Shawdesh Desk:

The stock market continues to break its previous records as undisclosed money is being invested and small investors are turning back to stocks for low deposit rates in banks, experts said.

Market experts said stocks kept their record-breaking rally as investors are putting fresh bets on stocks anticipating positive momentum ahead after Bangladesh Bank (BB) unveiled another expansionary monetary policy.

Dr. ABM Mirza Azizul Islam, prominent economist and former adviser of a caretaker government, said the investment of a portion of black money has created a rush in the stock market.

On the other hand, people have become more interested in investing in the capital market as deposit rates in banks have dropped, he said.

Stock market experts said some decision of Bangladesh Securities and Exchange Commission (BSEC) has also encouraged the small investors to invest in the capital markets, pushing up the index to 6,596 last week.

Dr Khondaker Golam Moazzem, Research Director of Centre for Policy Dialogue (CPD), said BSEC’s move to dissolve re-structure the boards of Z categories companies had a positive impact on the confidence of the investors. As a result, investors were encouraged to invest in Z category shares after a long time.

As per the new IPO rules, the IPO investors have to keep a certain portion of money in their account for specific period to be eligible to invest it in IPOs. Also, listed companies have initiated moves to transfer unpaid or unclaimed dividends and non-refunded IPO subscription funds to the capital market stabilisation fund as per a directive issued by the BSEC.

Market experts said these latest developments have improved the confidence in the market.

Last week, the core index of the Dhaka Stock Exchange (DSEX), went up by 60.20 points or 0.92 per cent to settle at 6,596, the highest since its inception more than eight years back in 2013.

The DSEX was introduced on January 27, 2013, designed by Standard and Poor’s (S&P) based on the free-float method, replacing the then key index – DGEN. However, the all-time high DGEN was 8,918 recorded on December 5, 2010, when the market saw a bull run before a crash.

The blue-chip index DS30, a group of 30 prominent companies, also jumped 19.44 points to settle at 2,385- the highest since its inception on January 27, 2013.

The DSE Shariah Index also reached record highest at 1439, since its inception in January 2014, after gaining 14.73 points.

The last working day of the week on Thursday has given some relief to the shareholders of the insurance sector. For almost two months in a row, the share price of most of the companies in this sector has turned around.

The position of DSEX, the main indicator of the Dhaka Stock Exchange, is now on the way to cross the house of six and a half thousand points. The index’s position is now the highest since July 26, 2011. On that day the index was 6,626 points. From there, today’s transaction ended 31 points lower.

At that time, of course, there was no DSEX index, at that time the name of the index was DSE index. The DSEX index was launched on January 26, 2013.

Comparing these DSE and DSEX indices, it can be seen that on the day of launch, the DSEX index was 4,055. However, by the standards of the DSE index on that day, it was 4,161 points.