Stocks hit 3-month high

Dhaka stocks crossed the 5,700-point mark for the first time in three months yesterday with insurance and banking stocks leading the charge.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), soared by 78 points, or 1.39 per cent, to hit 5,724.36.

Among all listed sectors, insurance and banking rose the highest by 5.21 per cent and 3.09 per cent respectively, according to data of LankaBangla Securities.

"The stock market is shining after a long time because investors are optimistic about its future," said Mostaque Ahmed Sadeque, former president of DSE Brokers' Association. This is because a move by the Investment Corporation of Bangladesh (ICB) to raise funds from abroad to invest in the stock market has had a positive impact on investor confidence.

The stock market stabilisation fund of the Bangladesh Securities and Exchange Commission (BSEC) also positively impacted investor confidence, Sadeque told The Daily Star yesterday.

The BSEC previously approved the draft rules regarding its stock market stabilisation fund worth Tk 21,000 crore. The fund would be used to save ailing stocks.

"Actually, people are preferring to keep funds in the stock market as the banking interest rate is very low," he said.

"So, if they get some dividends from stocks, its yields are higher than that of bank deposits," Sadeque added.

This year, investors are happy to see a rising trend in the index before Eid-ul-Fitr. The index has been on the rise for the last five consecutive trading days.

Banking stocks rose after many of the lenders declared handsome dividends despite their prices being low, said another stock broker preferring anonymity.

This is because investors suspect the asset quality of banks to be very low.

Insurance stocks have risen for the last few weeks only because of gambling, the broker said, adding that the market regulator should find and punish those who are involved in such activities.

Turnover, another important indicator of the stock market, rose 3.8 per cent to Tk 1,403 crore. At the DSE, 218 stocks advanced, 71 fell and 73 remained unchanged.

Dhaka Insurance topped the gainers' list with 9.92 per cent followed by Metro Spinning, Pioneer Insurance, Sonar Bangla Insurance and Rupali Bank.

Stocks of Beximco were traded the most, worth Tk 120 crore of shares, followed by Brac Bank, National Feed Mills, British American Tobacco, Robi Axiata and Square Pharmaceuticals.

Shyampur Sugar Mills shed the most, losing 5 per cent, followed by Pubali Bank, Appollo Ispat Complex, Familytex (BD) and Sunlife Insurance Company.

Chittagong Stock Exchange (CSE) also rose as the CASPI, the general index of the port city bourse, advanced 235 points, or 1.44 per cent, to 16,566.

Among its 287 stocks to witness trade, 176 rose, 65 fell and 46 remained unchanged.