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Rally in mutual funds drives stock market up

 

WT24 Desk
Key share price indices at the country’s twin bourses — Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) gained on Monday, the second trading day of the week, agencies report.  The DSE benchmark index, DSEX gained 29.77 points or 0.66 percent to close at 4531.992 on the day. Of the 317 issues traded, 197 gained, 88 declined and 32 remained unchanged.Shares worth Tk 428.31 crore changed hands at the DSE on Monday as against Tk 362.04 crore on Sunday. The day’s top 10 gainers at the DSE were Hakkani Pulp & Paper, Olympic Accessories, Malek Spinning Mills, ICB AMCL 1st NRB Mutual Fund, 1st Scheme of Reliance Insurance Mutual Fund, Investment Corporation of Bangladesh, Agrani Insurance, Kohinoor Chemicals, Northern Jute Manufacturing, and Sonar Bangla Insurance.

Top five losers at the DSE were Bangladesh Industrial Finance Corporation, Stylecraft Limited, Prime Islami Life Insurance, Monno Ceramic, and Exim Bank 1st Mutual Fund. The top five turnover leaders at the DSE were Olympic Accessories, Lafarge Surma Cement, Beximco Pharma, Square Pharmaceuticals, Grameenphone and Beximco. Mutual funds (MFs) became among the major attraction of investors at the stock market on Monday after the central bank eased provisioning requirement for banks against their investment in this sector, agencies report.  Out of 39 MFs, 22 closed higher at Dhaka Stock Exchange (DSE), with three of them taking the position among the day’s top 10 advancing securities.

Bangladesh Bank (BB) on Sunday said that banks from now on would not have to keep provision for losses against investment in mutual funds if the unit’s cost price is equivalent to or lower than 95 percent of its net asset value (NAV) in current market prices. BB also extended time limit for adjusting single borrower exposure limit by the commercial banks’ subsidiary brokerage houses and merchant banks to December 31, 2015.

The investors responded positively to the decisions with increased activities around the MFs and issues from bank and financial sectors. As a result, the day’s transaction rose significantly, making issues closing higher across the board.  The trade value increased by 18.30 percent to Taka 428.31 crore and the volume rose by 14.32 percent to 9.72 crore shares.

Chittagong Stock Exchange (CSE) also maintained the rally when its broader CSCX closed nearly 61 points higher at 8476.83.  Out of traded 252 securities, 151 finished higher against 61 losing issues. A total of 90 lakh shares worth Taka 42.85 crore changed hands on the day.

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