Dhaka stocks gained on Wednesday breaking a six-day losing streak following desperate efforts by market regulators and the Dhaka bourse to prop up the market with the help of institutional support.
DGEN, the benchmark general index of Dhaka Stock Exchange, gained 1.48 per cent, or 68.85 points, to close at 4,700.03 points. In the last six sessions, the DGEN had lost 392 points.
The bourse’s turnover declined to Tk 187.28 crore on Wednesday from that of Tk 235.98 crore on Tuesday.
‘Wednesday’s trading pattern, especially the low turnover, indicates that the participation of institutional investors kept the index afloat,’ market analyst Akter H Sannamat told New Age.
He said the investors’ confidence hit the lowest ebb due to the uncertainty and confusion created over the mandatory shareholding rule for the listed company directors.
‘The need of the hour is institutional support, not only for a day or two, but for sustainable period of time,’ he said.
Market insiders said the DSE and the Securities and Exchange Commission on Wednesday verbally requested officials of many brokerage houses and merchant banks to become active in the market and keep it afloat.
‘The state-run brokerage house and other investment entities were active on Wednesday as many of them featured on the list of the day’s top brokers,’ said a SEC official.
Market operators said investors took a wait-and-see policy due to the legal complexity surrounding the SEC ordinance and its silence about its next move on compliance of the mandatory shareholding rule by listed company directors.
The time extension issue for the directors, who failed to comply with the SEC rule for holding 2 per cent shares of their companies by 21 May, turned out to be a major concern of the investors.
A news spread in the market during the end of the day’s closing that the SEC would get the copy of the High Court’s verdict on the day that legalised the mandatory shareholding rule.
The SEC was unable to announce its next move about the mandatory shareholding by listed company directors because of the delay in official release of the verdict.
All the major sectors advanced on Wednesday when non-bank financial institutions hit the top with 4.56 per cent rise on the day.
Bank shares advanced by 1.26 per cent, telecommunication by 0.90 per cent, pharmaceuticals by 0.75 per cent and power gained 0.67 per cent.
Of the 259 issues traded, 220 advanced, 25 declined and 14 remained unchanged.
-With New Age input