The total market capitalisation of Dhaka Stock Exchange (DSE) rose 19 per cent in the just concluded fiscal year (FY) 2016-17 compared to the previous fiscal as investors were on buying mood.
The total market cap of the prime bourse also reached all-time high of Tk 3,847 billion on April 4 during the fiscal year.
Between June 30, 2016 and June 29, 2017, the DSE market capitalisation added more than Tk 615 billion as investors continued to inject fresh funds into stocks amid optimism.
According to statistics from the DSE, the total market cap of the prime bourse was Tk 3,186 billion on June 30, 2016 while it jumped to Tk 3,801 billion on June 29, 2017, the last trading session of the just concluded fiscal year.
DSEX, the benchmark index of the Dhaka bourse, also surged 1,148 points or 25 per cent to reach at 5,656 points on June 29, 2017, the last trading session of the fiscal year 2016-17.
The daily average turnover in the just concluded fiscal year also jumped to Tk 7.55 billion, which was 74 per cent higher than the previous fiscal year's average of Tk 4.34 billion.
Analysts said the escalation of market cap, index and turnover value — the three most important indicators of the stock exchange — in general suggests that the investors' confidence in the capital market is coming back.
They said the market has been on the rise in recent times mainly due to investors share purchasing frenzy as they were in an expectation that the prices of shares will rise further.
As the market has been on the rise for more than three months, investors, who were on the sideline, continued to inject funds, they said.
"The upward trend of the index was supported by high turnover and upward movement of major large-cap sectors such as bank, non-bank financial institutions, engineering and fuel & power," said an analyst at a leading brokerage firm.
Since the banking sector has the highest market cap with free-floating proportion, the gain of this sector alone has made major contribution to the upswing of the index, he said.
The bank interest rate is declining, while foreign investors are injecting funds into the market.
"These are also the reasons behind the rising trend in the market" he added.
He noted that several factors like budget review expectation coupled with June closing year-end earnings and dividend declarations prompted investors to inject fresh funds into stocks.
Following the wide-spread criticism over proposed hike in the duty and new VAT law, the government finally back-tracked to implement the new VAT law in the next two fiscal years.
The government also reduced excise duty on bank-account balance for small savers following wide-spread criticism for Fiscal Year (FY) 2017-18.
babulfexpress@gmail.com [Read More]

—–
Source: The Financial Express