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2019-05-11 14:32:06 BdST

Weekly analysis: Stocks retreat after one-week rise

Even as the government took some market-supportive measures, stocks slipped back into the red in the outgoing week after a one-week break.

Thursday was the last trading day of the week.

Market analysts said investors mostly adopted cautious stance in the holy month of Ramadan while some others sold their shares after a number of companies reported disappointing quarterly earnings.

The week saw five trading days as usual. Of them, two sessions closed positive while three other sessions witnessed correction.

Week on week, the DSEX, the prime index of the Dhaka Stock Exchange (DSE), settled 10.92 points or 0.21 per cent lower at 5,275, after gaining 20 points in the previous week which snapped the 13-week losing streak.

After the DSEX eroded 775 points in those 13 weeks, the government took a set of market-supportive measures to lift the investors' sentiment.

Prime Minister Sheikh Hasina also stepped in to resolve the crisis by holding meetings with the market regulator and the finance minister.

As part of market-supportive measures, the government extended the tenure of the capital market refinancing scheme up to December 31, 2022 while the securities regulator enforced the extended lock-in period for placement shareholders and sponsors on Thursday.

These measures, however, virtually failed to restore investors' confidence, said a leading broker.

At the same time, he expressed optimism that the market will soon rebound as the central bank decided to exempt banks' investments in non-listed companies from capital market exposure, a move that can give banks plenty of room for fresh investments in the stock market.

Two other indices of the premiere bourse also slipped into the red in the outgoing week. The DS30 index, comprising blue chips, fell 19.23 points to finish at 1,851 and the DSE Shariah Index lost 4.67 points to close at 1,220.

The total turnover stood at Tk 21.45 billion, up from Tk 15.33 billion in the week before.

The daily turnover averaged out at Tk 4.28 billion, registering an increase of 12 per cent over the previous week's average of Tk 3.83 billion.

Block trade contributed 3.0 per cent to the week's total turnover, with stocks like National Bank, Mutual Trust Bank, Jamuna Bank, Esquire Knit Composite and Fortune Shoes dominating the block trade board.

According to the International Leasing Securities, the shaky investors were worried about the ongoing gloomy market, liquidity shortage in the financial sector and rising deposit interest rate in the banking sector.

The stockbroker also noted that the sell pressure was fuelled by the disappointing dividend and earnings of the listed companies and the declining net foreign investment in recent months.

The large-cap sectors showed mixed performances. Among the major sectors, telecommunications posted the highest loss of 1.41 per cent, followed by pharmaceuticals (0.90 per cent), and non-bank financial institutions (0.10 per cent).

The engineering sector witnessed the highest gain of 0.67 per cent, followed by the power (0.29 per cent) and banking sectors (0.34 per cent).

The market capitalisation of the DSE also fell 0.07 per cent to Tk 3,885 billion on Thursday, down from Tk 3,888 billion in the week before.

Losers outnumbered the gainers, as out of 351 issues traded, 179 closed lower, 152 ended higher and 20 issues remained unchanged on the DSE floor.

Fortune Shoes dominated the turnover chart, with 34.69 million shares worth Tk 1.33 billion changing hands. The company accounted for 6.20 per cent of the week's total turnover.

The other turnover leaders were Monno Ceramic, Esquire Knit Composite, Power Grid Company and Indo-Bangla Pharma.

The National Feed Mill was the week's best performer, posting a gain of 23.76 per cent while Eastern Bank became the worst loser, plunging 18.06 per cent.

However, the port city bourse, Chittagong Stock Exchange (CSE), ended marginally higher, with its CSE All Share Price Index -- CASPI -- advancing 26 points to settle at 16,186 and the Selective Categories Index -- CSCX -- gaining 17 points to finish at 9,800.

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