Weekly review: Stocks extend winning streak amid regulatory moves

Stocks extended the winning streak for the third straight week that ended on Thursday as investors showed their appetite following the ultimatum for complying with minimum shareholding by the stock market regulator.

Trading on the bourses also resumed normal schedule of four-hour from Wednesday.

The DSEX crossed the 'psychological' threshold of 4,000-mark after June 01, 2020 as the buoyant investors showed their appetite at the lowest possible prices due to regulator-imposed floor price mechanism.

Week-on-week, DSEX, the key index of the Dhaka Stock Exchange, went up by 74.83 points or 1.88 per cent to settle the week at 4,061.

Two other indices also ended higher. The DS30 index, comprising blue chips, advanced 29.87 points to finish at 1,369 and the DSE Shariah Index rose 16.85 points to settle at 938.

Market operators said the securities regulator's ultimatum to non-compliant directors of listed firms to ensure holding of minimum 2.0 per cent shares within 45 days spurred the buy pressure in the market during the week.

The securities regulator has recently asked 61 directors of 22 listed companies to ensure a minimum 2.0 per cent shares in their own companies within 45 days to continue their directorship.

According to the rules, if any director fails to comply with the 2.0 per cent shareholding rules, his/her position would be automatically vacated.

So the companies, whose directors have failed to hold the minimum shares will have to buy shares within the 45-day time frame which attracted investors, said a leading broker.

The central bank's recent directive on easing foreign investment also created a positive impact, said a merchant banker.

The central bank said if foreign investors re-invest their dividends in Bangladesh's capital market that would be treated as further foreign investment.

The move aims at retaining the existing foreign investors' funds and drawing more foreign investment in the days to come, the merchant banker said.

The twin effect of these factors under a new regulatory regime has helped increase the investors' confidence in the market, he said.

The total turnover, a crucial indicator of the market, stood at Tk 9.40 billion as against the previous week's total turnover of Tk 33.34 billion thanks to huge block trade of GSK Bangladesh.

The daily turnover averaged Tk 1.88 billion, which was 77 per cent lower than the previous week's average of Tk 8.33 million.

Block trade contributed 15 per cent to the total weekly transactions where stocks like Beacon Pharma (Tk 336.8 million), Bank Asia (Tk 72.6 million), Singer Bangladesh (Tk 71 million), Glaxo SmithKline (Tk 61.4 million) and Summit Power (Tk 59.9 million) dominated the block trade board.

Some optimistic investors showed their buying appetite based on latest quarterly earnings declarations and to gain some dividend yield, commented International Leasing Securities.

The stockbroker noted that the media reports 14 banks formed special funds worth Tk 17 billion to invest in the market which also encouraged some investors to stay active.

The general insurance sector posted the highest gain of 6.40 per cent as most of the non-complaint directors from insurance sector.

According to media reports, of the 22 companies, 14 are from the insurance sector, which have 49 non-compliant directors.

The heavyweight banking sector posted a 2.90 per cent gain, followed by pharma with 2.50 per cent.

Most of the shares, however, remained stuck at the trading floor amid regulator-set floor price. Of the traded issues, 194 remained unchanged while 142 issues advanced and 22 declined on the DSE.

The market capitalisation of the DSE went up to Tk 3,150 billion Thursday, from Tk 3,117 billion in the previous week.

Square Pharma dominated the week's turnover chart with shares worth Tk 792 million changing hands, followed by Beximco Pharma, Beacon Pharma, Grameenphone and Bangladesh Submarine Cable.

Paramount Insurance was the week's best performer, posting 53.36 per cent while Tung Hai Knitting was the week's worst loser, losing 9.10 per cent.

The Chittagong Stock Exchange (CSE) also ended higher with its CSE All Share Price Index - CASPI -soaring 215 points to settle at 11,536 and the Selective Categories Index - CSCX rising 135 points to close at 6,989.

Of the issues traded, 83 gained, 20 declined and 141 remained unchanged on the CSE.

The port city bourse traded 14.42 million shares and mutual fund units with turnover value of Tk 2.01 billion.

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