Stocks rally amid higher turnover

FE Report

Dhaka stocks bounced back strongly with substantial rise of turnover in the week that ended Thursday, breaking several weeks of losing streak as investors' confidence was boosted by the central bank's apparent flexibility and government's positive measures.

Participation of both individual and institutional investors are rising gradually following the government's positive steps regarding stock market, said a stock broker.

Meanwhile, the government appointed two new SEC members Sunday -- former Bangladesh Bank Executive Director Mohammed Amzad Hossain and former president of Bangladesh Merchant Bankers' Association Arif Khan. These appointments also made positive impact among the investors.

Out of five trading sessions in the week, except Wednesday, all sessions gained strongly.

During the week, the benchmark general index DGEN, the yardstick of the market rose 365.09 points or 6.76 per cent and closed at 5,762.71.

The broader DSE All Shares Price Index (DSI) ended at 4,799.21 up by 302.30 points or 6.72 per cent. The DSE-20 index including blue chips also rose 214.98 points or 6.00 per cent to close at 3,799.67.

Amid greater participation from the institutional and small investors turnover increased substantially in the week and stood at Tk 25.1 billion (US$ 353.8 million). This was also the highest weekly turnover in the last five weeks.

Average daily turnover for the week was Tk 5.02 billion (US$ 70.8 million), which was 43.1 per cent higher than the previous week.

The market capitalization was Tk 2,556.10 billion in the opening day of the week and at the end of the week, it stood at Tk 2,686.31 billion, which was 5.09 per cent higher.

Out of 266 issues traded, 239 advanced, only 26 declined and one remained unchanged during the week.

All the sectors closed higher in the week with service and real estate sector was the week's biggest gainer, posting 12.83 per cent rise.

Banking sector gained 9.45 per cent and NBFIs gained 9.03 per cent. Banks, as a sector, had the highest average daily turnover in the week at Tk 918.6 million per day, followed by NBFIs at 670.0 million per day.

Among the notable gainers -- general insurance advanced 5.27 per cent, life insurance 7.78 per cent, mutual fund 3.72 per cent, telecommunications 3.43 per cent, pharmaceuticals 2.46 per cent, fuel and power 5.96 per cent, cement 3.30 per cent, ceramics 6.51 per cent and textile 3.29 per cent.

MI Cement Factory Limited topped the week's turnover list with shares worth Tk 845.20 million changing hands.

It was followed by United Airways, BSRM Steels, Peoples Leasing, Titas Gas, UCBL, LankaBangla Finance, Aftab Automobiles, National Bank and Beximco Limited.

Eastern Housing was the week's top gainer posting 26.56 per cent rise during the week.

It was followed by ILFSL, MIDAS Financing Ltd, LankaBangla Finance, FAS Finance & Investment Limited, UCBL, National Housing Finance and Investments Limited, Islamic Finance, IFIC Bank and Jamuna Oil.

Anwar Galvanizing was the week's top loser, losing 39.01 per cent during the week.

It was followed by Alltex Industries Ltd, Dulamia Cotton, National Tea, Legacy Footwear, Janata Insurance, Provati Insurance Company Limited, Phoenix Finance 1st Mutual Fund, Republic Insurance Company Limited and Mithun Knitting.

A total of three companies announced corporate declaration during the week.

Delta Life Insurance recommended 30 per cent cash and 20 per cent stock dividend, Eastern Cables recommended 10 per cent cash dividend and Salvo Chemicals recommended 5 per cent stock dividend for the year that ended December 31, 2010.

Meanwhile, the Dhaka Stock Exchange (DSE) finally gave listing permission to the MJL Bangladesh Limited on Wednesday. The company will be listed at an indicative price of Tk 115 per share.

Previously, MJL Ltd raised money from the investors at an indicative price of Tk 152.40 under the book building method. The company declared to return the rest of money through the refund warrant to the investors very soon.

In another development, a group of investors -- under the banner of 'Bangladesh Sharebazar Oikya Parishad' are observing sit-in programme in front of the main building of the bourse from May 26.

The leaders of the organization said that their programme will continue demanding capital market-friendly budget until the national budget is announced.

The finance minister AMA Muhith is scheduled to announce the FY-2011-2012 national budget on June 9.

The market opened the week with positive note Sunday and closed 92.26 points or 1.70 per cent higher following the news of central bank's positive measures over extending time to bring down banks "single borrower exposure limit".

The central bank extended time to bring down banks "single borrower exposure limit" by six months to December.