On Wednesday Dhaka stocks rose sharply for the two consecutive sessions after buying spree in financial issues pushed the turnover up amid instability. Market operators said strong buying in banking, non-banking and insurance issues by retail and institutional investors helped maintain the bullish trend on the Dhaka Stock Exchange (DSE) with turnover rising significantly. The market opened with a flying start, rising 302 points in just ten minutes, and then followed volatile trading as it shed 124 points before its closure. The benchmark DSE General Index (DGEN) surged by 2.38 per cent or 178.60 points to close at 7690.69, after a record gain of 1012 points or 15 per cent Tuesday.

The broader All Shares Price Index (DSI) moved up by 2.10 per cent or 131.43 points to 6380.79. The DSE-20 Index comprising blue chips was up by 1.15 per cent or 54.86 points to 4828.52. The regulator's market friendly steps helped regain investors' confidence and the buying binge closed the market up, dealers said. "Confidence is being restored among investors. I think the market is going to be stable in the coming days," said Ahmad Rashid Lali, managing director of the Rashid Investment Services. The central bank is set to unveil its half-yearly monetary policy this month, he said, hoping that the policy would give some specific directions with regard to the capital market as it faces liquidity crisis.

Analysts, however, voiced doubt over the sustainability of the Tuesday's "unusual" gains stemming from the regulator's series of interventions. Many of them called it a government intervention and it looked like an artificial spike as it rose more than 15 per cent or 1012 points - the highest one-day spiral. Banking issues, the market's bellwether, continued to flex their muscle and gained 2.38 per cent. Among the notable gainers, non-banking financial institutions 4.21 per cent, general insurance 6.28 per cent and life insurance 6.26 per cent, which helped the market maintain its upward trend.

The other major sectors--fuel and power and pharmaceuticals--lost 0.70 per cent and 0.41 per cent respectively. Turnover sharply rose to Tk 16.50 billion, up by 69.0 per cent over the previous session. The gainers took the strong lead over the losers as out of 246 issues traded, 147 advanced, 94 declined and five remained unchanged. On Tuesday, the DSE general index gained 1,012.65 points or 15.58 per cent to close at 7512.09, just a day after the Securities and Exchange Commission suspended trading of shares after free fall of 660 points within 50 minutes traded Monday.

United Commercial Bank topped Wednesday the turnover list with shares worth Tk 777.96 million changing hands. The other turnover leaders were National Bank, United Airways, Southeast Bank, Bextex, Bay Leasing, AB Bank, Titas Gas, Peoples Leasing and Grameenphone. Saiham Textile was the highest gainer posting a rise of 19.98 per cent followed by Prime Life Insurance, Square Textile, Uttara Finance, Standard Insurance, Karnaphuli Insurance, Federal Insurance, UCBL, Meghna Cement and Asia Pacific Insurance. The day's prominent losers included AIBL First Mutual Fund, Standard Ceramics, Savar Refactories, Meghna Pet, Dulamia Cotton, Chittagong Vegetable, BSC, Hakkani Pulp and Papers, Rupali Bank and Reckitt Benckiser Bangladesh Ltd. Meanwhile, the man blamed for the last year's major stock falloff stepped down from his post at the Securities and Exchange Commission (SEC) in a development that could assuage investors' worry, officials said.

SEC chairman Ziaul Haque Khondker told reporters Wednesday that Mr. Alam resigned Tuesday from his post on "personal grounds" and the Finance Ministry accepted his resignation letter. He also said that the authority sent his resignation letter to the Ministry of Establishment Wednesday. His resignation came weeks after controversial personal directive cause a major fall in the share market on December 08 last year. Dhaka Stock Exchange's benchmark DGEN index sank more 6.37 per cent of 547 points in the first 80 minutes of trading on December 8, in a day of extreme volatility that saw market regain most of the losses in late hours to close at minus 1.56 per cent.

The steepest fall sparked wildcat street protests in Dhaka and half a dozen district towns by thousands of retail investors who sniffed conspiracy by a "vested group" in the sudden stocks fall. Investors blamed two SEC orders that barred execution of share buying before cashing of cheques and misuse of netting facilities for the plunge.

News: Financial Express/Bangladesh/13 Jan 2011