Stocks rebound strongly on regulatory moves

DSE daily turnover crosses Tk 11b-mark once again

FE ONLINE REPORT | Wednesday, 12 August 2020

Stocks rebounded strongly on Wednesday, after a single-day break, amid growing investors’ confidence following the securities regulator’s hard stance on the mandatory shareholding issue.

Following the previous session’s mild correction, the market the bourses opened on a positive note and the upward trend sustained until the end of the session.

At the end of the session, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 100.32 points or 2.21 per cent to close at 4,633, after shedding 12 points in the previous session.

Market operators said the securities regulator hard stance on ensuring mandatory shareholding, stern action on wrongdoers, expansionary monetary policy, and gradual reopening of the economy, prompted the investors to take position on selective large-cap stocks.

The Bangladesh Securities and Exchange Commission (BSEC) on July 2 asked 61 directors of 22 listed companies to ensure mandatory 2.0 per cent stake by each director in their own companies other than the independent one within 45 days to continue their directorship.

The stock market regulator also directed the listed companies and their board of directors to comply with the directive regarding holding minimum 30 per cent shares jointly by the directors, other than independent ones, within 60 working days from July 29, 2020.

As per the BSEC information, 42 listed companies have not yet complied with the directive of holding minimum 30 per cent shares by their directors jointly.

In 2011, the regulator issued a circular, ordering sponsors and directors to hold a minimum 2.0 per cent of shares of a company individually and 30 per cent jointly. The directive was amended on May 21, 2019, imposing more restrictions.

The securities regulator’s latest hard stance on ensuring mandatory 2.0 per cent shareholding by each director and jointly 30 per cent shareholding had a positive impact on the stock prices, said a leading broker.

Two other indices also ended higher. The DS30 index, comprising blue chips, advanced 37.32 points to finish at 1,581 and the DSE Shariah Index rose 24.42 points to close at 1,088.

Turnover, the crucial indicator of the market, crossed Tk 11 billion- mark again and amounted to Tk 11.20 billion on the country’s premier bourse, which was 6.87 per cent higher than the previous day’s mark of Tk 10.48 billion.

Gainers outnumbered the losers, as out of 355 issues traded, 199 closed higher and 115 ended lower while 41 issues remained unchanged on the DSE floor.

A total number of 215,395 trades were executed in the day’s trading session with a trading volume of 390.72 million shares and mutual fund units.

The market-cap on the premier bourse rose to Tk 3,522 billion on Wednesday, from Tk 3,454 billion in the previous session.

Beximco Pharma topped the turnover chart with shares worth Tk 570 million changing hands, closely followed by Brac Bank, Beximco, Square Pharma, and BTABC.

Stylecraft was the day’s best performer, posting a gain of 9.99 per cent while Savar Refcatories was the worst loser, losing 9.89 per cent.

The Chittagong Stock Exchange ended higher with its All Shares Price Index (CASPI)—soaring 275 points to close at 13,165 and the Selective Categories Index - CSCX –rising 161 points to finish at 7,961.

Of the issues traded, 164 gained, 90 declined and 30 remained unchanged on the CSE.

The port city bourse traded 18.84 million shares and mutual fund units with a turnover value of Tk 351 million.