Star Business Report
Stocks ended higher yesterday, riding on the hopes of attractive dividends from better half-yearly earnings of life insurers and non-bank financial institutions.
The market posted gains a day after the regulator asked participants, such as brokers and merchant banks, to abide by the rules in sanctioning margin loans.
On Tuesday, stocks finished almost flat amid speculations of a probable measure to be taken by the Securities and Exchange Commission to cool the market, which is registering a rise in fund inflow from capital gains made by betting on a limited number of issues.
Participants said robust bank operations in the six months to June and a reduction in the interest rates of savings instruments has fuelled the buying spree, marking a return of many investors.
The benchmark index of Dhaka Stock Exchange General Index (DGEN) gained 50.01 points or 0.78 percent to reach 6,404.71.
Insurance, non-bank financial institutions and fuel and power stocks led the gain, supported by pharmaceuticals and the cement sector. The banking sector, as a whole, fell along with textiles and mutual funds, with telecoms ending marginally lower.
“It appears that a better performance by the financial sectors, like banks, are luring investors, making the market upbeat,” said Rezaul Haque, head of the merchant banking division of Prime Finance and Investment.
Participants said expectations of better dividend postings in the backdrop of a low capital base of life insurance firms contributed to the rise in insurance stocks.
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