Stocks stay positive riding on banks

Dhaka,  Wed,  20 September 2017
Published : 17 Mar 2017, 21:20:39
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Weekly market analysis

Stocks stay positive riding on banks

DSE market cap hits all-time high
Stocks stay positive riding on banks
Babul Barman


Stocks edged higher last week that ended Thursday as optimistic investors continued their buying spree largely on issues under banks, engineering and non-bank financial institutions.

Analysts said the banking sector kept the market afloat as investors took position on bank equities amid dividend expectation, taking the core index of the prime bourse above 5700-mark once again.

"The positive trend of the market was largely supported by healthy gain of banks as investors took bank issues expecting better dividend as most of the banks are yet to declare dividend," said an analyst at a leading brokerage firm.

He noted that newspaper reports on earning hefty net profits by most of the listed PCBs in 2016, attracted the investors to the bank issues.

Accordingly, the bank sector posted the highest gain of 1.66 per cent among the major sectors, contributing more than 21 per cent to the week's total turnover value.

The week featured five trading sessions as usual. Of them, four sessions closed positive while one saw mild correction.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 29.65 points or 0.52 per cent to finish the week at 5,701.27 points.

"Prime index of the major bourse registered a cumulative gain of 115 points in the past two consecutive weeks and bank sector helped market to stay in green zone ahead of corporate disclosure," commented City Bank Capital Resources, a merchant bank, in its weekly market analysis.

Lankabangla Securities, a stockbroker, said, "Index regained its positive momentum after an article published by a newspaper revealed private commercial banks' earnings".

Quoting the newspaper reports, the stockbroker noted that the private commercial banks saw 17.2 per cent growth in net profit last year, a development that will bring cheer for stock market investors.

The DS30 index, comprising blue chips, advanced 10 points or 0.49 per cent to settle at 2,059.63. However, the DSE Shariah Index fell 1.10 points or 0.08 per cent to close at 1,311.08.

The port city bourse, Chittagong Stock Exchange (CSE), also edged higher with its Selective Categories Index, CSCX, advancing 76 points or 0.71 per cent to close at 10,729.42.

"The market's positive vibe was triggered by the newspaper reports of rising net profit of private commercial banks in 2016," said International Leasing Securities, a stockbroker, in an analysis.

The stockbroker noted that the shaky investors continued their profit taking mood whereas the active presence of the bargain hunters helped the benchmark index to cross 5,700 points after January 24, 2017.

EBL Securities, a stockbroker, said, "The upbeat trend of the prime bourse was triggered by healthy dividend expectation from the banks like previous week as most of the investors' activities were mostly concentrated on banks".

The total turnover for the week stood at Tk 51.88 billion on the premier bourse against Tk 53.71 billion in the week before.

The daily turnover averaged at Tk 10.38 billion, which was 3.40 per cent lower than the previous week's average of Tk 10.74 billion.

Three listed companies - Lafarge Surma Cement, Pubali Bank and Trust Bank recommended dividend last week. Lafarge recommended 5.0 per cent final cash dividend, Pubali Bank 5.0 per cent cash and 8.0 per cent stock and Trust Bank recommended 15 per cent cash and 10 per cent stock dividend.

Out of 333 issues traded, 161 closed higher, 143 closed lower and 29 remained unchanged on the DSE trading floor.

The total market capitalisation of the DSE also advanced 0.21 per cent last week as it was Tk 3,764 billion on the opening day of the week, while it stood at nearly Tk 3,772 billion on closing day of the week, reaching all-time high level.

LankaBangla Finance dominated the DSE turnover chart for the third week in a row with 34.54 million shares of Tk 2.03 billion changing hands, followed by Beximco, Far Chemical Industries, IFIC Bank and Beximco Pharmaceuticals.

Tosrifa Industries was the week's highest gainer, posting a 16.81 per cent gain, while RN Spinning Mills was the worst loser, slumping by 13.64 per cent following its price adjustment after record date.

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