Dhaka stocks on Thursday maintained heavy gains for the third consecutive day with the bourse's turnover hitting a three-and-a-half-month high of Tk 1,348.33 crore as the investors continued with post-budget buying spree.
The benchmark general index of Dhaka Stocks Exchange, or DGEN, on Thursday gained 68.47 points, or 1.09 per cent, to close at 6,311.80 points.
The DGEN advanced by 342 points since the Finance Bill 2011 was passed in parliament on June 28 allowing legalisation of undisclosed money by investing in the capital market paying a 10 per cent tax.
The DSE turnover also increased significantly in the last one week crossing Tk 1,000 mark twice before hitting three and a half month high on Thursday as investors rejuvenated by the hope of increased liquidity supply in the market went for heavy buying. The turnover of the DSE was Tk 1,592.60 crore on March 21.
Of the 262 issues traded on Thursday, 192 advanced, 60 declined, and 10 remained unchanged.
Market operators said the investors continued to buy heavily on Thursday hoping that the current gain would be sustainable as the government specified that investors must keep the undisclosed money invested in stocks till June 2013 to avail the opportunity of legalising their money by paying 10 per cent tax.
There is also a speculation among the investors that Bangladesh Bank's monetary policy for the current fiscal year would also be capital market friendly.
'Investors are getting back their confidence which was shattered in prolonged volatility and depression in the market for last six months. Participation of institutional investors has also increased in last few days,' said a stockbroker.
Mahmood Osman Imam, a professor of finance at Dhaka University, said, 'The market trend in recent time is positive as the growth is gradual and substantial.'
'But it's hard to say whether is has been stabilised at this point. The trade volume rose to a substantial level but we need to see that if it continues like this for next two weeks or one month.'
Mahmood said that the recent bullish trend occurred because of a combined effort of all the stakeholders including Securities and Exchange Commission, Bangladesh Bank, ministry of finance and the Dhaka and Chittagong Stock Exchanges.
'If the coordination among these institutions continues then the positive trend may sustain for long,' he added.
The bourse's turnover earlier hit an all-time high of Tk 3,249.57 crore on December 5, when the market witnessed a boom, but plunged to Tk 206.41 crore on January 25 following a series of huge stock crashes that discouraged the investors from trading.
A liquidity crisis also hit the market at that time as most of the banks as well as other large investors withdrew their huge investments in December pocketing hefty profits.
After the dull period of January-February, the market began to get back onto the track in March, when the turnover crossed the Tk 1,000 crore mark for the first time after crashes.
The turnover of the DSE rose to Tk 1,592.60 crore on March 21 when the index was at 6,528.20 points.
But the market started to slip again in mid-April as investors became panicked once more following uncertainty over implementation of the recommendations of the probe committee on January's stocks scam.
On May 26 the turnover of the bourse plunged to Tk 296.49 crore as panic-gripped investors remained almost inactive and a fresh liquidity crisis seized the market.
The market, however, started to go up just before the passage of the finance bill with the average daily turnover rising to Tk 800.55 crore.
Source : New Age
