DSE sees record market capitalisation

One day after falling, indices of both the stock exchanges soared on Thursday, with Dhaka Stock Exchange's market capitalisation hitting the Tk5 lakh crore-mark for the first time in its history.

The DSEX, the benchmark index of the DSE, also crossed the 5,900-mark after two years.

Analysts have linked the rise with the investors' growing confidence in securities regulator's decisions, including the one capping interest rate of margin loans.

EBL Securities' daily market review said, "Investors' positive expectations towards the capital market remained persistent primarily backed by favorable macroeconomic outlook and continuous efforts by the securities regulator which translated into rising market participation and much-needed confidence."

At the end of yesterday's trading session, the DSEX rose by 2.41%, while the Shariah index DSES gained 1.68% and the blue-chip index DS30 jumped by 3.56%.

But, the turnover, one of the major indicators of the stock market, of the DSE fell by 2% to Tk2,070 crore.

Meanwhile, the port city bourse Chittagong Stock Exchange's (CSE) main index Caspi also jumped by 2.51% to 17,219.

Banks contributed the highest turnover – 13.43% – to the DSE's total turnover, followed by fuel and power, and pharmaceuticals sectors.

The Beximco Limited dominated the scrip-wise turnover board and contributed 8.94% of the total turnover, followed by Beximco Pharma and Robi.

Investors have received the highest return – 6.6% – from the miscellaneous sector, followed by the cement and jute sectors.

Mohammad Musa, professor at the School of Business and Economics of the United International University, sees two reasons behind the rise of stocks at the capital market. 

One of the reasons is that the securities regulator has set the interest rate for the margin loan at maximum 12% and the other reason is that they postponed the directive regarding the investigation into abnormal price hikes of the shares of listed companies, he said.

"The new leaders at the BSEC (Bangladesh Securities and Exchange Commission) have secured the general investors' trust. That is why they invest more in the capital market," Professor Musa told The Business Standard.

The AFC Asia Frontier Fund found that most of its larger markets made good gains in December last year and the Bangladesh market made a gain of 11%.

The Asia Frontier Capital Ltd, an investment company based in Hong Kong, manages various funds, namely AFC Asia Frontier Fund, AFC Iraq Fund, AFC Uzbekistan Fund, and AFC Vietnam Fund.

Findings of a research conducted by the AFC Asia Frontier Fund, released on 13 January this year, showed that the lower interest rate, increasing exports and remittances and the reopening of the economy have led to this rally in the DSE.

BSEC Chairman Professor Shibli Rubayat-Ul-Islam said although the economies of other countries of the world have been severely affected by the Covid-19 pandemic, the economy of Bangladesh is in a better position than them.

He said, "The GDP growth over the past year has been much better than that in other countries even amid the pandemic. And the better economic indicators have had a positive effect on the capital market as well."

"In recent times several steps have been taken to develop the capital market and boost the investors' confidence. Steps are being taken to establish good governance in the listed companies. Overall, the commission is working to build an investor-friendly capital market in the future," the  BSEC chairman added.

The GBB Power secured the top position in the gainers' table. Its share price rose by 10% to Tk22 each, followed by the Powergrid and Beximco Limited.

Zeal Bangla Sugar, which was under "Z" category, was on top of the losers' list. Its share price fell by 8.18% to Tk157.1 each.

Out of the 362 issues traded yesterday at the DSE, 159 advanced, 133 declined, and 70 remained unchanged.