Stocks finally looking up
Stocks edged up yesterday as the central bank and the capital market regulator’s combined affirmative actions are having their effect on retail investors.
DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), gained 55.95 points, or 1.10 percent, to close at 5,133.25 points. Turnover was 23 percent higher than the previous day at Tk 467.93 crore.
Between June 28 and July 22, the index had lost 463.6 points and investors Tk 27,500 crore as the market reacted violently to the unfavourable measures for the capital market taken in the budget for fiscal 2019-20.
But it seems confidence is slowly returning to the market, said Royal Capital in its market analysis.
The development comes as the Bangladesh Bank and Bangladesh Securities and Exchange Commission worked in tandem all week to prop up the sinking market.
The central bank on Monday verbally asked banks and non-bank financial institutions that have the capacity to invest to support the market. As per its information, 19 lenders have the scope to park Tk 2,000 crore in the market.
Similarly, the capital market regulator asked the DSE to order all stock brokers to ensure that their clients place sell orders in person instead of giving instruction over the phone, making it harder for retail investors to dump their holdings.
Furthermore, on Wednesday, it requested the stock dealers, asset management firms and merchant banks to support the market as much as possible. And it warned the institutional investors that it would be monitoring if they were supporting the market or not.
“All the initiatives seem to have enhanced the confidence of investors,” said Ali Xahangir, chief executive officer of Amarstock, a website that provides technical analysis on market movements.
But keeping the institutional investors under pressure to buy stocks is not a long-term way-out.
“What would truly help the market is if the institutional investors invest in the market based on their own analysis. General investors would draw encouragement from this,” he added. Of the traded issues yesterday, 246 advanced, 71 declined and 35 remained unchanged. United Power Generation topped the turnover chart with its transactions of Tk 24.99 crore, followed by National Life Insurance, Bangladesh Shipping Corporation, Fortune Shoes and Square Pharmaceuticals.
Dacca Dyeing was the day’s best performer with its 10 percent gain, while Bangladesh General Insurance Company was the worst loser with 7.42 percent slide.
Chittagong stocks also rose, with the bourse’s benchmark index, CSCX, increasing 111.96 points, or 1.18 percent, to finish the day at 9,551.51.
Losers beat gainers as 205 declined and 63 advanced, while 15 finished unchanged on the Chittagong Stock Exchange. The port city bourse traded 99.16 lakh shares and mutual fund units worth Tk 28.84 crore.
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