Turnover riding high on optimism

Investor optimism coupled with fresh liquidity boosted turnover on the Dhaka Stock Exchange this year, analysts said.
Turnover on the DSE floor advanced 121.69 percent to Tk 552 crore, for the first time this year.
“Investors went on a buying spree due to attractive prices of shares and mutual fund units,” said Ahmed Rashid, senior vice-president of the DSE.
Rashid, also a director of DSE, said most of the listed companies' prices went down and touched the lower limit due to the bearish run rampant towards the end of last year.
Some optimistic institutional and individual investors injected fresh funds to the market, which, in turn, had a positive impact on the retail investors' outlook, he said.
Md Moniruzzaman, managing director of IDLC Investments, too, said the same. “Expectation of good corporate results triggered investors to take fresh positions in the market,” said Mohammed Rahmat Pasha, managing director and chief executive officer BRAC-EPL.
The banking sector, which accounts for 30 percent of the market, will report their yearly performance soon, which, he expects, will enhance inventor activity in the days to come.
“The expansionary monetary policy of Bangladesh Bank also boosted investor confidence,” added Pasha.
“Apart from the comfortable macroeconomic indicators, the recent cut in repo rates had a positive effect on investor sentiment,” said Md Ashaduzzaman Riadh, a senior research analyst at LankaBangla Securities.
The higher private sector credit growth and increase in broad money supply are expected to reduce the cost of borrowing and increase corporate bottom line and economic activities, he said.
“The declining inflation rate is creating room for monetary easing, meaning the market is expected to see more liquidity,” he added.
Inflation eased to 7.38 percent in January, down from December's 7.69 percent, showed data from Bangladesh Bureau of Statistics.
Furthermore, the low prices lured in foreign investors, said Rashid.
In January, foreign investors bought shares worth Tk 136.48 crore, up around 97 percent year-on-year, according to DSE.

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