The Bangladesh Bank has decided to cut policy rates and the bank rate to improve the liquidity flow in the money market
The key indices of the country's two main bourses saw a big rise on Thursday as the investors were happy with the new monetary policy.
The investors' enthusiasm grew as the Bangladesh Bank had decided to cut policy rates and the bank rate to improve the liquidity flow in the money market, according to the Daily Market Review of EBL Securities Ltd.
On July 29, the central bank declared monetary policy for the next six months where bank rate was brought down to 4 percent from existing 5 percent.
It also proposed a cut in the repo rate from 5.25 percent to 4.75 percent and reverse repo rate from 4.75 percent to 4 percent to make funds available for banks at a cheaper rate.
The Bangladesh Bank also set a 14.8 growth target for the private sector and 44.4 percent for the public sector in the monetary policy.
While talking to a few asset managers and investment bankers, it was learned that institutional investors can now get money at a cheaper rate for investing in the capital market.
The DSEX, benchmark index of the Dhaka Stock Exchange, extended its gaining streak for six consecutive sessions and went up by 43.22 points or 1.04 percent. And it settled at 4214.43 points at the end of the trading session.
Also, the Shariah-based DSES index gained 11.84 points to settle at 976 and the blue-chip index DS30 rose by 18.84 points to close at 1,420.
The stock exchange trading floor saw an unprecedented upsurge in turnover – 45.4 percent to Tk580.90 crore – on Thursday which led to a rise in the index.
The investors mostly showed interest in pharmaceuticals, general insurance, and textile sectors.
British American Tobacco Bangladesh topped the scrip-wise turnover board and contributed 8.56 percent of the total.
However, all the sectors showed encouraging performance on Thursday . Out of 348 issues traded, 162 issues rose, 58 fell, and 128 remained unchanged.
The Chittagong Stock Exchange also registered an upward trend at the end of the session. The select index CASPI rose by 82.2 points to settle at 11,957.