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Capital market crosses golden year

Published : 31 Dec 2020 08:48 PM | Updated : 01 Jan 2021 03:37 AM

Market cap (capitalization) at the Dhaka Stock Exchange (DSE) hit a record high last year as fresh investment geared up the capital market for the listing of some good companies including mobile phone operator Robi.

The total market-cap of the DSE increased by Tk 1086.78 billion or 32 percent to close at Tk 4,482 billion on Wednesday, the last working day of the year 2020 from Tk 3395.51 billion on the same day of the previous year.

Market analysts said optimistic investors have shown their buying spree on sector-wise securities to push the market up during the last several months on regulatory moves and gradual improvement of economic activities.

They said most of the share prices increased participating to push the stock market up in the past year. 

They mentioned the optimistic investors continued their buying spree amid growing confidence in the market riding on regulatory moves to restore discipline in the market as well as some good IPO approvals recently including biggest-ever issue Robi.

A leading broker said the regulator's moves to restructure boards of some 20 listed companies whose sponsor-directors failed to hold minimum 30 percent shares jointly, also attracted the investors.

Investor confidence strengthened as the global economy rebounded for the start of Covid-19 vaccination distribution in the major trade partner countries of Bangladesh, he added.

Besides, the government has declared to formulate another fresh stimulus package and the regulator’s relentless efforts to buoy up the market kept the investors afloat, he further said.

Prof Shibli Rubayat Ul Islam, Chairman of Bangladesh Securities and Exchange Commission (BSEC), had recently told reporters the country’s capital market will build into a sustainable one within the next six months, no vested quarter would be allowed to play any game anymore with the share market.

“We will give security to the investment of small investors, he mentioned. 

“The market witnesses ups and downs based on demand and supply. We’re keeping attention so that no vested quarter can come to the market and render the small investors empty-handed. So, we hope that we’ll get a sustainable capital market within the next six months,” he said.

He further said the capital market watchdog would invite more IPOs (initial public offerings) through which the big businesses would be able to manage long-term financing, which would eventually benefit the IPO winners of the primary market.

The BSEC chairman said they have allowed many IPOs , but there was no such negative impact. “Rather, the businessmen are being able to gather their capital through IPOs and many employment opportunities are also being created. Through this, the entrepreneurs are being benefitted, the market is being benefitted while the depth of the market is also being increased.”

Shibli said the investors were also benefitted, adding, “On the whole, we’re foreseeing a win-win situation, if we feel that we need to go a bit slow (regarding IPOs), or need some intervention, we’ll do that.”

Eminent economist and market expert Prof Abu Ahmed told Bangladesh Post, “The market has gone down a lot and has significantly risen from there.”

In this case, regulatory measures have played a crucial role in boosting the confidence of the stock investors, which has geared up the index and turnover in recent times, he mentioned.

The prime index of the Dhaka Stock Exchange (DSE) increased significantly by 950 points to stand at 5, 402 points last year.

The DSE 30 Index comprising blue chips went up by 450 points to close at 1,963 and the DSE Shariah Index (DSES) increased by 243 points to finish at 1,242.

On the other hand, the port city bourse, the Chattogram Stock Exchange (CSE) also saw a rapid growth during the last year with its selective category index (CSCX) gaining 1240 points to close at 9,403 points.

The All-Share Price Index (CASPI) of the CSE was higher by 2128 points to close at 15,592 points.