Dhaka stocks finished positive last week, registering slim gains but ending a four-week bear run, thanks to the regulator’s move for a uniform face value of all scrip that cheered up investors in the last two trading sessions of the week.
DGEN, the benchmark general index of Dhaka Stocks Exchange, advanced by 1.52 per cent, or 62.81 points, to close the week that had four trading sessions at 6,212 points.
The average daily turnover of the bourse increased by 7.27 per cent in last week to Tk 419.81 crore as the investors in the last two trading days went for heavy buying in the hope that the market would turn positive when it would resume after the Eid vacation. The average daily turnover of the DSE was Tk 391.72 crore in the previous week, when the market was suffering from a liquidity crisis amid a lack of investors’ confidence.
Market operators said the legal action taken by the Security and Exchange Commission against five suspected market manipulators made the investors wary about its ramifications and they refrained from trading in the first half of the week. But, the commission’s decision to set a uniform face value for all scrip and mutual fund units prompted the investors to go for heavy buying in the later half of the week, which pulled the stocks up, they added.
The SEC on Sunday filed two cases against five suspected market manipulators for their reported role in bringing about the January’s stock market crash.
The commission on Tuesday decided that the face value of the scrip of all listed companies and units of all mutual funds would have to be converted to Tk 10 by November 30. The uniform face value would come into effect from December 1.
‘Following the news, the stocks with a face value of Tk 100 moved positively,’ said BRAC EPL Stock Brokerage in its weekly review.
‘Investors were psychologically boosted by the news of the regulatory move for a uniform face value, although it does not have any impact on the fundamentals of the shares,’ said Akter H Sannamat, a capital market analyst.
‘The long depression in the market also generated a scope for many to buy when they received a positive hint about the market,’ he added.
Most of the issues in the financial sectors gained in the week. Of them, banks advanced by 2.23 per cent, non-bank financial institutions by 2.28 per cent, and general insurance by 1.07 per cent, although life insurance declined by 0.91 per cent.
Among other sectors, pharmaceuticals advanced by 0.79 per cent, power 1.58 per cent, and cement 0.67 per cent, while telecommunication declined by 0.55 per cent, IT 0.36 per cent, and mutual fund 6.90 per cent.
On Sunday, the Dhaka stocks lost 60.62 points, or 0.99 per cent, with the turnover hitting a three-month low of Tk 303.61 crore.
The bourse remained closed on Monday on the occasion of Janmastami, a public holiday.
The turnover of the DSE dipped to a seven-month low of Tk 285.64 crore on Tuesday in volatile trading as the investors took a policy to wait and see the impact of the SEC move against the five alleged market manipulators before deciding their trading strategy. The DGEN crawled down 11.76 points, or 0.19 per cent, on the day.
On Wednesday, the bourse witnessed its share prices skyrocketing along with a significant rise in its turnover. The DGEN on the day gained 85.86 points, or 1.42 per cent, with the turnover amounting to Tk 544.79 crore.
The market continued to gain for the second day on Thursday, with the general index advancing by 80.50 points, or 1.31 per cent, and the turnover amounting to Tk 545.21 crore.
Investors, exasperated by the relentless volatility of the market, came out on the streets twice last week and demonstrated against the share prices going into a free fall. They demanded immediate resignation of finance minister AMA Muhith for his failure to stabilise the equities market.
Out of the 263 issues traded in the week, 167 advanced, 88 declined, and eight remained unchanged.
-With New Age input
