Dhaka stocks last week continued to gain for the second consecutive week with the turnover of Dhaka Stock Exchange increasing significantly as the investors went for heavy buying following the government announcement that investment of undisclosed money would be allowed in the capital market this fiscal year.
DGEN, the benchmark general index of the DSE advanced by 269.97 points, or 4.62 per cent, to finish the week at 6,117.23 points, compared to 71.08 points gained in the previous week.
The average daily turnover of the DSE in last week increased by 80.76 per cent to Tk 800.55 crore from Tk 442.89 crore in the previous week as the news of budgetary provision for allowing investment of undisclosed money in stocks boosted the investors.
The parliament on Tuesday passed the Finance Bill 2011 allowing investment of undisclosed money in the equities market in addition to treasury bonds and the government's infrastructure development fund by paying a 10 per cent tax.
Capital market stakeholders, after the recent stock market debacle, had been demanding such a provision arguing that it would ease the liquidity crisis in the market and help it rebound, market operators said.
The DGEN had shed 213 points in the week since June 9, on which the finance minister tabled the proposed budget at the parliament without any such provision.
The market, however, had been in an uptrend before the passage of the bill as the investors anticipated that the government would finally allow investment of undisclosed money in the capital market.
Experts said, in last week, the Bangladesh Bank's instruction to the commercial banks to calculate the credit-deposit ratio considering other banks' deposits as a source of fund also helped the market to rise.
Mahmood Osman Imam, a professor of finance at Dhaka University, said, 'It is clear that the market has taken a positive turn as the trade volume and turnover had risen significantly in the week and the credit goes to the commercial banks for their active trading in shares.'
'The BB move of resetting the credit-deposit ratio of commercial banks seemed to ease the liquidity crisis to some extent as they became more active,' he said.
'The extension of time for banks to adjust their capital market exposure also helped improve the scenario.'
'Allowing undisclosed money in stocks also boosted the individual investors, which is a positive indicator but it may not sustain for long,' he said.
Of the 263 issues traded in the week, 223 advanced, 39 declined, and one remain unchanged.
Source : New Age
