Moreover, there is some hope of a reduction in corporate tax for listed companies which could boost the index.

So, investors should not sell their shares at a loss now, the merchant banker said, adding that people should make long-term investments in well-performing companies.

"Bad decision from stock investors intensifies the bearish trend of our market," he said.

Fu-Wang Ceramics topped the gainers' list, rising 10 per cent followed by Mir Akhter Hossain, Dominage Steel, Appollo Ispat and Midas Financing.

Beximco topped the turnover list with shares worth Tk 87 crore changing hands followed by Beximco Pharmaceuticals, Robi Axiata, British American Tobacco Bangladesh, and LankaBangla Finance.

First Finance shed the most, falling 4.83 per cent followed by Prime Bank, Central Insurance, LR Global Mutual Fund One and Desh Garments.

At the DSE, 240 securities gained value, 17 declined, and 92 remained unchanged.

The port city bourse also rose yesterday. CASPI, the general index of the Chattogram Stock Exchange, rose 399 points, or 2.57 per cent, to 16,919.

Among the 237 traded companies, 160 advanced, 28 fell and 49 remained the same.