Thursday, July 18, 2024

Dhaka stocks skyrocket for 2nd day

Share prices on Dhaka Stock Exchange skyrocketed for the second day on Sunday buoyed by a number of government measures to stabilise the market in the wake of two weeks of heavy slides and violent street protests.
The general index of the bourse advanced by 463.27 points, or 7.81 per cent, on the day to close at 6,389.62 points as the general investors refrained from any panic-driven share-sales.
On Tuesday, the DSE general index gained 346.84 points, or 6.21 per cent, rebounding from the relentless bear run of the previous two weeks. Trading on the bourse remained closed on Wednesday to Saturday.
According to market operators, the market began with a huge leap on Sunday with the DSE general index gaining making more than 400 points in just five minutes.
Prices of most of the issues reached the upper ceiling of the circuit breaker and there were very few sellers for many of the issues, especially those of the banks.
A market operator said the finance minister’s comment on Friday that the merchant banks would not be allowed to go for forced selling of shares of their clients had instilled some confidence into the investors.
The government’s directive to state-owned banks to invest in the market with their own funds and allocating Tk 200 crore to the Investment Corporation of Bangladesh for the same purpose, besides the Securities and Exchange Commission giving approval to a Tk 500 crore mutual fund for immediate investment in the stock market, helped the capital market bounce back.
The SEC also has approved 11 more mutual funds, whose sponsors were asked to invest Tk 400 crore in the capital market as soon as possible.
Market operators said declarations of handsome dividends by a number of banks, including One Bank, Prime Bank, and Dhaka Bank, and the non-bank financial institutions like Lanka-Bangla Finance also infused the investors with a buying mood but the trading of the issues was thin due to a lack of sellers.
‘Basically, investors wanted to hold on to their stocks on Sunday as they were still in heavy losses despite the two days’ gain,’ remarked an operator, adding that institutional investors were yet to go for heavy buying.
On Tuesday too, thin trading had pushed down the turnover to Tk 577.71 crore from Tk 689.30 crore on the previous trading day.
Out of the 259 issues traded on the DSE, 251 advanced and only eight declined on Sunday.
Market players, however, were not entirely happy at the way almost all the share prices skyrocketed on Sunday as they felt some of the low-profile shares also gained heavily.
DSE president Shakil Rizvi said, ‘The market is entering a positive zone as the government measures boosted the confidence of the retail investors.’
‘As no forced selling took place today, that might be another reason for the market to go up,’ he told the media after the closing bell rang at the bourse.
Rizvi, however, warned the investors to play their hands tactfully in order to sustain the gaining streak.
‘Now they have to be more careful about their investment and must go for shares with strong fundamentals. It is not good if low-profile shares also gain heavily,’ he observed.
Salahuddin Ahmed Khan, a finance teacher of Dhaka university, told New Age, ‘The regulators and the government pushed the ball back to the court of investors as now it’s the investors who have to play the major role in strengthening the market.’
He claimed the market was still behaving in an erratic way as the prices of all the shares, irrespective of their worth, were going up. ‘This is a bad sign for the market, which shows negligence on the part of investors.’


Courtesy of New Age

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