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Dhaka stocks, led by banks and pharmaceuticals, continued its rally for a fourth straight session as analysts predicted a vibrant market ahead, with inflow of foreign funds and return of political stability.
Brokers said the share prices were now attractive to investors following a recent fall in a bearish market. They said the prices might continue to pick up as many of the shares had hit the bottom.
Dhaka Stock Exchange (DSE) All-Share Price Index (DSI) rose 6.13 points or 0.5 per cent to 1215.42 at the close of trading Thursday. Of the total traded stocks, 120 gained, 44 lost and 17 remained unchanged.
The analysts said the market has already weathered several negative factors such as the political turmoil and terror attacks.
"Political situation is now better and the country's image looks brighter. The negative side has already been discounted," said one fund manager, who requested not to be quoted.
He said the market is now expected to pick up as many of the shares touched their bottoms. The future of the market also looks positive as foreign funds have started flowing in.
"Foreign fund is now pouring in as the investors in neighbouring India see the market saturated there," he said.
He said companies such as Square Pharmaceuticals, Square Textiles, Beximco Pharmaceuticals and Apex Footwear are attractive for investment.
Earning per share of Square Pharma is good and half-yearly results of Apex Footwear is better than expected, he said adding that Beximco Pharma might offer bonus share in addition to a likely 10 per cent dividend for 2005.
On Thursday, Square Pharma share shot up by 7.39 per cent to Tk 2313.25 on a volume of 4,585 shares worth Tk 10.34 million.
"I don't see any reason for such a rise of Square Pharma in a single day. The market is behaving somewhat erratically," said one broker.
He smelled involvement of a "chain" in manipulation of share prices leading to irrational behaviour of the market. "There are people who gamble with shares in the market," he said.
But he added the market is now steady and it is likely that share prices will start rising from this October when the caretaker government will be formed to oversee general elections.
But another broker said Square Pharma, a prospective stock, gained because it was under-priced.
There were mixed performances by the banks. Dhaka Bank lost 5.42 per cent to close at Tk 388.25 on a volume of 14,550 shares worth Tk 5.63 million. Southeast Bank rose 0.16 per cent to Tk 591, being the volume leader with 34,250 shares worth Tk 20.41 million trading.
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