Stocks rally on positive budgetary assurance

Dhaka stocks rallied on Thursday as the investors reacted positively to the government’s assurance that no measures will be taken in the budget to be unveiled on June 9, which will hurt the market. But most investors, including big volume generators, still preferred to stay sideline, pushing the turnover to the four-month low.

The DSE General Index (DGEN), the main gauge of the market, soared 105.07 points or 1.99 per cent to close at 5,397.61, breaking the third consecutive day of losses.
The market initially moved between negative and positive but last minute buying pressure on banking, financial institutions and energy have sent the market into the positive territory.
Turnover clocked at Tk 2.96 billion, down by 8.56 per cent over the previous session and lowest since January 25, when it was Tk 2.06 billion.“The government’s assurance gave a boost to the investors’ confidence,” said Abdual Awal, managing director of the Multi Services and Securities Ltd.On Wednesday, the chairman of the parliamentary standing committee on finance ministry, A H M Mostafa Kamal, said “We had a discussion with the finance minister who assured me of not taking any step that goes against stock market.”
On Thursday, Bangladesh Bank has extended adjustment period of single-borrower exposure limit for the merchant banks and brokerage firms by six months more.
December instead of June was set as the new deadline for the exposure adjustment for them.
“This is also the positive news for the market, which also might give an impetus for the market,” said a stockbroker. In another development, a group of investors ---under the banner of Sharebazar Oikkyo Parishad’--- formed a human chain in front of the DSE main building and demanded intervention of the prime minister to bring stability in the market.
Most issues advanced on the day as out of 255 issues traded, 241 advanced, only 10 declined and four remained unchanged. All sectors closed positive on the day with paper and printing sector was biggest gainer and gained 5.49 per cent. The state run oil company, Titas Gas topped the turnover list with shares worth Tk 116.12 million changing hands.
Other turnover leaders were MI Cement, Beximco Limited, United Airways, Bextex Limited, Peoples Leasing, Aftab Automobiles, RN Spinning, BSRM and National Bank Limited.

Source: The Independent (27 May 2011).