Retailers trade at Dhaka Stock Exchange office. BBN file photo

Dhaka, Bangladesh (BBN)– Bangladesh’s stocks extended the winning streak for the second week that ended on Thursday with increased participation of investors backed by government measures to mitigate liquidity crunch.

Analysts said the optimistic investors showed their buying appetite on large-cap stocks, especially financial issues, encouraged by the government’s steps to mitigate the ongoing liquidity crunch.

They said buying spree was spurred mainly by government’s steps to ease the ongoing liquidity crisis coupled with lucrative pricing level in fundamentally sound issues.

For easing the ongoing liquidity crisis, the government allowed its agencies to deposit 50 percent of their funds with private banks, which was previously 25 percent and slashed the cash reserve requirement (CRR) by 1.0 percent point to 5.5 percent, which enhanced the investors’ optimism to the market.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), settled at 5,841 points, soaring 244 points or 4.35 percent over the previous week.

The week featured five trading sessions as usual. Four, out of five sessions closed higher.

Two other indices also saw significant gain with the DS30 index, comprising blue chips, soared 88 points to finish at 2,194 and the DSES (Shariah) index jumped 42 points to settle at 1,356.

Port city bourse the Chittagong Stock Exchange (CSE) also ended higher with the CSE All Share Price Index – CASPI – soaring 802 points to settle at 18,017 and Selective Categories Index – CSCX –gaining 488 points to close at 10,891 points.

Turnover, another important indicator of the market, stood at BDT 27.15 billion last week against BDT 12.83 billion in the week before.

The daily turnover averaged BDT 5.43 billion, which was 69 percent higher than the previous week’s average of BDT 3.21 billion.

According to EBL Securities, the investors started to exhibit their active participation as they regained confidence to the market riding on the government’s various steps, like reducing cash reserve requirement to increase fund flow in the market.

“The prime index posted the highest weekly return of 4.35 percent since its inception in January 2013 as the optimistic investors showed their buying appetite amid favorable measures taken by the government,” commented International Leasing Securities, in its weekly market analysis.

The stockbroker noted that the non-bank financial institutions and banking sectors witnessed buying spree as those regulatory changes have direct impact in these sectors.

Accordingly, the financial stocks posted the highest gain of 10.30 percent and the banking sector soared 5.20 percent.

The gainers took a strong lead over the losers as out of 340 issues traded, 294 advanced, 33 declined and 13 issues remained unchanged on the DSE floor.

Beximco topped the turnover chart with 39.20 million shares worth BDT 1.05 billion changing hands, closely followed by BRAC Bank, IFAD Autos, LankaBangla Finance and Unique Hotel & Resorts.

Monno Jute Stafflers was the week’s best performer, posting a gain of 41.86 per cent while the Nitol Insurance was the week’s worst loser, losing 16.06 per cent.