Vaccine rollout cheers up stock investors | The Daily Star
12:00 AM, December 20, 2020 / LAST MODIFIED: 02:59 AM, December 20, 2020

Vaccine rollout cheers up stock investors

Key indices climb up across the globe

The start of the Covid-19 vaccine rollout in the UK and the US cheered institutional investors around the world, allowing global stock markets to end higher last week and Bangladesh was no exception.

Institutional investors began taking part in the stock market and most importantly were choosing the manufacturing sector in the Dhaka Stock Exchange.

As the vaccine arrived on the scene, the US and the UK already started administering it into the human body, so investors all over the world are optimistic of the economy bouncing back, said Abdul Latif, a stock investor with around 20 years' experience.

The UK started to administer a Pfizer-BioNTech vaccine from December 8, and the mass immunisation in the US began on December 14.

Pfizer and BioNTech announced that vaccine candidates against the pathogen achieved success in the first interim analysis on November 9.

The US's S&P 500 index rose around 1 per cent, and the Nasdaq edged up by 2.4 per cent in the last five days.

The Dow Jones Index gained 2.57 per cent, the Eurozone's Euro Stoxx 50 added 1.37 per cent, Japan's Nikkei 225 advanced 5 per cent, and India's BSE Sensex went up 1.56 per cent.

Institutional investors in Bangladesh are also optimistic along with individual investors, and so they have started to invest, Latif said.

The DSEX, the benchmark index of the DSE, rose 0.5 per cent last week while the daily average turnover of the premier bourse went up around 10 per cent to Tk 920 crore, DSE data showed.

Among the major sectors, the value of stocks of the engineering sector rose the highest, 10.1 per cent, last week followed by pharmaceuticals and cement stocks.

The manufacturing sector has been witnessing the least investment for the past few months amidst the pandemic because of peoples' apprehension over economic trends.

When an economy fears any disruption, the manufacturing sector endures a big blow in the stock market because the demand for products falls fast, Latif said.

The positive movement of the global stock indexes is related to the vaccination because it will help big economies bounce back, said Prof Mohammad Musa, a stock market analyst.

"Normally, we do not see the impact of the world market on Bangladesh's stock market, maybe due to its uniqueness," he said.

"On the other hand, our market is individual investor-based, so big economies' impact is less here," he said.

Now banks are investing funds in the stock market as it is being considered lucrative and they may hopefully see a turnaround of the economy, added Musa, a professor of business and economics.

Twenty-one banks informed the Bangladesh Bank that they would invest Tk 2,050 crore. More than Tk 700 crore was invested as of December 10.

A top official of a merchant bank said they decided to invest in the stock market because lending deemed risky now.

The pandemic might turn out for the better as the vaccine is being administered worldwide, he said, adding that Bangladesh also would surely get the vaccine.

"We had decided to wait until the vaccine is invented before investing here," he added. 

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