POST-POLLS MARKET: Stocks surge 1.5pc on optimism

Dhaka stocks surged yesterday as investors reacted positively to the election outcome.

On the first trading day after the national polls, DSEX, the benchmark index of Dhaka Stock Exchange, jumped 79.61 points, or 1.48 percent, which is the biggest increase on a single day in nine months.

The key index of the market has been rising continuously in the last nine working days: it rose 247.24 points, or 4.74 percent, to 4,465.25 points -- the highest in the last four and a half months.

Analysts are optimistic about the market riding on political stability and more sound business activities in the coming years.

The peaceful election has boosted the confidence of investors, so the market is starting to reflect that, said KAM Majedur Rahman, managing director of the DSE.

“The new year will be a good one for the stock investors,” he added.

Khairul Bashar Abu Taher Mohammed, secretary general of Bangladesh Merchant Bankers Association, echoed the same. 

The new year would be a positive one for the stock market if the upward movement continues and it gets policy support from the central bank.

Most of the investors are investing now to make gains in the short run as stocks have become cheap because of a recent drastic fall, said the managing director of a leading stock brokerage firm wishing to remain unnamed.

“So, it is too early to say that the confidence has returned among the investors.”

Since investors faced huge losses last year they are inclined to be more cautious this year, he added.

Stock investors saw the value of their investment shed by Tk 36,128 crore last year thanks to the political tension centring on the 11th general election.

At the end of 2018, the DSE's market capitalisation stood at Tk 387,295 crore, in contrast to Tk 423,423 crore on the first day of 2018.

During the year, the DSEX fell 858.88 points, or 13.75 percent, to 5,385.65 points, while the blue chip stocks lost 17.63 percent to reach 1,880.78 points.

“Market was sluggish during the year due to political jitters. It has not fallen due to any crisis in the market,” Rahman said.

The pre and post-election situations were peaceful, so investors will be confident of investing in the market now, especially foreign investors.

The DSE chief blamed political jitters on the slump in foreign investment last year. Net foreign portfolio investment plunged to Tk 593.47 crore in the negative in 2018, which was Tk 1,704.95 crore in the positive the previous year.

However, most of the stocks rose yesterday. Of the traded issues, 264 advanced and 54 declined, with 23 securities closing unchanged on the premier bourse. Turnover dropped 1.51 percent to Tk 530.17 crore yesterday.

Shinepukur Ceramics, one of the junk stocks, was the day's best performer with a 10 percent gain.

Four other junk stocks were in the top 10 gainers' list: Tallu Spinning (10 percent), Shyampur Sugar (9.97 percent), Emerald Oil (9.93 percent) and Beximco Sythetics (9.59 percent).

On the other hand, National Life Insurance was the worst loser, shedding 7.03 percent.

Yesterday, BBS Cables dominated the turnover chart with the transaction of 31.02 lakh shares worth Tk 31.34 crore, followed by Paramount Textiles, Beximco, Ifad Autos and Khulna Power.

Chittagong stocks also rose yesterday with the bourse's benchmark index, the CSCX, increasing 167.88 points, or 1.68 percent, to finish the day at 10,115.10.

Gainers beat losers as 198 advanced and 39 declined, while 11 finished unchanged on the Chittagong Stock Exchange.

The port city bourse traded 1.07 crore shares and mutual fund units worth Tk 24.48 crore.