Shares hit record highs

Dhaka shares moved up for the seventh week last week to extend record highs as investors continued to buy shares, encouraged by the relentless rally of recent days.

DSEX, the main index of the Dhaka Stock Exchange, rose 1.57 percent or 103.31 points last week, closing on August 12, the last trading session of the week, at 6,699.39 points.

The index gained 648 points in the past eight weeks, reaching a record high on August 12.

In 2013, the exchange launched the index under a free-float methodology developed by Standard and Poor’s, replacing the then key index of the exchange, DGEN. The DGEN stood at 4,171.41 points when the DSEX launched in 2013.

The DSEX rose 1,447 points in the past 18 weeks with just one negative week, its longest run since 2010.

The market remained closed on August 8 in line with the Bangladesh Bank’s decision to keep banks closed for two days amid Covid restrictions.

The core index rose in three sessions during the four-day week as investors continued to buy stocks with expectations of further gains, market operators said.

Investors were a little nervous at first when the BB decided to clean up excess liquidity by issuing BB notes.

As part of the initiative, the central bank issued BB notes worth 2,605 crore Tk on August 9 and 6,070 crore Tk on August 11.

On August 8, the central bank asked all banks to offer interest rates for individual time deposits that exceed inflation.

In addition, the Bangladesh Securities and Exchange Commission opened an investigation into the abnormal rise in the share prices of nine companies, including Fu-Wang Food, Emerald Oil and Beacon Pharmaceuticals, which caused investors to be cautious on the trading floor.

However, the market recovered strongly towards the end of the week as investors regained confidence despite the unfavorable effects of BB’s moves on the stock market.

The continued gains caught the attention of many new investors and provoked them to inject funds into the stock market, the market operators said.

EBL Securities said in its weekly market commentary: “While the market saw limited earnings postings and portfolio shifts from investors this week, investors were generally busy buying potential stocks.”

Given the impact of the coronavirus, institutions and high net worth individuals have fewer options to invest their inactive funds and find the stock market a lucrative option to invest and make quick money, they said.

The market cap on the DSE reached Tk 5.47 lakh crore on August 12 and hit a new all-time high.

South Bangla Agriculture and Commerce Bank, which made its debut on August 11, rose by the maximum allowable limit in the last two sessions, closing at Tk 12.1 per share on August 12.

Average share prices of various non-bank financial institutions, textile and pharmaceutical sectors rose by 5.6 percent, 5.2 percent, 3.5 percent and 1.6 percent, respectively.

Of the 378 scrips traded on the DSE this week, 188 advanced, 178 fell and 12 remained unchanged.

Average sales on the DSE rose to 2,663.54 crore Tk last week compared to 2,337.99 crore in the previous week.

DSE’s blue-chip index DS30 added 1.75 percent, or 41.68 points, to finish at 2,427.57 points.

Shariah Index DSES also gained 1.37 percent, or 19.69 points, last week, closing at 1,459.04 points.

Both the DS30 and DSES index reached a record high on August 12.

BEXIMCO led the turnover chart for the past week with its shares worth Tk 780 crore switching hands.

IFIC Bank, LankaBangla Finance, Orion Pharmaceuticals, LafargeHolcim Bangladesh, Malek Spinning Mills, GPH Ispat, Appollo Ispat Complex, Beximco Pharmaceuticals and Islamic Finance and Investment were the other revenue leaders for the week.