Dhaka, Bangladesh (BBN) – Dhaka stocks suffered the highest-ever fall last week, plunging 551 points, but recovery almost beat the disaster at the end.
Week-on-week, the benchmark index of the premier bourse, DSE General Index, declined only 98 points, or 1.2 percent, to 8,108, The Daily Star, a local newspaper, reported.
Angered by the index’s free fall from the opening bell of the last week, investors took to the streets.
“Apart from the inactive institutional participation due to the skyrocketing call money rate, the Sunday’s fall could largely be attributed to the rampant share sale by frightened small investors who never experienced such an abrupt correction,” LankaBangla Securities, a leading stockbroker, said in its weekly market analysis.
The declining Dhaka stocks rebounded with 304 points of increase on Monday, which was the highest-ever in 2010 and just second to the historical 764.87 points single-day hike on November 16 of 2009, the debut trading day of telecom giant Grameenphone.
“The regulator’s withdrawal of new directive to tight Dhaka Stock Exchange (Members’ Margin) Regulations, postponement of NAV-based margin loan calculation, hike of margin loan from 100 percent to 150 percent and bringing Grameenphone and Marico shares in the normal market contributed to this rally,” the LankaBangla said.
“Also Bangladesh Bank’s decision to ease the instable money market by limiting inter-bank call money rate to 50 percent and the directive to commercial banks deferring the time for adjusting industrial loan diversion fuelled this jump,” it said.
The initiatives taken by both Securities and Exchange Commission and the central bank kept pushing up the benchmark index of the premier bourse that gained Tuesday too.
The investors’ rush for heavy weight banks and telecom scrips led the rally.
On Wednesday, Dhaka stocks took a break from deep losses after rising for two days. The gauge seesawed whole the session and finally ended flat due to profit-taking, as the session was the maturity day for the stocks that were bought at a cheap level on the historic 551 points crash, according to the newspaper report.
In the pre-holiday session, stocks plunged 63.47 points after taking respite on previous day.
The total turnover value was 20 percent higher last week compared to the previous week, as there was one more trading session last week.
Losers beat advancers 193 to 53 with two securities remaining unchanged on the prime bourse.
On the other hand, Chittagong stocks, however, marked a sharp rise last week, with the CSE Selective Categories Index increasing 6.98 percent to 15,014.
Gainers beat losers 142 to 63, with four securities remaining unchanged on the Chittagong Stock Exchange.
BBN/SI/AD-26Dec10-1:58 am (BST)
