Banks spur rally of stock prices

Dhaka,  Thu,  27 July 2017
Published : 10 Mar 2017, 22:08:18
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Weekly market analysis

Banks spur rally of stock prices

Turnover remains encouraging on premier bourse
Babul Barman


Stocks rebounded last week that ended Thursday, after a single-week break, largely supported by bank, telecom and non-bank financial issues.

Analysts said the market rebounded as investors showed their buying appetite largely on heavyweight bank, telecommunication and non-bank financial institution stocks amid optimism.

"The banking sector kept the market afloat amid dividend expectation as most of the banks are yet to declare dividend," said an analyst at a leading brokerage firm.

The bank sector posted the highest gain of 2.92 per cent among the major sectors, closely followed by telecommunication 2.2 per cent and NBFI 1.80 per cent.

The bank sector also emerged as third highest turnover leader, grabbing 14 per cent of the week's total turnover value after pharmaceuticals and engineering.

"The news of 28 per cent rise net portfolio investment in stocks in February coupled with the finance minister's latest comments that lion's share of investment for the country's development should come from the capital market, also encouraged the investors," the analyst said.

The week featured five trading sessions as usual. Of them, first session faced 13.66 points correction while last four added 98.53 points.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 84.47 points or 1.52 per cent to settle the week at 5,671.62.

The two other indices also finished higher. The DS30 index, comprising blue chips, advanced 28.60 points or 1.42 per cent to finish at 2,049.64. The DSE Shariah Index gained 8.15 points or 0.62 per cent to close at 1,312.17.

The port city bourse, Chittagong Stock Exchange (CSE), also ended higher with its Selective Categories Index, CSCX, advancing 161 points or 1.53 per cent to close at 10,653.

The total turnover for the week stood at Tk 53.71 billion on the premier bourse against Tk 53.58 billion in the week before.

The daily turnover averaged at Tk 10.74 billion, which was 0.23 per cent higher than the previous week's average of Tk 10.72 billion.

"The average turnover in the week was Tk 10.74 billion, slightly higher than the previous week, reflecting investors increased confidence to the market," said AT Capital Partners, in an analysis.

International Leasing Securities, a stockbroker, said, "The market backed to the green after a single-week break as the enthusiastic investors were active on large-cap stocks".

The stockbroker noted that the market maintained the upbeat note riding on the news of 28 per cent rise in net foreign investment in February this year coupled with the finance minister's observations that cheered the investors to take fresh position on stocks.

"Buoyancy in several large-cap issues, mostly from bank, telecom and financial institution sectors also contributed to the upswing in indices anticipating the upcoming dividends," said the stockbroker.

Sheltech Brokerage, said, "The market started the week with volatility following previous week's trend but fought back from the second session as banks, NBFIs, textiles and pharmaceuticals came in focus".

The stockbroker noted that the investors were interested in cash dividends declared stocks for better dividend yield.

Only one company -- GlaxoSmithKline (GSK) recommended dividend last week. The multinational company recommended 500 per cent cash dividend for the year ended on December 31, 2016. In 2015, the company disbursed 550 per cent cash dividend.

 Out of 333 issues traded, 152 closed lower, 147 closed higher and 34 remained unchanged on the DSE trading floor.

The total market capitalisation of the DSE rose 0.94 per cent last week as it was Tk 3,729 billion on the opening day of the week, while it stood at Tk 3,764 billion on closing day of the week.

LankaBangla Finance dominated the DSE turnover chart for the second week with 37.36 million shares of Tk 2.43 billion changing hands, followed by Baraka Power, GPH Ispat, Islami Bank and Beximco.

Premier Leasing was the week's highest gainer, posting a 20.78 per cent gain, while Sub 25 per cent Coverable Bond of Brac Bank was the worst loser, slumping by 8.42 per cent.

A new issue-Shepherd Industries-made share trading debut last week on Wednesday. The sweater yarn manufacturer's share price jumped 431 per cent to close at Tk 53.10 on debut day.

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