Dhaka stocks rebounded 0.4 per cent on Monday after two sessions of losses as investors returned to insurance and selected large-cap shares, while continued selling in troubled non-bank financial institutions (NBFIs) kept risk appetite uneven.
The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), rose 22.6 points to 5,845 from 5,822.
“The market opened higher and stayed above the previous close for most of the session, absorbing intermittent selling before a brief mid-session correction,” EBL Securities wrote in its post-closing market commentary.
The recovery, however, was not accompanied by stronger participation. Turnover fell 5.8 per cent to Tk908.4 crore from Tk964.6 crore, while the number of trades dropped 8.1 per cent to 225,976 and trading volume declined 2.3 per cent to 324 million shares.
Insurance stocks attracted renewed buying amid market speculation that the planned tightening of margin-lending could be relaxed for the sector.
Margin lending allows investors to buy shares partly with borrowed funds, potentially increasing demand for eligible stocks.
General insurance gained 2.7 per cent, the strongest sectoral performance, and accounted for 22.8 per cent of total turnover. Northern Insurance and Republic Insurance rose 9.85 per cent and 9.84 per cent respectively.
Beximco gained 9.68 per cent, GBB Power 9.40 per cent and Meghna Insurance 6.48 per cent.
The buying extended beyond insurers.
Miscellaneous and services each gained 2.1 per cent, while textiles accounted for 19.6 per cent of turnover and pharmaceuticals 8.8 per cent. Cement fell 1.2 per cent, financial institutions 0.6 per cent and travel 0.4 per cent.
The other side of the market remained under pressure.
Selling stayed heavy in several NBFIs after Bangladesh Bank moved to dissolve four troubled lenders, increasing caution towards listed financial companies that are inactive or facing severe financial distress.
People’s Leasing and Financial Services fell 9.09 per cent, while Fareast Finance and International Leasing and Financial Services each dropped 8.70 per cent.
FAS Finance and Investment fell 7.41 per cent, matching the decline in Premier Leasing and Finance. First Finance lost 5.77 per cent and MIDAS Financing 4.84 per cent.
Even with those pockets of weakness, market breadth remained positive. Of 395 traded issues, 197 advanced, 127 declined and 71 were unchanged.
The DSE’s forward price-to-earnings (PE) ratio, which compares share prices with companies’ expected earnings over the next year, edged up to 10.79 from 10.75 a day earlier, according to EBL Securities.
The modest increase indicates that the market’s rebound came with a slight rise in the price investors were willing to pay relative to expected earnings.
The daily recovery has yet to reverse the market’s recent softness. Turnover remained 45.6 per cent below its level a month earlier, although it was 156.6 per cent higher than at the start of the year.
The DSEX is still up 20.1 per cent so far this year but remains 0.1 per cent below its level a month ago.
The DS30 index, which tracks 30 leading companies, rose 0.4 per cent to 2,186, while the SME-focused DSMEX gained 0.7 per cent to 1,148.
At the Chittagong Stock Exchange, the CSCX rose 0.2 per cent to 9,539 and the All Share Price Index gained 0.1 per cent to 15,629.
