Margin rule relaxation rumours spark late-hour rally at DSE

The country’s premier bourse rebounded yesterday, snapping a two-day corrective spell, as investors reacted enthusiastically to rumours of a major regulatory shift.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) rose 22 points, or 0.38%, to close at 5,844, driven largely by a late-session surge in buying interest across the banking and insurance sectors.

Market insiders said sentiment shifted sharply mid-session after word spread that the Bangladesh Securities and Exchange Commission (BSEC) may withdraw the mandatory price-to-book ratio requirement for margin loans against shares of banks, non-bank financial institutions (NBFIs), and general insurers.

A leader of the DSE Brokers Association told The Business Standard that the development acted as a key catalyst for the rally.

“The prospect of easier margin loan access for these core sectors drew investors in the final hour of trading, pushing the index up and offsetting earlier caution,” he said. The blue-chip DS30 index also gained, rising 8 points to close at 2,185.

Despite the rise in indices, market participation cooled slightly, with total turnover on the DSE falling 6% to Tk908 crore.

The market breadth, however, remained positive, with 199 issues advancing compared to 129 that declined, while 64 scrips remained unchanged.

The insurance sector emerged as the star performer of the day. General insurance scrips accounted for the highest share of turnover at 22.8%, delivering a sectoral return of 2.7%. The textile and pharmaceutical sectors followed in terms of trading volume, contributing 19.6% and 8.6% respectively.

In terms of sectoral returns, the miscellaneous and services sectors also posted healthy gains of 2.1% each.

On the flip side, the cement sector faced the steepest correction of 1.2%, while NBFIs remained under pressure, shedding 0.6% on average.

Individual stock performance featured Northern Insurance and Republic Insurance at the top of the gainers’ list, both surging by over 9.8%. Heavyweight Beximco Limited also saw a robust 9.67% jump.

Conversely, the losers’ chart was dominated by struggling NBFIs, with Peoples Leasing, International Leasing, and Fareast Finance all recording significant price falls, largely due to ongoing concerns regarding the central bank’s liquidation plans for weak financial firms.

The bullish sentiment extended to the Chittagong Stock Exchange (CSE), where the Selective Categories’ Index (CSCX) ended 17 points higher at 9,539 and the CASPI rose by 10 points to reach 15,628. Trading activity at the port city bourse saw a notable 13% jump, with turnover reaching Tk35 crore.