FE Report

Dhaka stocks posted a sharp rise Tuesday, led by non-banking financial institution (NBFI), oil and IT issues as well as companies with small paid-up capital, after falling the previous day on profit taking.

Strong participation of both institutional and new investors in trading at the Dhaka Stock Exchange (DSE) helped the total turnover cross the Tk 11.0 billion mark for the first time in three months.

The benchmark DSE General Index (DGEN) surged 43.34 points or 1.33 per cent to 3280.32, surpassing the previous record of 3259.65, set on Sunday last.

The broader DSE All Shares Price Index (DSI) added 38.88 points or 1.43 per cent to close at 2750.26 while the DSE-20 blue chip index gained 43.72 points or 1.93 per cent to stand at 2305.62.

Active participation of both institutional and new retail investors pushed the market up sharply with the turnover hitting the second highest level, stockbrokers said.

"Apparently, trading did not follow fundamentals, which is alarming for long term investment and genuine investors," said a top fund manager, preferring not to be named.

Institutional buyers started to behave like retail investors, increasing vulnerability and volatility of the market, he added.

"The price correction was long overdue as the bull-run continued in the market over the past weeks," he also said.

A total of 12,180,600 shares of Bextex, the textile arm of a leading industrial conglomerate, worth Tk 890.57 million were traded at the bourse on the day, the second highest single-day transaction in shares of a company.

About two years back, shares of the state-owned petroleum distribution company Jamuna Oil worth Tk 1.04 billion were sold at the DSE , which was the highest ever single-day transaction in the country's capital market history.

The total turnover of the prime bourse Tuesday hit the second highest level of Tk 11.03 billion, only Tk 481.1 million behind the record turnover set on July 2 this year and up by 38.1 per cent from that of the previous session.

Stock prices of most of the companies increased on the day as out of 239 issues traded, 190 advanced and 49 declined.

After falling on profit booking the previous session, banking issues gained on the day except Mercantile Bank, which fell marginally. Mutual funds, pharmaceutical and insurance companies ended mixed.