Analysts consider sliding treasury yields a boon to the stock market sentiment. The market also expects some undisclosed money and institutional funds following the adoption of a series of favourable policy measures
Market closed in green for the fifth consecutive session yesterday, with an encouraging recovery of daily turnover.
That the market has remained on an upward trajectory is attributable to an increasing participation of investors who are trying to find investment opportunities above the existing floor price level after the securities regulator hinted that investors would live with the special mechanism until the market gets its strength back.
DSEX, the broad-based benchmark at the Dhaka Stock Exchange (DSE) has closed at 4,099 on Sunday, up from 3,982 a week ago.
With return of some buyers daily turnover has now reached near Tk350 crore, which had dropped way below Tk100 crore amid buyers' reluctance in June.
Analysts are considering sliding treasury yields a boon to the stock market sentiment while the market is also expecting some undisclosed money and institutional funds following the taking up of a series of policy measures to help the stock market.
Government bonds act as a reference for interest rate and if the practical return rate goes down, alternative asset classes like stocks get a chance to attract more investments.
The yields on treasury bills slid in June this year over the same period of a year earlier, according to Bangladesh Bank data. The falling trend of the same is also continuing this month amid fears that the profitability of banks would edge down, reads a research note of brokerage firm United Securities Ltd.
Meanwhile, both the Bangladesh Securities and Exchange Commission (BSEC) and the Bangladesh Bank are in an effort to encourage commercial banks to buy stocks with part of the Tk200 crore special funds each bank can build as outlined at the beginning of the year.
Over a week, public market transaction widely surpassed block market transactions and indicates return of spontaneous participation of general investors – the normalcy.
Analysts at UCB Capital explained the green as a reflection of investors' optimism owing to gradual reopening of the economy and revival of some specific sectors' activity.
At the DSE, of the Tk347-crore turnover, less than Tk40 crore was block market's contribution on Sunday. At the extreme of low liquidity in June near half of the market transaction went into block market where large scale buyers and sellers complete transactions at a predetermined price bypassing the regular ask and bids in public market.
Against a 0.93 percent gain in the broad-based index, Shariah index DSES has gained 1.7 percent while blue-chip index DS 30 rose 1.05 percent to close at 1383.71.
All the indices in the first half of the session had suffered a slight correction and later recovered with further points added.
EBL Securities in its daily market commentary interpreted it as investors' effort to reshuffle their portfolios at the lowest possible prices within the limits of floor price system.
However, the pharmaceuticals and chemicals sector registered the highest turnover—over 30 percent of the total. The engineering, fuel and power sector followed with occupying around 10 percent of the day's trades.
Among all the sectors, the telecommunication sector with a 2 percent rise topped the gainers' chart, followed by pharmaceuticals and IT stocks.
All the three sectors are perceived to save their backs most during the pandemic and so far with potentials increased for the smart companies.
On the other hand, general insurance displayed the maximum price correction—0.6 percent-- after moderate upward movement recently.
At the premier bourse, out of 349 scrips traded, 122 advanced, 59 declined and prices of 168 securities remained unchanged.
Chittagong Stock Exchange also registered an upward trend at the end of the session. CSCX and CASPI the two major indices there increased by 0.8 percent and 0.7 percent respectively.
Turnover at the port city bourse crossed Tk15 crore on the day.