Stocks
Asian Markets Slide Amid Concerns Over Prolonged High Interest Rates
Asian markets experienced a decline on Tuesday, driven by concerns about interest rates following hawkish remarks made by a senior Federal Reserve official, signaling that the central bank was likely to maintain higher rates for an extended period.
Despite a significant drop in the past year, inflation in the United States continues to remain stubbornly above the Federal Reserve’s long-term target of two percent. This has led the majority of Fed officials to predict the necessity of another rate hike later this year.
Federal Reserve Vice Chair for Supervision, Michael Barr, conveyed his expectation at a conference in New York on Monday that interest rates would need to be kept at a “sufficiently restrictive level” for an extended period to control inflation. Barr’s comments align with the views of most of his colleagues, who recently lowered their expectations for the number of rate cuts in 2024, indicating an extended period of elevated rates.
Since March 2022, the Fed has increased its key lending rate 11 times, reaching a 22-year high. With inflation persistently exceeding its target, there is a consensus that “the Fed is gonna keep rates high and we are expecting higher rates for longer,” as noted by Xi Qiao, Managing Director for Wealth Management at UBS, in an interview with Bloomberg Television. However, this could potentially bring caution to the equity markets.
On Wall Street, trading ended with mixed results after a congressional deal was reached to avert an immediate US government shutdown. However, bond markets experienced a significant sell-off.
Stephen Innes from SPI Asset Management commented on the situation, stating, “Any ‘relief rally’ from the US government spending deal appears to have been short-lived as bond markets witnessed a deepening selloff, leading to rising yields across the curve.”
The yields on US Treasury bonds, especially the 10-year and 30-year bonds, remained notably high, reaching levels not seen in years. These Treasury bond yields are closely monitored as indicators of US interest rates.
Innes explained, “This yield surge reflects the market’s response to messaging from the Federal Reserve, indicating the central bank’s commitment to keeping borrowing costs elevated to combat inflation.”
Hong Kong led the decline in Asian equities on Tuesday, falling by nearly three percent as the market resumed trading following a holiday weekend. In contrast, the heavily indebted Chinese property giant, Evergrande, witnessed a stock price increase as it resumed trading in Hong Kong, days after its CEO was announced to be under criminal investigation.
Other Asian markets, including Tokyo, Sydney, Wellington, Singapore, Manila, and Bangkok, also saw declines, while Taipei and Jakarta remained relatively flat. Kuala Lumpur was the only market to register gains.
Dhaka Stock Market DSE, Bourse on the second working day of the week, 30th September, ended with a negative performance in Indices and a hike in Turnover from the previous working session. This information is known from DSE sources.
503 crore 90 lakh taka shares were traded on this day. 22 crore 58 lakh more tradings were done in DSE today compared to the previous workday, 29th September, Shares worth Tk 481 crores 31 lakh shares were traded last time, Sunday.
The benchmark DSEX lost 33.61 points or 5,624 The Shariah-based index DSES dropped 7.36 point or 1,263 and the blue-chip index DS30 decreased by 9.57 points or 2,053.
Of the issues traded, 72 advanced, 299 declined and 25 remained unchanged.
Shahjibazar Power Company Limited ranked top gainer on DSE, the share price increased by Tk 4.00 paisa or 9.76 percent. On this day, the share was last traded at Tk 45.00 paisa.
Dhaka Electric Supply Company Limited ranked top loser on the DSE, the share price dropped by Tk 1.80 paisa or 7.56 percent. On this day, the share was last traded at Tk 22.00 paisa.
DSE topped on trade is Pragati Life Insurance Limited 25 crore 35 lakh takas of company shares have been traded.
A total of 27 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 50 lakh 42 thousand 956 shares of the companies were traded. The financial value of which is 65 crore 60 lakh taka
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
