Why The Stocks Are Expected To Rise In 2019? : Dhaka Stock Exchange

Posted by Alan Smith on January 31st, 2019

After an unexpectedly bad year, investors are expecting a rise in the stock market in 2019. Due to liquidity crisis and complex political situation in 2018, Dhaka Stock Exchange witnessed many fluctuations. However, the stocks are performing better in the first-quarter of 2019.

At the end of 2018, DSEX sank to 5218 points from 6280 points. Both foreign investors as well as local, lost a good sum of around Tk 45,813 crore. The liquidity crisis raised the non-performing loans in the banking sector, which was the main reason DSE got affected. Moreover, the political tension centering the 2018 National Election also restricted the growth of stocks.

Many other factors like supply & demand, market sentiments, economic data, and geopolitical events also caused the market to move in either direction. But as the fear of political instability is over now, the investors are very much confident about the rise of stocks in 2019.

Factors Influencing Growth of Stocks In 2019

Political Stability

Financial experts confirmed political stability in Bangladesh following the December 30,^,2018 National Elections. It is expected that the stability will continue for at least 2 to 3 years and the stocks will grow without any interference of politics. Mainly, the banking and pharmaceutical stocks have better space to grow.

Improvement in Nation’s Economy

In 2019, the market will definitely climb-up, if the economy remains stable throughout. Both the government and private sectors are planning to invest more funds in the market, which will directly contribute to the economy. With better stability in economy, it is for sure more and more foreign investors will show their interest in DSE.

Involvement of Chinese Consortium in the DSE

Shareholders have approved the involvement of Chinese Consortium in the DSE. 25% share of DSE will be transferred to the Chinese Consortium for making them the strategic partner of the country’s premier bourse. Investors are expecting a positive development in terms of technology as well as accessibility. No doubt, the partnership will improve the online stock trading in Bangladesh.

Introduction of New Quality Stocks

Former Chairman of BSEC, AB Mirza Azizul Islam, stated that most of the stocks are underpriced now, and there is an urgent need to introduce quality stocks. New and quality stocks will make lucrative offers to the investors that may allow the index to cross 6,500 points without any concern. Even investors have also demanded the government to bring in quality stocks to meet their expectations.

Lending Rate May Go Down

It is true; liquidity crisis has ruled throughout 2018 and has greatly affected the economy as the stock market. However, in 2019 the banks are expected to find sustainable solutions for liquidity crisis. For sure, the lending rates that were influencing the liquidity may go down this year.

Dhaka stock brokers understand the current stock market collaterals and accordingly are offering advanced trading tools.