The Dhaka bourse continued to gain for the third consecutive day yesterday thanks to the investors' increasing interest on shares of bank and non-bank financial institutions (NBFIs).
The price rise of the two sectors—bank 4.38 percent and NBFIs 5.40 percent—pulled the index up at a time when most of the other stocks experienced a huge fall.
For instance, textile lost 3.27 percent, engineering 2.08 percent and fuel and power 0.59 percent.
However, the DSEX, the benchmark index of the premier bourse, rose 70.76 points or 1.29 percent before finishing the day at 5,538.50.
Investors are leaning towards banks and NBFIs to find an alternative to low-cap stocks and junks, which are facing a new regulatory squeeze because of abnormal price hikes, said Sherief MA Rahman, CEO of BRAC EPL Stock Brokerage.
The Bangladesh Securities and Exchange Commission has suspended trading of three low-cap stocks—Monno Jute Stafflers, Leagacy Footwear and Bangladesh Autocars—due to the abnormal price rise.
Among the junk and low-caps, Dhaka Stock Exchange has also recently delisted two and identified 15 others to review the viability of their business -- the step from where the process for delisting starts.
The banking stocks rose as investors snapped up the shares that were hit hard during the last few months, said Mohammed Rahmat Pasha, managing director of UCB Capital Management.
Banking stocks declined 28.5 percent and lost Tk 20,730 crore in market capitalisation in the current year, according to the data of IDLC Securities.
To create a balance in investments, investors are pouring money in banks and NBFIs, which remained undervalued for around six months, Pasha said.
Turnover, another important indicator of the market, decreased 3.48 percent to Tk 560.57 crore, with 20.84 crore shares and mutual fund units changing hands on the DSE.
Of the traded issues, 127 advanced, 183 declined and 23 closed unchanged on the premier bourse.
BBS Cables dominated the turnover chart with 21.40 lakh shares worth Tk 24.48 crore changing hands, followed by LankaBangla Finance, City Bank, Dhaka Bank and Premier Bank.
Republic Insurance was the day's best performer with a 9.95 percent gain while Information Dragon Sweater was the worst loser, shedding 11.64 percent.
Chittagong stocks also soared yesterday with the bourse's benchmark index, CSCX, increasing 117.17 points or 1.15 percent to finish the day at 10,298.23.
Losers beat gainers as 97 advanced, 135 declined and 14 finished unchanged at Chittagong Stock Exchange.
The port city bourse traded 1.11 crore shares and mutual fund units worth Tk 26.37 crore in turnover.