Stock index hits all-time high
The benchmark index of Dhaka Stock Exchange (DSE) rose to its record high yesterday despite technical glitches halting trade at the premier bourse for around one and a half hours.
The DSEX rose 57 points, or 0.91 per cent to 6,365.11 which is its highest since inception in 2013, according to the DSE data.
Meanwhile, market capitalisation came to stand at Tk 532,311 crore, which is also the highest for the DSE.
Earlier, the bourse's main index was DGEN which reached the highest 8,918 points on December 5, 2010.
But upon the discovery of some problems and misrepresentations of the market, the index was closed and a new one named the DSEX was launched.
Despite the deterioration of the pandemic, institutional investors' funds have continued to flow to the stock market so the index was rising, said Khairul Bashar Abu Taher Mohammed, CEO of MTB Capital.
Many institutional investors took up a central bank incentive package and actively made investments, he said.
On February 10, Bangladesh Bank rolled out the package that allows banks to set up a Tk 200 crore fund by availing it from the regulator through a repurchase agreement against treasury bills and bonds they own.
The banks will have to pay 5 per cent interest for the fund and the credit tenure is of up to February 2025.
As the market bounced back soon after its corrections or drops, investors are availing their profits and are optimistic about the market, said the CEO of the investment bank, adding that people now have confidence on the new commission of the stock market regulator.
But risks remain because some junk and newly listed companies' stocks have jumped abnormally. So investors need to be cautious in their choice of stocks, he added.
"The market is now in a good shape, so we want to trade more but the DSE's technical problems makes the task difficult," said Motahar Hossain Masum, a stock investor who has been involved in the market for more than one decade.
"Most of the days I face problems in trading stocks," he said, adding that sometimes it was difficult to trade stocks on time.
On the other hand, the DSE's technical problem centring its trading software is also causing problems sometimes which was not expected, he added.
Yesterday, the DSE's trade came to a halt at 11:10 am for around one and a half hours. So, the DSE authority decided to extend the trading hours to 3:30pm instead of stopping it at 2:30 pm.
The market is rising for mainly two reasons -- liquidity and earnings growth of listed companies, said Shekh Mohammad Rashedul Hasan, CEO of UCB Asset Management.
As money is cheap in the money market, there is a huge amount of liquidity and the influx of liquidity gave a boost to the confidence of investors, he said, adding that now the interest rate of the banking sector was at a very low level.
Corporate earnings growth of many sectors has also been higher in the recent quarters, be it banking, pharmaceuticals or cement. "This is the fundamental reason for a higher index," he said.
People of Bangladesh have come to terms with the pandemic and they chose livelihoods over safeguarding lives, so the business situation has not been impacted by that much of a big extent, he added.
If people invest in stocks considering the growth of listed companies and the quality of the earnings, there is no big reason for worry, he added.
Turnover, another important indicator of the market, rose 0.22 per cent to Tk 1,793 crore while it was Tk 1,789 crore a day earlier.
At the DSE, 210 stocks advanced, 150 declined and 13 remained unchanged.
Miracle Industries topped the gainers' list, rising 9.97 per cent, followed by Legacy Footwear, Index Agro Industries, Samata Leather and Aziz Pipes.
Stock of Beximco were traded the most, worth Tk 152 crore, followed by SS Steel, Fu-Wang Ceramics, SAIF Powertec Industries and Shinepukur Ceramics.
Tamijuddin Textiles shed the most, falling 9.99 per cent, followed by Fareast Finance, Familytex BD, Tung Hai Knitting and Rupali Bank.
The port city bourse also rose yesterday. The CASPI, the general index of the Chittagong Stock Exchange, advanced 60 points, or 0.33 per cent, to 18,379.
Among 320 stocks to witness trade, 170 advanced, 137 dropped and 13 remained unchanged.