Stocks edge up as tension over next polls eases

Stocks extended the winning streak for the second straight session on Sunday, the first trading day after Eid holidays, driven by investors' buying interest in selective blue chip shares.

Market analysts said the market reacted positively to the recent developments on the political front over next polls.

Chief Adviser Prof Muhammad Yunus at a meeting with BNP acting chairman Tarique Rahman said the next general elections would likely be held in the week before the start of Ramadan next year.

Investors showed a renewed buying appetite as the political tension eased after the announcement of the election roadmap, said Akramul Alam, head of research at Royal Capital.

Generally, investors feel comfortable to invest when there is an elected government that can ensure long-term policies.

Moreover, several market-supportive measures in the proposed budget, including the widening of the tax rate gap between listed and non-listed firms, inspired bargain hunters to invest in selective stocks, said Mr Alam.

The finance adviser proposed widening the tax gap between listed and non-listed firms from 5.0 percentage points to 7.5 percentage points to inspire new listings.

The proposed tax benefit measures are expected to positively impact the listed firms' profitability across sectors while lowering tax burdens for merchant banks.

"The proposed tax reductions are expected to benefit companies in the pharmaceuticals, fuel & power, information technology, food & allied, real estate, cement and automobile sectors," said EBL Securities.

Although global stocks started falling on Friday due to the Israel-Iran conflict, the Bangladesh stock market managed to close higher. "Our stocks are already trading at huge discounts so there is little impact of the conflict," said Mr Alam.

However, he said that if the conflict dragged on, inflationary pressure would impact local businesses since oil prices had already started rising.

The market opened on a slightly pessimistic note on Sunday but it quickly rebounded to positive terrain. The dominance of buyers sustained throughout the session.

Optimistic investors continued their buying spree in selective blue chip stocks. The prices of 18 blue chips increased out of 30.

The DSEX, the prime index of the DSE, finally climbed 15 points or 0.0.32 per cent to 4,724. The DSEX recovered 60 points in the past two straight sessions.

BRAC Bank, BAT Bangladesh, Square Pharma and City Bank jointly accounted for a 13-point rise of the key index.

Subsequently, the blue-chip index, a group of 30 prominent companies, rose 9 points to 1,771 while the DSES Index, which represents Shariah-based companies, saw a fractional gain of 0.23 point to 1,028.

Turnover, another important indicator of the market, also rose to Tk 2.63 billion, which was 17 per cent higher than the previous session's turnover of Tk 2.24 billion.

Investors were mostly active in the food sector, which accounted for 23 per cent of the Sunday's turnover, followed by the banking sector (14 per cent) and pharma sector (13 per cent).

However, losers took a modest lead over the gainers as out of 392 issues traded, 179 declined, 145 advanced and 68 remained unchanged on the DSE trading floor.

Lovello Ice-cream was the most-traded stock, with shares worth Tk 253 million changing hands, followed by BRAC Bank, Beach Hatchery, and Asiatic Laboratory.

Asiatic Laboratory was the day's best performer, posting a gain of 10 per cent, while Phoenix Insurance was the worst loser, shedding 8.58 per cent.

The port city bourse, Chittagong Stock Exchange, also ended higher with its CSE All Share Price Index - CASPI -gaining 45 points to settle at 13,185 and the Selective Categories Index - CSCX -rising 24 points to 8,046.

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