The general index of Dhaka Stock Exchange on Sunday hit a three-month high, with the turnover climbing to a six-month peak, as the investors went on a buying binge driven by the hope that investment of undisclosed money in the market was around the corner.
The DGEN, the benchmark index of the bourse, gained 125.70 points, or 1.99 per cent, to close the day at 6,437.50 points, the highest level it had risen to since reaching 6,556.52 points on April 10.
The turnover of the bourse shot up to a whopping Tk 1,646.15 crore on the day from that of Tk 1,348.33 crore of the previous day. The DSE had a turnover of Tk 1,649.76 crore, slightly higher than Sunday's, on January 12, with the DGEN standing at 7,690.68 points.
In the past week, the average daily turnover of the bourse crossed the Tk 1,000-crore mark again after three months of volatile trading in a depressed market.
Market operators said investors on Sunday went for heavy buying as they had regained confidence in the market to a large extent and became active again.
They said an increased institutional participation in trading also helped boost the share market.
The DGEN started to rise steadily one week ahead of the passage of the current national budget in the parliament on June 29 as the investors anticipated that the government was going to allow investment of undisclosed money in the capital market. In the previous six months, the DSE general index had suffered a number of plunges, sliding from 8,918.51 points on December 5 to its rock bottom at 5,203.04 points on February 28.
The turnover of the bourse also had nosedived to Tk 296 crore on May 26 from around Tk 3,200 crore on December 5.
But, since the passage of the budget with a provision for allowing investment of undisclosed money in the capital market the DGEN has gained 399 points till Sunday.
Investors are also speculating that the Bangladesh Bank may announce soon a capital market-friendly monetary policy for the first half of the current fiscal year, said market operators. 'That's one of the key reasons why institutional investors have returned to active trading,' said a DSE stockbroker.
The trading on the DSE floor started on a positive note on Sunday that sustained till the closing bell rang.
Banks, insurance companies, and financial institutions were the hot items of the day as most of these issues posted a sharp gain.
Mahmood Osman Imam, director of Bureau of Business Research of Dhaka University, said, 'Institutions have been actively participating in the capital market recently as they hope the monetary policy will address the capital market positively.'
He said, 'If institutional investments are made by the mutual funds and merchant banks that would be positive for the market in the long run. On the other hand, if commercial banks increase their involvement in the equities market by making bulk investments, it will not sustain for long as their attitude is more like a trader than an investor.'
Mahmood, a finance professor, said, 'Bank issues are gaining as the investors are optimistic about their prospect following news reports of healthy quarterly earnings of a large number of banks during the depression.'
He, however, pointed out that the recent market trend showed the banks with low paid-up capital were gaining more than those with high paid-up capital.
Of the 264 issues traded on Sunday, 190 advanced, 66 declined, and eight remained unchanged.
Bextex topped the turnover leaders of the day with shares worth Tk 47.99 crore changing hands. The rest of the top-10 turnover leaders were Lafarge Surma Cement, Beximco, One Bank, BSRM Steels, United Airways, United Commercial Bank, Mercantile Bank, Titas Gas, Southeast Bank.
Source : New Age
