Stocks bounce back as banks to get more time to adjust exposure
Stocks rebounded yesterday after losing for eight straight days, as investors went on a buying spree following the news of an extension of time given to banks to adjust their investment exposure to the capital market.
DSEX, the benchmark index of the Dhaka Stock Exchange, rose 51.6 points or 1.16 percent, before closing at 4,475.81 points.
The market sparked at the news of the finance minister's intention to propose an extension of two years for banks to lower their stockmarket exposure to the allowed level, said IDLC Investments.
“The comment revitalised the market,” the merchant bank said in its regular analysis.
On Sunday, Finance Minister AMA Muhith said the government is going to amend a provision in the Banking Company Act so that banks get two more years to bring down their capital market investment exposure to 25 percent of their total equity, which is a bank's paid-up capital plus reserves.
If the law is amended, banks will have to lower their exposure by July 2018, instead of the existing deadline of July 2016. LankaBangla Securities said, “The market made a significant move as the investors found some form of assurance from the finance minister.”
With the gain, the index recouped some losses of the previous trading sessions led by banks, cement and fuel and power stocks, the stockbroker added.
Turnover, another important indicator of the market, jumped 87 percent to Tk 415.64 crore, with 10.19 crore shares and mutual fund units changing hands on the DSE.
Of the traded issues, 238 advanced and 44 declined with 35 securities closing unchanged on the premier bourse.
Ifad Autos dominated the turnover chart with 48.55 lakh shares worth Tk 49.61 crore changing hands, followed by Beximco, KDS Accessories, Olympic Industries and Saif Powertec.
Among the major sectors, fuel and power rose 2.38 percent in market capitalisation, followed by cement that increased 1.64 percent, textiles 1.55 percent and banks 0.72 percent.
Conversely, only the food and allied sector declined 0.85 percent.
Shahjibazar Power Company was the day's best performer with 10 percent in gains, while Ifad Autos was the worst loser, shedding 15.48 percent.
Chittagong stocks also rose yesterday with the bourse's benchmark index, CSCX, increasing 82.32 points or 1 percent to finish the day at 8,310.85 points.
Gainers beat losers as 174 advanced and 40 declined, while 20 finished unchanged on the Chittagong Stock Exchange.
The port city bourse traded 89.67 lakh shares and mutual fund units worth Tk 25.49 crore in turnover.
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