Stocks head high amid growing confidence

Stock prices are soaring with the core index of the major bourse hitting a 12-month high in the outgoing week as investors put fresh stakes in stocks amid high expectation.

Week-on-week, DSEX, the key index of the Dhaka Stock Exchange (DSE), went up by 83.47 points or 1.69 per cent to settle at the 12-month high at 5011. It was the highest level of DSEX since September 8, 2019.

The DSEX surged a cumulative 1,050 points or 25 per cent in the past 12 consecutive weeks. The DSE market-cap also added Tk 685 billion during the period under review.

Market analysts said active participation of the high net worth individuals due to lower returns from the money market, signs of economic recovery and strong regulatory actions against wrongdoers prompted the investors to inject fresh funds into the market.

The expected arrival of an effective vaccine and a return to normalcy by early next year, made the investors believe the stock market was likely to retain strength with economic recovery, commented BRAC EPL, a leading brokerage firm.

The index was rising due mainly to the growing confidence in the market as the new commission took some steps against wrongdoers, Khairul Bashar Abu Taher Mohamed, chief executive officer of MTB Capital, told the FE.

He noted that the regulatory measures were crucial for boosting the confidence of the stock investors, which geared up the index and turnover in recent times.

The stock market regulator continued with its tough stance on gamblers and came up with a number of conditions for junk stocks and slapped several companies with big fines as part of its efforts to go tough on the wrongdoers.

The new-look commission has also taken some measures against errant directors of listed companies and cancelled some questionable IPO proposals.

Following such regulatory moves, the enthusiastic investors continued to show their appetite, especially for large-cap stocks, amid growing confidence in the market, said a leading broker.

He noted that the securities regulator's strict stance on ensuring mandatory shareholding rules and the signs of economic recovery after pandemic-induced shock, had also a positive impact on the stock prices, he added.

The securities regulator issued a new directive on financial reporting and disclosure of mutual funds and asset managers to enhance transparency in disclosure in the interest of investors and capital market.

The regulator also suspended share trading of Beximco Synthetics from Tuesday after the company applied for delisting from the stock exchanges due to incurring losses for years.

The week featured five trading days as usual. Of them, four sessions closed higher while one saw moderate correction.

Two other indices also ended higher. The DS30 index, comprising blue chips, rose 24.82 points to close at 1,740 and the DSE Shariah Index soared 16.70 points to settle at 1,158.

The total turnover, a crucial indicator of the market, stood at Tk 52.94 billion, against Tk 42.39 billion in the week before, soaring 25 per cent as last week saw five sessions instead of the previous week's four.

The daily turnover averaged almost same at Tk 10.58 billion last week against Tk 10.59 billion in the previous week.

Spontaneous participation backed by rising confidence coupled with persistent upbeat market trend tempted the sideline investors to inject fresh fund into stocks, commented the International Leasing Securities.

The pharma sector continued to dominate the turnover board, accounting for 20 per cent of the week's total turnover, followed by engineering (12 per cent) and banking (10 per cent).

Gainers outnumbered the losers, as out of 360 issues traded, 217 closed higher, 119 lower while 24 issues remained unchanged on the DSE floor.

The market capitalisation of the DSE also rose 1.71 per cent week-on-week to Tk 3,789 billion on Thursday, the last trading session of the week.

Beximco Pharma continued to dominate the weekly turnover chart with shares worth Tk 3.44 billion changing hands, followed by Beximco, Brac Bank, Orion Pharma and Delta Brac Housing Finance.

International Leasing Finance was the week's best performer, gaining 45.28 per cent while Pragati Life Insurance was the week's worst loser, losing 29.62 per cent.

The Chittagong Stock Exchange (CSE) also kept rising with the CSE All Share Price Index - CASPI -gaining 229 points to settle at 14,295 and the Selective Categories Index CSCX advancing 120 points to close at 8,602.

Of the issues traded, 192 gained, 96 declined and 24 remained unchanged on the CSE.

The port city's bourse traded 77.84 million shares and mutual fund units with the turnover value totalling Tk 1.54 billion during the week.

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