DSE key index sees biggest single-day jump in 2 years

Infographic: TBS

The benchmark index of the Dhaka Stock Exchange (DSE) surged by 123 points today, its highest single-day jump in two years, fuelled by investors' interest in lucrative stocks.

The previous biggest single-day gain by the DSEX was 153 points on 31 July 2022.

The DSEX reached a six-week high of 5,497 while the blue-chip index DS30 gained 38 points to close at 1,951 today.

The uptrend extended the key index's gaining spree for three consecutive sessions, during which the DSEX accumulated a total gain of 169 points. At those sessions, the market capitalisation of the DSE rose by around Tk10,500 crore to Tk6.71 lakh crore.

During yesterday's session, 365 scrips advanced, while 13 declined and 18 remained unchanged.

The turnover value also rose by 43%, reaching Tk770 crore against the previous session.

Meanwhile, the port city bourse, the Chittagong Stock Exchange (CSE), also settled in the green terrain. The major indices of the Chattogram bourse, CSCX, gained by 185 points to 9,315, and CASPI rose by 306 points to 15,463. The turnover at the CSE also jumped around 350% to reach Tk24.65 crore.

EBL Securities in its daily market review said the Dhaka stocks observed a sharp upturn owing to increased investor participation riding on rebounded optimism across the trading floor, along with some fresh fund injections following the refund amount of the latest IPO subscription hitting investor portfolios.

The market heated up as buyers remained predominant throughout the session, which led most of the scrips to witness price appreciations, adding further strength to the market recovery, it added.

Shakil Rizvi, a director at the DSE, told TBS that investors subscribed over Tk2,400 crore from the secondary market in the Techno Drugs IPO. "After the IPO shares allocation, the company refunded the unused funds to the respective investors starting Thursday. A percentage of these refunded funds were reinvested in the market, contributing to the index's gain."

Ashequr Rahman, managing director of Midway Securities, remarked, "We were surprised to observe a significant amount of funds being tied up in the Techno Drugs IPO. This indicates that investors were eager for IPOs, regardless of whether they were fundamentally strong or not." 

He added that the refunded amount from the latest IPO played a key role in the index's rise.

Top officials from several brokerage firms mentioned a rumour that the government is planning to take strict action against corruption played a role to send a positive vibes among the investors. Consequently, individuals with untaxed cash are starting to invest in the stock market, as it provides an easy and quick way to allocate their funds, they said. 

A senior officer of a brokerage firm explained that an investor can invest up to Tk8 lakh in cash daily through a BO account. "Therefore, if black money is being injected into the market, its impact will unfold gradually."

On the sectoral front, pharma issues exerted the highest turnover, followed by textile and bank sectors on the DSE.

Orion Pharma was the top-traded stock with a turnover value of Tk27.53 crore followed by BRAC Bank share with Tk19.94 crore and Sea Pearl Beach Resort with Tk17.21 crore.

All sectors displayed positive returns yesterday, with travel gaining 5.9%, services 4.8%, and non-bank financial institutions posting a 4.5% gain on the Dhaka bourse.

S Alam Cold Rolled topped the gainers table as its share price jumped by 10%, followed by Phoenix Finance, Prime Finance First Mutual Fund and Aftab Auto.

Rupali Life Insurance was the worst during the session, followed by Newline Clothing, Capitec Grameen Bank Growth Fund, BIFC and Peoples Insurance.