Five big listed companies are strong enough to push the price indices up or down on a single trading day. It was seen in yesterday’s trading also.
The benchmark index of the Dhaka Stock Exchange, DGEN, gained 134 points, to which the contribution of the top five firms was more than 30 points or 23 percent.
Even if the share prices of other securities remain unchanged, the DGEN goes up or down by more than 16 points on a single day, with the prices of the five rising or falling by Tk 1 only.
The premier bourse calculates the impacts of the stocks on the index, taking into account the free-float or tradable shares of a listed company.
The top five market movers are National Bank, Grameenphone, Islami Bank, Lafarge Surma Cement and EXIM Bank.
If the National Bank prices fall or go up by Tk 1, the indices will decline or increase by 3.68 points, followed by Grameenphone, Islami Bank, Lafarge Surma Cement and EXIM Bank.
Of the firms, Grameenphone emerged as a new market mover recently, after a three-year lock-in period on the sponsor shares of the country’s largest mobile phone operator expired last month.
“It doesn’t send any bad signal to the market, said a DSE official. “It only shows the trends of the big companies’ price movement,” the official said, asking not to be named.
Listing of large corporate bodies such as Grameenphone and Lafarge Surma Cement always has a positive impact on the stockmarket, he said. “It will encourage other big and multinational companies to be listed,” he added.
Akter Hossain Sannamat, a market analyst and managing director of Union Capital, said companies with higher capital base can put an impact on the index movement. “If the share prices of the high-cap companies rise or decline significantly, the index will also go up or down drastically,” he said.
He, however, said the index movement does not reflect the true picture of the market, as it can go up or down due to the price movement of the high-cap companies.
“The index movement is only an indicator for the market; it’s not any deciding factor,” he said.
“Many retail investors follow the index movement to make an investment decision. But, they should follow the company fundamentals, instead of index movement, to take such decisions,” Sannamat added.
Courtesy of The Daily Star
