Dhaka stocks advanced on Thursday to end a three-day losing spell as a section of investors went for bargain hunting to arrest the relentless fall in share prices while the others remained cautious.
Dhaka stocks , the key index of Dhaka Stock Exchange, gained 0.88 per cent, or 38.88 points, to close at 4,456.83 points on Thursday after losing 96.5 points in the previous three sessions.
The market began to gain from the very beginning on Thursday’s session and continued the momentum until the end of the session as a group of investors went for bargain hunting after the DSEX hit a 42-month low on Wednesday.
Market operators said that whenever the market hit a record low, a section of institutional investors became active to halt the plunge and wane the investors’ nervousness.They said some institutional investors thought that the market hit the bottom and it was high time for them to inject funds in the market to get optimum profits.
The media reported that the finance minister sought opinions from the Bangladesh Bank and the Bangladesh Securities and Exchange Commission over loans worth Tk 10,000 crore sought by a number of brokerage houses for investing on the market.The news encouraged a section of investors as they anticipated that the fund, if approved, would help the market to rebound, market operators said.
The market has been in the doldrums for last 11 months that reduced the DSEX by 1,498 points and eroded Tk 78,200 crore in DSE market capitalisation.Turnover on the bourse remained below Tk 300 crore as many investors preferred to be on the sidelines to observe the situation.Turnover on the DSE increased slightly to Tk 276.43 crore on Thursday from Tk 254 crore in the previous trading session.
Decline in the private sector credit growth to a nine-year low, negative export earnings for last four months, poor tax revenue collection and heavy government borrowing were adding woes to the waning investors’ confidence.
Besides, continued sales of shares by the foreign investors became a hurdle to the market recovery.The foreign investors withdrew around Tk 970 crore from the country’s capital market in last 10 months.
EBL Securities in its daily market commentary said some institutional investors had participated in the market on Wednesday to stop the freefall in the index and the market witnessed a spillover of the effort on Thursday as individual and institutional investors showed some positive attitude towards the market.
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