DSEX closes near 7,000

Stocks at both Dhaka and Chattogram bourses are on a steady rise as a buying spree continues amid the increasing participation of investors.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), rose near to the 7,000 mark at the end of the week.

In continuation to the two previous sessions' bull run, the broad-based stock index gained 0.94% on Thursday to close at 6,981 – the record high for the index launched in 2013 to carry the baton of its predecessor broad index DGEN.     

DGEN, however, raced to 9,000 before the 2010 market crash.

DSEX's record rise resulted in a record-high market capitalisation at the DSE that crossed Tk5.63 lakh crore on Thursday.  

Investors' anticipation for DSEX to cross the mark of  7,000 soon appeared to be stronger over the week, observed EBL Securities analysts.

The rallies observed across the trading board of the bourses as investors' enthusiasm pushed 237 of the DSE scrips higher against a correction in 105 of the scrips, while the price of 31 remained unchanged on Thursday.

Analysts thank regulatory measures to make the directors of the poorly governed or performing listed firms accountable to their public shareholders as investors are demonstrating more confidence in low-cap scrips.

Top gaining charts were widely dominated by low-cap companies over the week, which also emerged as a concern for the market observers, who care about a company fundamental's relationship with stock prices.

But participation at the bourses barely reflected any such concern as the DSE registered more than Tk2,474 crore in daily turnover on Thursday which is 4.56% more than the previous session.

Blue-chip index DS30 underperformed its broad-based peer on Thursday as it gained 0.89% to close at 2,496.

Also, the year-to-date return of the indices demonstrates the market's bias for non-selective stocks as DS30 gained 27.13% and Shariah index DSES 21.46% since 1 January, while the broad-based index gained 29.23%.

Analysts said the market more than recovered from its recent short spell of correction, mainly as the securities regulator is trying to ensure investors' confidence in multiple ways, that also includes raising the index slab to 8,000 from 7,000 to allow investors to avail 50% margin loans against their equity.

The Bangladesh Securities and Exchange Commission's apparent stance to prefer individual investors to grab opportunities in the stock market is also another factor that boosted retail investors' confidence in the market.

The regulator this week increased the quota for individual investors for allocating primary shares, which are unusually popular in Bangladesh due to their low perceived risk against the return records at debut.

Of the sectors, mutual funds, non-bank financial institutions, telecommunication, service and real estate suffered price correction, while all other sectors closed in a green territory with jute, general insurance, tannery, cement, ceramic, miscellaneous, and paper printings market capitalisation grew by more than 5%.