Share-split move brings stocks back to black

Stocks returned to the black yesterday with cheerful trading of investors that drove the key index to a two-week high. The regulator's directive to set uniform face value for equity shares also helped the market end the day in the positive territory.
The Securities and Exchange Commission set Tk 10 in face value for each equity share and mutual fund unit to be effective from December 1.
The benchmark General Index, DGEN, the yardstick of Dhaka Stock Exchange, closed on 6,113, after gaining 1.42 percent or 85 points.
Total market capitalisation of listed stocks and mutual funds is Tk 290,645 crore on the DSE. Shares with Tk 10 face value occupy 55.40 percent of the market and the rest belongs to the shares with Tk 100.
Market experts believe the SEC's decision is important that would bury misinterpretation, confusion and manipulative attempts.
“The regulator's initiative is a psychological motivation for investors, although it has no relationship with the companies' fundamentals,” said Fakhor Uddin Ali Ahmed, president of Chittagong Stock Exchange. The initiative boosted investor confidence, as they were waiting for long for it, he added.
Ahmed said the regulator should take steps to convert every company's market lot to a uniform lot.
“Investors physiologically reacted to the new stock split recipe of the regulator,” said LankaBangla Securities in a daily market analysis.
But many people are still sceptical and waiting to see the sustainability of yesterday's upward trend, it said.
The split recipe boosted the activities of the bourse where turnover, volume and trade spiked 90.72 percent, 22.37 percent and 62.42 percent.
Turnover on the premier bourses stood at Tk 544 crore, reaching a 10-day high, which is 90.7 percent higher than previous day's turnover of Tk 285 crore.
Of the total 255 traded on the DSE, 185 shares gained while 65 shares declined. A total of five shares remained unchanged.
Chittagong Stock Exchange also gained yesterday with the Selective Categories Index, CSCX, went up 111 points or 1.01 percent, to end the day on 11,175. Advancers beat losers 94 to 78, with 10 securities remaining unchanged on the port city bourse.