The participation of some institutional investors on Monday kept the Dhaka stocks afloat, although the turnover of the bourse slumped to one-and-a-half-month low due to lack of participation of general investors.
The DGEN, the benchmark general index of Dhaka Stock Exchange, gained 103.78 points, or 1.69 per cent, to close the day at 6,223.94 points, ending a two-day plunge.
The turnover of the DSE on Monday dropped significantly to Tk 495.28 crore, compared to that of Tk 560.67 crore in the previous day, due mainly to reduced participation of general investors as they still remained doubtful about the future of the market in the coming days.
Market operators said some institutional investors, who had mostly remained inactive in the last few trading days, went for bottom fishing on Monday, following the massive plunge in share prices over the past 10 days.
The DGEN lost 590 points in the latest spell of bear run starting after the announcement made by the Securities and Exchange Commission that it would file cases against the market manipulators behind the January’s share market crash.
They also said the meeting between the merchant banks and the equities market regulator on the day also prompted the institutions to go for buying.
‘As the Securities and Exchange Commission sat with the merchant banks this morning, it might have some positive impact on the market,’ said a stockbroker.
The SEC on Monday met the leaders of Bangladesh Merchant Bankers’ Association to discuss the current market condition.
The stockbroker said the turnover amount signified that the rise in share prices on Monday was not due to participation of general investors.
‘Such a rise is not substantial,’ he said.
All the major sectors including bank, non-bank financial institutions, insurance, telecommunication, and fuel and power gained heavily on the day.
Investors, who staged rowdy demonstrations in the last week, whom finance minister AMA Muhith termed on Sunday ‘Fatkabaj’, not investors, went to the SEC headquarters on Monday to submit a memorandum of demands. They met the SEC chairman and handed over a 15-point set of demands for bringing back stability in the market.
The latest bear run began at the end of July with a market correction, following the government decision to offload more shares of state-owned enterprises in the market. Poor corporate disclosures made by a number of listed companies and the tight monetary policy adopted by the Bangladesh Bank also fuelled the fall at the time.
The situation worsened after the announcement made by the SEC that it would take legal actions against market manipulators had triggered a rumour of large-scale disinvestment by the big fishes.
Following a rise for 17 successive trading days from June 28, the DGEN stood at 6,710.53 points on July 24. However, the index continued to slip in the next 10 days, except last Wednesday on which the country’s premier bourse gained 196 points.
Akter H Sannamat, a capital market analyst, said, ‘The market made a sharp rise today mainly due to the participation of institutional investors.’
He, however, said the low turnover was not a good sign for the market.
Sannamat, also said, ‘As any negative remark from the top chairs can make the situation worse so they should be make sure that their comments did not facilitate any vested quarter.’
Of the 256 issues traded on Monday, 227 advanced, 24 declined, and five remained unchanged.
Keya Cosmetics Ltd topped the list of the day’s turnover leaders, with its shares worth Tk 29.95 crore changing hands. The rest on the Top-10 list were Beximco, Malek Spinning Mills, Lafarge Surma Cement, RN Spinning Mills, AIMS 1st Mutual Fund, MJL Bangladesh Ltd, Titas Gas, and MI Cement.
-With New Age input