Stocks gain on institutional support after relentless rout

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Dhaka stocks on Sunday rebounded in cautious trading after declining to a 33-month low in the previous trading session as a section of investors, mostly institutional ones, went for bargain hunting after a three-day rout.

DSEX, the prime index of Dhaka Stock Exchange, advanced by 1.33 per cent, or 64.98 points, to close at 4,920.96 points on Sunday after losing 103 points in the previous three sessions.

The market opened positive, ridding on a surge in share prices of heavyweight Grameenphone and Square Pharmaceuticals, market operators said.

They said the market surge accelerated in late trading as more institutional investors invested funds in the undervalued stocks after the recent fall in share prices.

Grameenphone, the largest capitalised company at the market, shot up for the second day as the government announced that it would soon solve the mobile operator’s dispute with the Bangladesh Telecommunication Regulatory Commission over an audit claim, market operators said.

The surge added around 57 points to the index.

The announcement came from finance minister AHM Mustafa Kamal after his meeting with the capital market regulators and other stakeholders.

Market operators said the meeting observed that Grameenphone’s tussle with the telecom regulator was one of the reasons for the recent bearish trend at the stock market, and the minister assured that the government would solve the problem soon.

They said investors also became active in anticipation that Bangladesh Bank might allow banks to borrow funds at low rate of interest from the central bank for investing in the capital market.

Share prices of Square Pharmaceuticals snapped a seven-day fall, soaring by 4.8 per cent on Sunday ahead of declaration of its financial results.

Average share prices of telecommunication sector advanced by 7.3 per cent, pharmaceutical 2.6 per cent, textile 0.6 per cent and energy 0.5 per cent on the day.

The government has recently made a number of moves to improve the market condition, but to no avail, market experts said.

The continued plunge in share prices sent many investors to the edge and their confidence in the market was yet to be restored, they said.

So, turnover on the bourse decreased on Sunday. It dropped to Tk 304.72 crore on Sunday from Tk 384.96 crore in the previous session.

The market has remained bearish for last eight months due to volatility in the country’s banking sector, Grameenphone’s audit issue and contradictory government measures for the financial sector and widespread share sales by directors and placement-share holders, market experts said.

EBL Securities in its daily market commentary said, ‘A surge in prices of index movers namely GP, Square Pharma and BATBC led the market to rise and settle positive. Investors’ confidence is yet to be recovered due to recent market volatility as participation remained low.’

Average share prices of life insurance, general insurance and bank dropped by 0.1 per cent each.

Out of the 352 scrips traded on Sunday, 185 advanced, 106 declined and 60 remained unchanged.

DSE Shariah index DSES added 2.40 per cent, or 26.97 points, to close at 1,150.18 points.

Blue-chip index DS30 soared by 1.76 per cent, or 30.59 points, to close at 1,766.52 points.

Grameenphone led the turnover chart with its shares worth Tk 38.65 crore changing hands on the day.

Monno Jute Stafflers, JMI Syringe, National Tubes, Fortune Shoes, Square Pharmaceuticals, Monno Ceramics, Wata Chemical, United Power Generation Company and Stylecraft Limited were the other turnover leaders.

JMI Syringe gained the most on the day with a 10.85-per cent increase in its share prices while Emerald Oil Industries was the worst loser, shedding 9.52 per cent.
Source: http://www.newagebd.net

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