DSEX jumps to 47-day high

Highlights:

• Second biggest rise since reopening on May 31
• DSEX has had a rally of 550 points since March 18
• Nearly two-thirds of scrips now have both buyers and sellers
• Appetite increased for selective stocks
• DSE turnover increased 42%

Stocks gained further strength on Sunday amid increased market confidence.

DSEX, the broad-based benchmark at the Dhaka Stock Exchange, gained 1.18 percent – the second biggest green day since the market reopened on May 31.

The index closed at 4129 points, the highest since March 15 this year.

Market professionals have attributed the increased investor optimism in the stock market to some recent regulatory steps against various securities misconduct.

Alongside, the static Covid-19 curve is playing a role in increasing the confidence of investors who are looking for bargains at the stock market.

When majority investors have been in fear of worsened corporate performance, some large-cap blue-chip companies, which are posting or are expected to post satisfactory corporate results, also have a big contribution to increasing investor confidence.

The market focus hints that some institutional funds are in action, said a floor trader at one of the top-five brokerage firms.

The securities regulator and the central bank are jointly trying to increase the flow of institutional funds to bring the stock market on track.

DSEX has already had a rally of around 550 points since March 18, when the market was in a free fall and the regulator came up with the floor pricing mechanism to arrest the fall.

Initially, the market was facing scarcity of buyers at the popped up prices, and the daily turnover came down to below Tk100 crore.

The sector and equity specific buying appetite has now increased daily trade volume and turnover. DSE witnessed Tk371 core in turnover on Sunday, a 42 percent increase from the previous session.

Of the 359 scrips at the DSE, more than 220 have already welcomed both buyers and sellers above the floor price level, while the scrips still stuck at floor price are mainly concentrated in the engineering and the cement sectors.

A number of banking and non-banking financial institutions' stocks are also stuck on the floor price, either because of their post-dividend price adjustment or the perceived uncertainty about their business performance in coming days.

Pharmaceuticals, general insurance, food and allied, textile, telecommunication, fuel and power, engineering and IT sector dominated the trading board on Sunday.  Out of these, only textile lost market capitalisation due to investors' worry about the sectors' level of resilience right now.

According to UCB Capital daily market summary report, the food and allied sector witnessed the highest gain – 3.77 percent.

Thanks to investors' increased appetite for FMCG (fast moving consumer goods) stocks which are showing more resilience than industrial and durable consumer product companies.

Focus on selective stocks like Grameenphone, Square Pharmaceuticals, ACI, Olympic Industries helped the blue-chip index gain more than the broad-based indices at the premier bourse.

Dhaka's blue-chip index DS 30 increased 1.68 percent to close at 1,397 while Shariah index DSES gained 1.85 percent.

In the Chittagong Stock Exchange (CSE), turnover increased to Tk7.8 crore, up from 5.37 crore in the previous session.

At the port-city bourse, broad-base indices gained more than the selective stocks in contrast while the all shares price index CASPI and broad-based index CSCX both witnessed the highest gain of 0.12 percent.

At the CSE, 75 scrips gained, 29 lost and price of 98 were unchanged, while DSE saw 116 gainers, 58 losers and 172 scrips remain unchanged.