DSEX reclaims 5,900 as margin rule relaxation hopes fuel rally

The country's premier bourse staged a robust rally today (11 August), with the benchmark index reclaiming the psychologically important 5,900-point mark on optimism over a potential relaxation of margin lending rules.

Investor sentiment got a lift after The Business Standard reported on the possible regulatory shift, triggering a wave of buying that added around Tk3,300 crore to the market capitalisation of the Dhaka Stock Exchange (DSE).

The DSEX index rose 58 points, or 1%, to close at 5,903. The blue-chip DS30 index also tracked the bullish trend, adding 18 points to finish at 2,204.

Turnover on the DSE jumped 23% to Tk1,115 crore, marking a return to four-figure territory for the first time in recent sessions.

Advancers dominated the session, with 242 issues gaining ground against 101 decliners, while 50 stocks remained unchanged.

Market insiders noted that the buying spree began from the opening bell as investors reacted to news that the Bangladesh Securities and Exchange Commission (BSEC) was considering more flexible margin financing regulations. 

According to the daily market review by EBL Securities, the capital bourse extended its positive momentum for a second consecutive session as the anticipation of favourable regulatory changes strengthened investor confidence, driving sustained broad-based accumulation. Although the market faced mild profit-taking at intervals, the underlying buying pressure remained firm enough to uphold the upward trajectory until the closing bell.

Sheltech Brokerage Limited observed that the market initially opened with strong buying interest, lifting the DSEX to an intraday high of 5,910.64 points. While a bout of orderly profit-taking in the late morning briefly pulled the index down to a low of 5,844.87, momentum returned with vigor during the mid-session. This late-session surge allowed the benchmark to retain the bulk of its early gains and settle near the day's high.

A source within the BSEC confirmed to The Business Standard that the commission held a high-level meeting after the conclusion of the day's trading session. During the meeting, the regulator reportedly approved several key amendments to the margin loan framework. A pivotal change includes the restoration of the Price-to-Earnings (P/E) ratio as the primary criterion for margin eligibility in the banking and general insurance sectors, replacing the recently proposed Price-to-Book (P/B) ratio which had caused significant anxiety in the market. The source added that the final amendments also include a relaxation of forced-sell requirements and an increase in the overall P/E ratio ceiling for margin lending.

The rally was primarily driven by heavyweights and blue-chip scrips, with British American Tobacco (BAT) Bangladesh, Southeast Bank, IDLC Finance, LafargeHolcim Bangladesh, and IPDC Finance emerging as the day's top index pullers.

On the liquidity front, Beximco Limited remained the most traded stock, followed by Sharp Industries, Malek Spinning, ML Dyeing, and Saiham Textile.

Among individual scrips, NRBC Bank and Nurani Dyeing were the top performers, both hitting the 10% upper circuit. Other notable gainers included Tung Hai Knitting, GBB Power, and Sena Insurance.

On the flip side, Prime Finance and Peoples Leasing featured among the top losers, as investors shifted capital toward more fundamentally sound sectors.

The bullish sentiment extended to the Chittagong Stock Exchange (CSE), where the Selective Categories Index (CSCX) rose 95 points to 9,634, while the All Share Price Index (CASPI) surged 161 points to 15,790. Turnover at the port city bourse jumped 100% to Tk71 crore.