Govt's focus on quality listing to develop market: Finance adviser

The interim government will work to improve the depth of the equity market through listing of good companies including multinational ones, said Finance Adviser Dr. Salehuddin Ahmed.

He spoke with journalists on Wednesday after a meeting with top brasses of the Bangladesh Securities and Exchange Commission (BSEC).

"We discussed all the problems of the market. The government's aim is to build a market of global standards, resolving previous issues," Mr. Ahmed said.

BSEC Chairman Khondoker Rashed Maqsood, all commissioners and top executives were present at the meeting with the finance adviser.

Meanwhile, stocks on the Dhaka bourse witnessed a sharp gain for the second straight day on Wednesday as the market reacted to the news of the meeting.

The DSEX, broad index of the Dhaka Stock Exchange (DSE), exceeded 5,100 points, supported by positive earnings disclosures in recent times of some companies and dividend declarations amid anticipation of stimulus from the government.

"We want to improve the market. There is no point of any discussion unless the depth of the market can be enhanced," Mr. Ahmed said.

The meeting also discussed how to ease the burden of negative equity and introduce a buyback mechanism, he said, adding that the government was striving to set short-term, mid-term, and long-term goals.

Market operators expect a bail-out measure to reduce the burden of negative equity.

"We also have talked about revival of the mutual fund sector and the matter of providing advisory services to small investors," said Mr Ahmed.

The indices of the Dhaka bourse on Wednesday remained elevated right from the start of the session as buyers remained predominant across the trading floor, causing most of the stocks to witness price appreciation.

The market rally was largely supported by fundamentally-strong stocks.

In addition to the news about the meeting, regulatory efforts to restore investor sentiment by forming a committee to find reasons behind the latest downtrend resulted in the index rise.

Substantial price surge of large-cap stocks, including blue chips, helped the benchmark index of the DSE gain more than 147 points or 2.94 percent to 5,164.

The DSEX recovered 266 points in the past two days after losing 343 points in the previous four trading days.

"Buyers continued showing their dominance across the trading floor today, bolstered by better-than-expected earnings and dividend declarations of the listed companies," said EBL Securities. Anticipation of policy support from the regulator to enhance liquidity flow and reduce tax burdens further garnered the buying momentum.

Despite the signs of market recovery, overall investor participation was low and the sustainability of this upward trend is contingent on broader political and economic stability, said the stockbroker.

Substantial price appreciation of leading blue chips stocks, such as BAT Bangladesh, BRAC Bank, National Bank, LafargeHolcim, Square Pharma, and Grameenphone, played a key role in extending the upward trend.

These six stocks jointly accounted for one-third of the index rise on Wednesday.

Subsequently, the blue-chip index DS30 surged more than 57 points to 1,915 while the DSES index, which represents Shariah-based companies, rose 22 points to 1,136.

Optimistic investors rushed to capitalize on oversold stocks as they had become cheap after sharp corrections in recent times.

"Investors' confidence has got a boost as they hope for a vibrant capital market in near future," said a leading broker.

Turnover climbed 50 per cent to Tk 5.19 billion on Wednesday from the day before, as investors poured funds in large-cap stocks, expecting short-term gains.

All large-cap sectors posted gains. As many as 373 stocks saw price appreciation, 15 declined and 9 remained unchanged.

The Chittagong Stock Exchange also ended sharply higher, with its All Shares Price Index (CASPI) soaring 330 points to 14,347, while the Selective Categories Index (CSCX) jumped 193 points to 8,720.

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