Pre-budget optimism spurs stocks’ rally

FE Report

The strong budgetary expectations extended the current rally to eighth straight session Wednesday with turnover hitting another record high as investors continued to inject fresh fund into the market.

Brokers said the investors went for fresh buying spree stimulated by news regarding bundle of stimulus for the capital market in the upcoming national budget which will be announced today (Thursday).

The General Index of the Dhaka Stock Exchange (DGEN) crossed the 4,300 points mark after four month and ended at 4,310.62 points, gaining 87.67 points or 2.07 per cent, packed since February 19, 2013 as the budgetary expectations created stronger momentum.

The other two indices the DSEX went up by 73.54 points or 1.85 per cent to close at 4,048.03 while the blue chip index DS30 marked the highest gain of 33.79 points or 2.30 per cent among the three indices to close at 1,498.89 points.

The total turnover at DSE improved further by 8.0 per cent from previous session's eight months high value and stood at Tk 6.60 billion at the end of the session. It was also highest turnover since October 14, 2012 when it was recorded Tk 6.91 billion.

"The condensed expectations driven by capital market oriented incentives in the upcoming Budget session for FY 2013-2014, pushed up both DSEX and DGEN to 4,048.04 and 4,310.63 points respectively," commented IDLC Investments, in its regular market analysis.

"Market motion was mostly exponential due to fresh investment, accelerated by news of decline in bank interest rates and increased foreign investment in DSE, made the DGEN highest within last three and half months," said the merchant bank.

In addition, market optimism extended the current rally to eighth straight session, with a cumulative gain of 415.61 points in DGEN, the merchant bank said.

"Participation was mostly centered in Fuel and Power (17.13%) and Pharmaceutical (10.83%) sector, making the total market turnover highest within last seven and half months," the merchant bank added.

"High net worth individuals and institutional participation increased. Strong buying pressure seems to offset any bearish sell-off in the market," commented LankaBangla Securities, a leading stock broker.

"Turnover continued trending up indicating fresh money flow into the market. Margin loan driven sell-off could be a short term pulling factor for the market, but fresh funds seems to be ready to absorb these sell pressure," said the stock broker.

Fuel and power sector seems to be trending up steadily as three of them occupied among the top ten turnover leader, said the stock broker.

The gainers took a strong lead over the losers as out of 287 issues traded, 183 advanced, 78 declined and 26 remained unchanged in the primer bourse.

Among the major sectors, telecommunications was the big market mover which gained 3.77 per cent followed by banks 2.28 per cent and NBFIs 1.92 per cent. Pharmaceuticals and fuel and power were also up by 1.65 per cent and 1.20 per cent respectively.

A total of 0.151 million trades were executed in the day's trading with 164.76 million securities of trading volume. The market capitalization on the DSE stood at Tk 2,476.54 billion against Tk 2,440.70 billion in the previous session.

State owned Titas Gas was the day's most traded stock with shares worth Tk 265.09 million changing hands. Three more stocks from fuel and power sector featured in the top ten most traded shares chart --- they are Meghna Petroleum, Jamuna Oil and SPPCL.

Jute Spinners was the day's highest gainer, posting a rise of 10 per cent while Desh Garment was the day's worst loser, slumping by 6.91 per cent.

The Chittagong Stock Exchange (CSE) also ended higher with the Selective Categories Index gained 118.03 points to close at 7,961.13 points.

Gainers beat losers 136 to 60, with 14 issues remaining unchanged on the port city bourse that traded 17.94 million shares and mutual fund units, turnover value of Tk 552.23 million.
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