Stocks rebound from 13-month low

Dhaka and Chattogram stocks rebounded on Monday after a sharp fall for nine consecutive sessions that had pushed the major indices to a 13-month low.

Stockbrokers and analysts thanked the Russia-Ukraine landmark agreement over grain exports, alongside regulatory interventions that slowed the selling pressure and increased buy orders.

Like the previous session, DSEX, the broad-based index of the Dhaka Stock Exchange, sharply nosedived on Monday morning and hit the intraday bottom below 5,985 in half an hour, which was the lowest since 26 June 2021.

Unlike the recent days, bargain hunters who preferred bagging some stocks at declined prices did not allow the key index to hit the same low again and finally, offering investors hope for recovery, DSEX closed at 6,082.9 which was 0.5% higher than the previous close.

The Bangladesh Securities and Exchange Commission's moves such as holding separate meetings with stakeholders to request them to buy more stocks than selling helped halt the fall on Monday.

Rehan Kabir, the lead analyst at EBL Securities, told The Business Standard that Ukraine and Russia signed an agreement on Friday to allow Ukrainian food exports and that offered the world some hope for positive directions in solving the global energy and fertiliser crisis to some extent.

In a week till Sunday, DSEX had plunged 4% as on top of the macroeconomic fear some unfolding stories of market manipulation by a group for the last two years hurt investor confidence, especially when they learned the regulator allegedly had been overlooking the foul plays in the market.

Bangladesh Securities and Exchange Commission (BSEC) Executive Director and spokesperson Rezaul Karim, on the other hand, blamed some stockbrokers for the sharp fall alleging that they have been inspiring their clients to sell off stocks.

The BSEC disputes their stance in meetings with market intermediaries, he said.

"The regulator believes Bangladesh economy is in a much better position than some of its struggling neighbours and in the meetings with the market groups it expressed its view strongly," said the BSEC spokesperson.

A number of stockbrokers told TBS that they received phone calls from regulatory officials not to sell too many stocks and buy instead.  

BSEC in its meeting with 30 high-net-worth individual investors on Monday afternoon requested them to buy large-cap stocks that help the indices stay afloat as the recent fall made them cheaper.

A scheduled coordination meeting among various regulators on Tuesday that discusses the capital market issues also helped increase investors' optimism, said market people.

The DSE registered a substantial rise in participation on Monday, while total turnover has increased by 35.9% to Tk640 crore.

Out of the 382 issues traded, 196 advanced, 131 declined, and 53 remained unchanged in the premier bourse.

However, the general investors are still concerned about the current macroeconomic issues, including the ongoing energy crisis, inflationary pressure, currency depreciation and depletion in foreign reserves, wrote EBL Securities in its daily market commentary.

The Chittagong Stock Exchange (CSE) also settled in green terrain on Monday as CSCX, the broad-based index of the port city bourse, closed 0.65% higher at 10.736 points, while daily turnover inched up to Tk17.46 crore there.