Banking issues cause market’s modest gain

FE Report

Dhaka stocks saw a modest gain, lifted by banks, amid continued volatile trading Tuesday.

The market dipped in the opening hour, losing 48 points but the last-minute buying on banking stocks, which climbed 0.27 per cent, pushed the market up.

The benchmark Dhaka Stock Exchange General Index (DGEN) closed at 5,588.00 with a gain of 20.60 points or 0.37 per cent, after marginal rise in the previous session.

It hit the lowest level of 5,519.05 and highest level of 5,596.41 during the choppy trading session.

The broader DSE All Shares Price Index (DSI) rose 15.42 points or 0.33 per cent to 4,568.21, while the DSE 20 blue chip index surged by 15.37 points or 0.51 per cent to 2,982.45.

After continued fall in the last five sessions, the banking issues, the bellwether of the market, rebounded on the rumour that the securities regulators might reset price earning (PE) ratio for qualifying marginable securities, stockbrokers said.

But the Securities and Exchange Commission (SEC) rejected the rumour. "It is a baseless proposition," said Yasin Ali, a member of the SEC.

Earlier, the SEC directed that investors would not get credit against securities crossing PE ratio over 50.

A marginable security means a stock that can be purchased on margin loans provided by brokerage houses and merchant banks.

Majority of the banking issues finished in positive territory with Dhaka Bank having the highest gain of 4.44 per cent just a day before its record date. But Dutch-Bangla Bank had the largest fall of 3.13 per cent.

Grameenphone, the most weighted shares in DSE, advanced 0.44 per cent to close at Tk 363.40. But its share prices fluctuated throughout the session.

The non-banking financial institutions edged 1.35 per cent higher due to gain in share prices of heavyweights - ICB and IDLC - that climbed 5.74 per cent and 1.24 per cent respectively.

The mutual funds advanced 2.38 per cent. But most of the ICB unit funds lost.

The pharmaceuticals sector declined 0.27 per cent with the companies finishing mixed. Energy sector rose 0.19 per cent, cement 0.51 per cent, general insurers 1.65 per cent, life insurers 0.16 per cent and tannery 0.44 per cent.

The daily average turnover improved a bit as it stood at Tk 8.54 billion (854 crore), showing an increase of more than 8.5 per cent over the previous session's Tk 7.88 billion.

Losing stocks took a marginal lead over the gainers as out of 240 issues traded, 110 advanced, 128 lost and two remained unchanged.

Lanka Bangla Finance topped turnover list with shares worth Tk 1.05 billion changing hands.

Beximco Ltd slipped in second from previous day's first position with shares worth Tk 727.41 million traded.

Other leading turnover leaders were Bextex, AB Bank, GP, Southeast Bank, Premier Bank, Summit Power, Union Capital and Navana CNG.

ICB Employees Provident First Mutual Fund was the largest gainer posting a rise of 7.12 per cent.

Other major gainers included Olympic Industries, DBH First Mutual Fund,

ICB, Dhaka Bank, Ambee Pharma, Trust Bank First Mutual Fund, ICB First NRB Mutual Fund, Prime First ICBA AMCL Mutual Fund and ICB AMCL First Mutual Fund.

CMC Kamal, a weak performing company, lost 14.66 per cent. The company was the day's biggest loser.