Turnover 11-month high on enthusiasm over blue-chip scrips

The Dhaka Stock Exchange (DSE) on Thursday experienced a turnover of more than Tk 10 billion after 11 months.

It was 43 per cent up from the previous session to Tk 10.63 billion.

Market operators said a declining trend in interest rates and increased optimism over upcoming national elections encouraged investors to pour money in stocks.

The DSEX, broad index of the Dhaka bourse, also experienced a sharp rise of 1.70 per cent or 91 points to close at 5443 points.

S M Galibur Rahman, head of research and strategic planning at Shanta Securities, said high interest rates had been the main reason behind investors' poor participation in the equity market.

The interest rates of fixed-income securities have been on the decline in recent months.

The yield of 10-year Treasury bonds fell by 2.05 percentage points to 10.45 per cent in the last one month. On the other hand, return from the equity market is set to touch the interest rates of fixed income securities.

"The equity market's yield is likely to see a further rise in the next quarter," said Mr. Rahman.

Meanwhile, the political situation seems to have improved, with parties gearing up for elections.

"These factors played a role in reviving investor sentiment about the equity market," said Mr Rahman.

The price appreciation experienced by large cap and multinational companies is a positive side of the market recovery, he said.

Of the 30 blue chip stocks, 24 closed higher on Thursday. Subsequently, the DS30 index advanced 1.40 per cent or 16.20 points to close at 1170.61 points.

The blue chip companies also dominated the day's top index driver list.

Of them, Islami Bank alone added 8.8 points to the broad index, followed by Pubali Bank 8.7 points, Square Pharmaceuticals 8.4 points and British American Tobacco Bangladesh 7.5 points.

Investor participation on Thursday was mainly concentrated in the bank sector. Bank stocks posted the highest turnover of Tk 3.85 billion. Trust Bank was the number one gainer on the Dhaka Stock Exchange, with a rise of 9.90 per cent to Tk 22.20 each share.

Midland Bank was the worst loser, shedding 9.22 per cent to Tk 19.70 per share on the DSE.

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