Bargain hunters help stocks’ partial recovery

Stocks partially recovered the prices they lost in the two-day selloff and indices at the Dhaka and Chattogram bourses rose by 2-3% on Tuesday.

This was due to bargain hunters who did not want to miss out on the opportunity to buy some stocks at a cheaper price.

However, their enthusiasm failed to surpass sellers' caution over the previous two sessions as turnover at the Dhaka Stock Exchange (DSE) declined by 13.5% on Tuesday.

DSEX, the broad-based index at the capital city bourse, rose by 2.27% to close at 5,499 points, following a 2.3% and 2.7% fall in the previous sessions, respectively.

EBL Securities wrote in its daily market recap that as the index had lost over 533 points in the last three weeks, a section of investors decided to apply buying pressure on Tuesday as they deemed the prices of the stocks were in a lucrative position.

Market professionals also said the ongoing road show in Dubai, which began on Tuesday, helped recover investors' optimism as the regulator and the industry are jointly promoting Bangladesh's capital market abroad – which could attract foreign and non-resident Bangladeshi investors.

Moreover, the inauguration of online investment increased the optimism that the market is likely to get more investors in the coming days.

"However, investors also stayed cautious today [Tuesday] and mainly took a sideline approach in light of the ongoing market volatility," read the EBL Securities Research review.

DSE turnover declined to Tk683 crore, which went up to nearly Tk790 during the sale pressure on Monday.

As the blue-chip indices led the recent sharp fall over Sunday and Monday, the same recovered more in terms of percentage points.

DS30, the Dhaka bourse index of selective stocks, rose by 3.1% to 2,086 points on Tuesday, while Shariah-compliant securities index, DSES, increased by 2.04%.

Of the sectors, none lost market capitalisation on Tuesday; while services, miscellaneous, cement, financial institutions, and telecommunications led the rise with a 4-7% increase in market capitalisation over the session.

Bank, paper and printing, travel and leisure, as well as food are the only sectors that witnessed a less than 1% rise in market capitalisation.

The pharmaceutical, miscellaneous, food, and banking sectors led the table of turnover contribution, occupying more than half of the day's trading.

Of the 349 issues traded, 240 advanced, 17 declined and 92 remained unchanged at the DSE.

Meanwhile, the Chittagong Stock Exchange saw a 2.5% or more rise in its indices, but its turnover declined by 30%.