Dhaka, Bangladesh (BBN)-Bangladesh’s stocks ended higher last week that ended on Thursday, breaking two weeks losing spell as the central bank eased rules for banks’ investment in stocks.
The week featured five trading sessions as usual.
Of them, three sessions closed higher while two sessions saw marginal fall.
Both the Dhaka Stock Exchange, the prime bourse of Bangladesh, and Chittagong Stock Exchange, the port city bourse of the country, experienced upward trend.
The key index of Dhaka Stock Exchange (DSE) surged 87.45 points points and the port city bourse Chittagong Stock Exchange (CSE) earned 150.90 points.
The prime index of the Dhaka Stock Exchange (DSE) crossed the 4,600-mark last session of the week and settled the week at 4,608.32 points, surging 87.45 points or 1.93 per cent over the previous week.
The DS30 index, comprising blue chips, rose 27.69 points or 1.61 per cent to finish at 1,747.43 points.
The DSE Shariah Index advanced 15.89 points or 1.46 per cent to close the week at 1,106.48.
The port city bourse Chittagong Stock Exchange (CSE) also closed higher last week with its Selective Categories Index – CSCX – gaining 150.90 points or 1.69 per cent to end at 8,550.06 points over the previous week.
Trading activities also increased on the DSE and total turnover stood at BDT 21.86 billion, which was 79.19 percent higher than the previous week’s total turnover of BDT 12.20 as the bourse witnessed five sessions last week instead of previous week’s four.
The daily turnover averaged BDT 4.37 billion, which was 43.35 per cent higher than the previous week’s average of Tk 3.05 billion.
“The week, though decreased by 9.34 points at the beginning trading session of the week, turned around soon after Bangladesh Bank (BB) circulated revised rule related to banks’ exposure in the capital market,” said the LankaBangla Securities, a stockbroker, in its weekly analysis.
The previous rule stated that capital market exposure by any bank should not exceed 25 per cent of total capital on solo basis and 50 percent of total capital on cosolidated basis, whereas total capital included paid-up capital, share premium, statutory reserve, and retained earnings, said the stockbroker.
Banks’ equity investments to the subsidiaries related to capital market (investment in all kinds of shares, debentures, corporate bonds, mututal funds etc.) were considered as capital market exposure.
Banks were supposed to comply with the previous regulation by July 21, 2016.
Under the relaxed rules in effect from January 1, 2016, capital provided by banks to their subsidiaries will not be considered as a part of capital market exposure.
IDLC Investment, “The relaxation of banks’ capital market exposure limit came as a catalyst in the market, broadening clienteles’ investment scope further”.
“The news came as a sign of relief to the investors from the fear of anticipated institutional sales which was reflected in the market,” said the merchant bank.
Among the major gaining sectors NBFI gained 7.06 per cent followed by ceramic 3.68 per cent, textile 3.06 per cent and IT Sector 2.57 per cent.
The major losing sectors were mutual fund and pharmaceuticals with -1.26 per cent and 0.36 per cent loss respectively.
The gainers took a strong lead over the losers as out of 325 traded issues, 231 closed higher, 65 lower and 29 remained unchanged on the DSE trading floor last week.
Beximco Pharma dominated the week’s turnover chart for the second running weeks with shares of BDT 871 million changing hands during the week followed by Quasem Drycells, Beximco, KDS Accessories and Emerald Oil.
Baraka Power was the week’s best performer, posting a rise of 16.85 per cent while LR Global Bangladesh Mutual Fund one was the week’s worst loser, plunging by 10.14 per cent.