Shares on the Dhaka Stock Exchange (DSE) continued their upward movement yesterday, buoyed by investors’ cheerful participation, helping the key indices set new records.
The DSEX, the benchmark index of the premier bourse of the country, surged 65 points, or 0.92 per cent, to end the day at 7,140, the highest on record.
The DS-30, the blue-chip index, gained 37 points to reach a new high of 2,583.
“The market has not become overvalued yet as many stocks are available at lucrative prices, and the money market has enough liquidity,” said Ahsanur Rahman, chief executive officer of Brac EPL Stock Brokerage.
“The market should get further momentum,” he said, adding that some low paid-up capital-based companies were over-priced, though. The stocks of well-performing companies also rose as investors were rearranging their portfolios and cutting risks, he said.
“This is a good sign.”
Investors are pretty optimistic about the future of the market as the banking sector had huge liquidity and the monetary policy was also favourable to inject funds in the market, said a merchant banker.
The excess liquidity in the banking system stood at Tk 231,462 crore as of June, up 66 per cent year-on-year, because of the lower credit demand, central bank data showed.
“Investors’ confidence is high. This is something that ultimately impacts the market positively,” the merchant banker said.
He also sounded the alarm about the low paid-up capital-based and low-performing companies as they were already overvalued.
“Investors should be careful,” he added. Turnover, an important indicator of the market, fell to Tk 2,866 crore yesterday from Tk 2,901 crore on the previous day.
On the DSE, 177 stocks advanced, 167 fell, and 30 remained unchanged.
Tamijuddin Textile topped the gainers’ list for the second day running, rising 9.94 per cent, followed by Samata Leather, Khulna Power Company, Dominage Steel, and FAS Finance.
ICB 3rd NRB shed the most as it lost 6.57 per cent, followed by Prime Bank 1st ICB AMCL Mutual Fund.
The shares of Beximco Ltd were the most-traded stock, with securities worth Tk 132 crore changing hands.
Though the junk stocks were overvalued, they were still surging. “This is not welcoming at all,” said a stockbroker.
“These stocks may create a bitter situation for the market as general investors will lose their hard-earned money when they fall.”
The stocks continued the bull-run for the six consecutive sessions as the bargain hunters sustained their buying appetite amidst enthusiastic participation, said International Leasing Securities Ltd in an analysis.
Following the last session, the market opened on a flying note, and the momentum continued till the end of the day as the cheerful investors put fresh bets on the large-cap stocks, it said.
The buoyant investors exerted their interest following news that the private sector credit flow marked a positive growth for two months in a row on the back of the resumption of economic activities following the countrywide coronavirus vaccine rollout, it added.
The private sector credit growth decelerated to 7.55 per cent in May, the lowest in at least 28 years, due to the depressed demand for loans amid the Covid-19 pandemic.
But it rose to 8.35 per cent in June and 8.38 per cent in July, Bangladesh Bank data showed.
The Chittagong Stock Exchange (CSE) also rose.
The CASPI, the general index of the bourse in the port city, edged up 134 points, or 0.65 per cent, to 20,797.
On the CSE, 138 stocks advanced, 152 declined, and 38 were unchanged.
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