Stocks rise for eighth day

Stocks have continued to rise for the last eight days of trade due to increased participation of investors despite the coronavirus pandemic.

The DSEX, the benchmark index of Dhaka Stock Exchange (DSE), rose 63 points, or 1.16 per cent, to stand at 5,498.21 yesterday.

There are many reasons behind the recent jump of the market despite the ongoing pandemic, said Sayedur Rahman, president of Bangladesh Merchant Bankers Association.

The world stock market is in a peak position amidst the pandemic and even the Indian market is also at a high level, he said, adding that India was witnessing a devastating deterioration of the pandemic.

"It is influencing our investors positively," he said.

"Our financial sector has a huge amount of liquidity and deposit rate of the banking sector is very low so funds are coming to the stock market," he said.

As other investment places are not lucrative, stock market trade is possible sitting back at home so many investors are investing funds here, said Rahman, also managing director of EBL Securities.

On the other hand, many big companies declared higher earnings, especially banks which declared higher dividends this year, which positively impacted the market.

The market was impacted last year when trading was shut but this year investors have the assurance that the market will remain open.

The rising trend of the market also gave them a boost of confidence, he added.

Abdul Hakim, a stock investor, echoed the same saying investors were gaining confidence as the index has been on a rising trend over the last few days.

Investors invest if they see that the market has a positive momentum, he said, adding that it has a reverse effect, which means that when the index plunges, they panic and start selling shares.

Higher turnovers are also a reason for investors' being buoyant towards the market, he added.

Turnover, an important indicator of the market, surged 34 per cent to Tk 1,188 crore at the premier bourse.

DSE's former vice president Ahmed Rashid Lali said the investors regained confidence as the market has remained open.

On the other hand, banks are investing from their respective Tk 200 crore funds which was incentivised by Bangladesh Bank.

Corporates are also in a mood to invest, Lali said.

In the last few days the index rose slowly which means investors are also taking in profits. "This is a good sign," he said.

However, a top official of an asset management company said the market has a lower participation from the general participants.

Long-term investors and institutional investors are on the sidelines, he said, adding that some big investors were buying stocks.

The pandemic situation is at its worst in the neighbouring country, creating tension among institutional investors. Because, it can lead to a deterioration of the pandemic situation here anytime, he said.

Some big companies' earnings also did not turn out as per expectations. He cited the example of Grameenphone and Brac Bank.

Brac Bank's earnings dropped 10.7 per cent in 2020 compared to that in the previous year while GP's earnings per share (EPS) plunged 16 per cent in the January to March period of the current year.

Meghna Life Insurance Company topped the gainers' list rising 9.98 per cent followed by Agrani Insurance Company, Phoenix Insurance Company, Dominage Steel Building Systems and Provati Insurance Company.

Stocks of Beximco traded the highest, worth Tk 117 crore, followed by Beximco Pharmaceuticals, LafargeHolcim Bangladesh, LankaBangla Finance and Renata.

Keya Cosmetics shed the most, dropping 5.26 per cent, followed by Familytex BD, Paramount Insurance Company, Emerald Oil Industries and Rangpur Dairy and Food.

At the DSE, 201 stocks advanced, 78 declined and 78 remained unchanged.

The Chittagong Stock Exchange has also remained in an upward trend. The CASPI, the general index of the port city bourse, rose 143 points, or 0.91 per cent, to stand at 15,867.

Among 236 stocks to witness trade, 132 rose, 63 fell and 41 remained unchanged, shows the CSE data.