Supportive measures such as margin loan facility expansion and injection of funds through the Investment Corporation of Bangladesh (ICB) helped stocks surge on Monday after a sharp fall since the beginning of the month.
DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), closed 1.94% higher at 6,261 points.
Thanks to the 343 scrips that advanced against a decline of only 19 of the DSE scrips while 14 remained unchanged over the session.
Finance Minister AHM Mustafa Kamal in a meeting with Bangladesh Bank Governor Fazle Kabir on Sunday called for supportive measures to avert further stock market volatility.
The central bank is set to hand over Tk153 crore to the ICB to lend more to small investors from a revolving fund alongside extending the tenure of the fund up to 2027.
The Tk153 crore which the central bank accumulated as interest income from the Tk900 crore revolving fund it had provided earlier.
On Sunday, the Bangladesh Securities and Exchange Commission (BSEC) said stockbrokers and merchant banks can provide margin loans up to 100% of their client equity to buy stocks with borrowed money, up from 80%.
The two in conjunction helped investors breathe as it reduced selling pressure in the market, especially from the leveraged investment accounts.
"Extended credit facilities for margin clients to reduce sell pressure amidst the bearish market have calmed down investors' nerves on the trading floor," wrote EBL Securities in its daily market commentary.
However, the confidence of most investors is yet to recover as uncertainties still persist due to the Russia-Ukraine war and volatile commodity prices globally.
Besides, the market observed a slight decrease in participation while the DSE turnover has declined by 3.4% to Tk659 crore. Meanwhile, turnover in the Chittagong Stock Exchange (CSE) increased to Tk24 crore from Tk17 crore.
DS30, the blue-chip index of the DSE, closed 1.43% higher on Monday at 2,309.8, while Shariah Index DSES closed 1.12% higher at 1,377.