DSEX adds 36 points in H1 amid volatile trading

Stocks posted a slight gain in the first half of the 2019 despite the year started with shining streak amidst post-election buoyancy.

DSEX, the prime index of the Dhaka Stock Exchange (DSE), to 5,950 within 18 days after the national election on the back of a significant increase in the participation of investors.

Some of the institutional investors also started investing after the election hoping a peaceful political situation in the coming years.

After the unusual sharp increase, the market started to decline mainly due to liquidity crunch in the financial sector coupled with lack of confidence in the market. Even, the DSEX came down to 5,196 on May 15, 2019.

The prolonged liquidity crunch amid rising bank interest rate that resulted in some funds flow from capital market to money market, commented EBL Securities, in its half yearly market analysis.

Market analysts said institutional investors adopted a 'wait-and-see' approach to sense the market pulse, while most small investors were inactive due to fund crisis and lack of confidence.

The prolonged liquidity crisis also prompted the Bangladesh Bank to redefine the banks' capital market exposure to increase the fund flow in the capital market.

Between January 01 and June 30, 2019, DSEX, the prime index of DSE, went up by 36 points or 0.66 per cent to finish at 5,421 on Sunday.

Market capitalisation of the prime bourse rose 3.25 per cent in six months to Tk 3,998 billion on Sunday.

The daily turnover, another important gauge, stood at Tk 5.80 billion on an average, up by 5.26 per cent year-on-year in first half of 2019.

The CSE All Share Price Index (CAPSI) also advanced 185 points or 1.12 per cent in the past six months to reach at 16,634 on Sunday.

Recent hike in fuel and energy costs (increased gas price) may posit some challenges, said the EBL Securities.

The stockbroker, however, said the government's move for supporting banking sector through some favorable policy guidelines, imposition of tax on bonus shares to encourage cash dividends may instigate investors to invest in capital market.

Rise in tax rate on national saving certificates (NSC) interest rate and increased regulatory compliance on sale of NSC may result in some fund flow to banking sector and capital market, the stockbroker noted.

Among the major sectors, general insurance posted the highest gain of 24 per cent, followed by IT sector with 15 per cent, power 14 per cent, food 14 per cent, pharmaceuticals 6.60 per cent, banking 3.60 per cent, engineering 2.20 per cent and telecom 0.60 per cent.

On the other hand, jute sector witnessed the highest loss during the period, losing 15.6 per cent, followed by cement with 11 per cent, ceramic 5.9 per cent, financial institutions 3.40 per cent and textile 3.30 per cent.

Sonar Bangla Insurance was the highest gainer in the first half of 2019, soaring 163 per cent while Monno Stafflers was the worst losers, losing 32 per cent during the period.

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