Stocks ride on increased liquidity
Although Bangladesh’s stock market is not connected with global markets and does not follow the usual global trends, nowadays it has been different. Dhaka stocks are soaring like other major markets which are hovering around all-time highs. The reason, analysts said, is a global availability of liquidity, including in Bangladesh. The S&P index of the US now stands at a record 3,841 points while the Dow Jones is also at an all-time high with 30,996. Similarly, Nasdaq reached a personal best of 13,543 points. Meanwhile, Dhaka Stock Exchange (DSE) witnessed its highest-ever market capitalisation on January 14. The DSEX, the benchmark index of the DSE, also touched 5,900 points last week and remains in a positive trend. Its all-time high is 6,336 points. The Nikkei stock average of Japan is at a high point of 28,631 while neighbouring India’s BSE Sensex is also at a record 48,875. The UK’s FTSE 100 was at its all-time high of 7,730 in 2018 but then fell due to the Covid-19 outbreak. It is now on the rise again and has jumped to stand at 6,695 as of January 22. It is the same scenario in Hong Kong, where the Hang Seng index topped 33,154 points in 2018 but now stands at 29,447. But this index is also in a rising trend. The central bank has asked scheduled banks to form a fund of Tk 200 crore to invest in the stock market.
Bourses see extensive profit booking
Bourses witnessed widespread profit-booking last week when the insurance stocks rose the most thanks to a regulatory move on minimum shareholding compliance. DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), dropped 73.14 points, or 1.24 per cent, during the week. Meanwhile, insurance stocks went upward riding on news that the regulator issued letters to all the companies to maintain a paid-up capital of Tk 30-40 crore. Almost all the top gainers were from the insurance sector. For instance, Agrani Insurance rose 21.9 per cent in the week followed by Provati Insurance and Islami Insurance. The Insurance Development and Regulatory Authority asked all insurance companies to comply with the minimum shareholding rule of 60 per cent by the sponsors in their respective companies and maintain a minimum paid-up capital of Tk 30-40 crore in a month. After this the insurance stocks started rising. Among listed 49 insurance stocks, 37 advanced and 12 declined in the last week. Insurance sector market capitalisation rose 1.6 per cent in the last week, according to the weekly market review of UCB Capital Management. In the last few weeks, insurance stocks have been declining after experiencing a continuous rise for a long time. However, the IDRA’s circular helped it to gain again, the stock broker said. In the last week, junk stocks got a hit so most of the low-performing companies’ stocks were red. Alltex Industries shed the most, falling 16.9 per cent followed by LafargeHolcim Bangladesh, Alif Manufacturing, Appollo Ispat, and Jute Spinners. Meanwhile, the DSE’s average daily turnover, another important indicator of the market, dropped 16.25 per cent to Tk 1,565 crore in the last week. The fuel and power sector dominated the turnover chart, covering 14.3 per cent of the total turnover.
LNG import rises in 2020
Bangladesh imported 8.97 million cubic metres of LNG in 2020, up 1.56 per cent from 2019. It brought 65 cargoes, each having around 138,000 cubic metres of LNG (liquefied natural gas), from January to December last year. The shipments included only one cargo from the spot market and the remaining 64 from term dealers. It has also a plan to import up to 24 LNG cargoes from the spot market if it gets the price at an expected level, a senior Petrobangla official told the FE. In the calendar year of 2019, Bangladesh imported a total of 64 LNG cargoes from term dealers. The state-run Rupantarita Prakritik Gas Company Ltd, a wholly-owned subsidiary of Petrobangla, imported an estimated 2.50 million tonnes from Qatargas in 2020. It also imported around 1.5 million tonnes of LNG from Oman Trading International (OTI) the same year. The lone LNG cargo from the spot market was supplied by Vitol Asia Pte Ltd in late September 2020. US’s Excelerate Energy started supplying regasified LNG from its FSRU commercially since August 18, 2018, and the local Summit Group since April 29, 2019. Both the FSRUs (floating storage regasification units) have the capacity to regasify an estimated 500-million cubic feet per day (mmcfd) of LNG. Currently, Bangladesh has been importing LNG under long-term deals from Qatargas and OTI. It is working to double LNG imports to around 1,000 mmcfd by 2021 and thereafter to 2,000 mmcfd by 2025. The currently operational two 3.75 Mtpa-capacity LNG import terminals-both FSRUs-will regasify LNG to ramp up output to around 1,000 mmcfd. LNG regasification will be 2,000 mmcfd from 2025 with the commissioning of a proposed 7.5 Mtpa land-based LNG import terminal. A report prepared by Copenhagen-based Ramboll in association with Geological Survey of Denmark and EQMS Consulting Limited says Bangladesh will need to import around 30 million tonnes of LNG annually to meet the mounting demand from sectors like industries, power plants and fertiliser plants by 2041.