Stocks rally amid higher turnover

Fuelled by positive macroeconomic updates, hints about fresh government stimulus, and increased confidence in the capital market environment, stocks rallied for the third consecutive session on Sunday.

DSEX, the broad-based index at the Dhaka Stock Exchange (DSE), increased by 2.11% to close at 5,328, the highest since 8 July, 2019.

Increased participation by optimistic investors – both individual and institutional – yielded an 8.8% hike in DSE turnover, reaching Tk1,529 crore on Sunday.

This was the highest in more than 18 months, if the trading session which witnessed the GSK-Unilever share transfer deal is excluded.

Optimism across the board helped 238 of the DSE scrips gain over the day, while 65 lost and prices of 59 remained unchanged.

Investors favoured fresh stakes in big stocks due to the year-end dividend expectation, said EBL Securities in its daily market recap.

Some stockbrokers said the debut of Robi Axiata Ltd boosted the total market turnover while its share prices rose to the maximum allowable level for the second consecutive day.

Robi shares' 50% steady gain on the second trading day at the bourses helped the telecom sector top the sectoral table for market capitalisation gain.

Robi closed at Tk22.5 per share on Sunday following its recent initial public offering at a face value of Tk10 for each share.

The telecom sector's 9.3% market capitalisation gain was followed by jute, engineering, services, financial institutions, IT, fuel and power, banks, ceramic, food, pharmaceuticals, and chemicals respectively.

Only cement and general insurance stocks faced price corrections after recent gains.

Pharmaceuticals, banks, general insurance and miscellaneous were the sectors occupying at least 10% of the day's trading each.

Meanwhile, CSCX, the broad-based index at the Chattogram Stock Exchange, gained 2.5% to close at 9,263 points, while blue-chip index CSE30 gained 2.73%.

Turnover at the port city bourse declined by 6% to Tk68.5 crore.

Bangladesh stock market witnessed a noticeable turnaround in mid-2020. The DSEX fell below 3,600 marks in March and soon bounced back after the regulator set a floor price for individual securities.

The market began to rally in June, and the DSEX is already 19.66% higher than where it began the calendar year.

However, blue-chip index DS30 outperformed all other indices with a 26.59% year-to-date gain, leaving behind foreign investors' longest lasting sell-off before the turnaround.

DSE is trading at an average price level that is 13.68 times higher than the average earnings of the listed securities, according to United Securities research.

The brokerage firm excludes securities with negative earnings when calculating the popular ratio called the price to earnings ratio.

Currently, listed securities are priced 2.5 times higher than their underlying net asset value on average.

The market's dividend yield stood at 2.57%, which means investors are set to get cash dividends at the said rate on their current net worth in the market.