Dhaka stock rally continues as regulator lifts price curb for more firms

The DSEX climbs for a second straight day as 23 more companies are relieved of the floor price restriction

Staff Correspondentbdnews24.com
Published : 23 Jan 2024, 07:38 AM
Updated : 23 Jan 2024, 07:38 AM

Stocks on the Dhaka bourse extended their gains into a second day after the regulator removed the floor price restriction for shares of another 23 companies.

On Tuesday, the Dhaka Stock Exchange's main index, DSEX, saw a 22-point increase over the previous day to end at 6,276 after a roller-coaster ride throughout the day.

Although the turnover rose to a seven-month high at Tk 11.76 billion, more shares experienced a decline than the previous day.

Out of 393 shares and mutual funds that changed hands, 126 saw an increase, 227 experienced a decrease, and 40 remained unchanged.

The Bangladesh Securities and Exchange Commission removed the floor price for all except 35 firms on Thursday.

Sunday's trading began with a significant drop in prices, but the market rebounded later in the day as institutional investors became active. The day ended with the index down by 96 points.

The impact of lifting the floor price was more apparent on Monday. The index gained 14 points by the day's end, with the trade turnover exceeding the Tk 10-billion mark for the first time in six months.

After monitoring the market for two days, the BSEC removed the floor price for 23 more institutions, allowing them to return to normal trading on Tuesday.

Mohammad Saifuddin, vice-president of DSE Brokers Association of Bangladesh, sees the fluctuation in the index and the rise in turnover as market correction.

“The market was good for two days and today [Tuesday] the index was slightly down by the end. This is a kind of correction, and this is how the market behaves – sometimes good and sometimes bad. The market is returning to that position after one and a half years,” he said.

In his words, the owners of the shares of companies, whose floor price has been lifted, are rearranging their investment portfolio. “Some of them are offloading pricy shares and choosing cheaper ones. They are also selling the shares of the companies whose business was not good.”

Ashraful Islam, an investor, said: “After two good days, everyone is thinking whether this will continue. Today [Tuesday] there was a slight market correction. I think it’s alright. It’ll take some more time to understand the market.”