DSEX breaks 7,000 mark

Adamant bulls are pushing Dhaka and Chattogram stocks higher and higher. 

The week began with a breakthrough as DSEX, the most popular benchmark of the Dhaka Stock Exchange (DSE), crossed a psychologically important barrier of 7,000 points on Sunday. 

Though not unforeseeable to most, cautious investors had been little observant of the recent sessions to see if the market corrects from 7,000 mark or forges ahead as they were analysing the impacts of the recent developments including the central bank's moves against unwanted stock speculation and a too much decline in deposit rates. 

On the other hand, the majority of the stock market groups who believe that the market has a good upside due to the favourable dynamics — low interest rate, GDP growth, Covid-19 fallout recovery, and very importantly confidence in the market regulator's efforts to gear up — were acting boldly in the market. 

"Investors' buoyancy led by positive regulatory measures has added strength to the capital market to hold its firm position," said EBL Securities in their daily market commentary.  

Stock brokers observed that both the groups seemed to have increased their market participation on Sunday as soon as the DSEX jumpstarted the day at 10am. 

The broad-based index which closed at 6,981 on Thursday shot up to 7,020 in the beginning of Sunday's trade as a large number of stocks opened higher. 

Floor traders served mass investors' buying spree over the entire session and they thank the securities regulator's bullish outlook alongside its recent decision to raise the DSEX slab to 8,000 from 7,000 that would reduce the allowable limit of margin loans to 25% of investors' own equity from the existing 50%. 

The market averted some forced sell from the investment accounts with margin loans this time and that boosted market confidence a lot. 

The Bangladesh Securities and Exchange Commission (BSEC) sets the limit of allowable margin loans by brokers which investors borrow for leverage in stock trading. 

The bulls were further charged as they learned about export growth in August, and the educational institutions' reopening after an 18-month break. 

The market on Sunday was an all-out demonstration of the market bulls as all the sectors, except insurances and mutual funds, advanced. 

The capital market is expected to extend the ongoing upward momentum due to the event of prevailing excess liquidity and dismal return in the money market, wrote EBL Securities analysts.

Worrying to many fundamental analysts, a large number of small and mid-cap stocks with volatile business performance records kept flying higher. 

Trend traders appeared to be the most adamant group in the market as the BSEC's recently formed committee to monitor small companies did not intimidate them. 

BSEC's efforts to put on track the long-underperforming companies through multiple steps, including board restructuring, increased the demand for small-cap scrips. 

In addition to the prevailing trends, tannery, fuel and power, paper and printing stocks joined the sharp rally fleet on Sunday. 

School reopening was a factor in investors' minds as shoemakers, paper producers might see the demand for their product revive with educational institutions opened.  

Daily turnover at the DSE increased by 16% to Tk2,868 crore. 

Blue-chip index DS30 and Shairah Index DSES, which were lagging behind, seemed to have tried to catch up with their broad-based peer DSEX as against DSEX's 1.03% gains, DSES gained 1.32% and DS30 gained 1.49% on Sunday. 

The port-city bourse Chittagong Stock Exchange (CSE) also observed a stronger momentum as indices there closed higher alongside an increase in daily turnover.