Stocks tumble on selling spree

Dhaka,  Tue,  23 May 2017
Published : 21 Apr 2017, 22:13:37
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Weekly analysis

Stocks tumble on selling spree

DSEX dips to two-and-a-half month low
Stocks tumble on selling spree
Babul Barman


Stocks witnessed yet another bearish week that ended Thursday with falling turnover as prolonged downward trend in the market kept the investors worried.

Analysts said the market faced another setback as most of the investors were cashing in on stocks throughout the week to safeguard their position, fearing further fall, dragging down the market for another week.

"Ongoing pessimism coupled with lack of clear indication of the forthcoming market outlook kept the investors mostly inactive to put fresh funds, taking the market turnover further low," said an analyst at a leading brokerage firm.

City Bank Capital Resources, a merchant bank, said, "The correction was triggered by the continuing fall of bank and financial institution sectors' stocks".

Post-dividend price adjustment in some banks' share prices coupled with Bangladesh Bank's latest warning to 20 banks to recover defaulted loans, the bank sector faced further 3.38 per cent correction last week.

The week featured five trading sessions as usual. Of them, four sessions fell sharply by 127.49 points while one session saw 3.29 points gain.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 124.20 points or 2.20 per cent to settle the week at 5,521.66 points, which was the lowest level of DSEX in two and a half months since February 9, this year.

DSEX, the prime index of the DSE, lost about 255 points in the past 11 trading sessions, after reaching highest level at 5777 points since its introduction in January 2013, except 3.29 points gain on Monday last.

The two other indices also finished lower. The DS30 index, comprising blue chips, fell 36.90 points or 1.77 per cent to finish at 2,050.44. The DSE Shariah Index dropped 22.64 points or 1.75 per cent to close at 1,272.24.

The port city bourse, Chittagong Stock Exchange (CSE), also closed lower with its Selective Categories Index, CSCX, slumping by 225 points or 2.12 per cent to close at 10,368.

The total turnover for the week came down to Tk 34.33 billion against Tk 35.93 billion the week before with block trade contributed 3.7 per cent to the total weekly turnover.

The daily turnover averaged at Tk 6.86 billion, which was 4.46 per cent lower than the previous week's average of Tk 7.18 billion.

The bank sector kept its dominance in turnover chart for the fourth straight week, capturing 22 per cent of the week's total turnover value, followed by textile 17 per cent and financial institutions 13 per cent.

"Sell-off in large-cap stocks tumbled the DSEX for the entire week and DSEX ended red in every session except Monday, due to lack of confidence among investors," said Sheltech Brokerage, in its weekly market analysis.

EBL Securities, a stockbroker, said, "Trading activities of the investors fell again as they refrained themselves to inject fresh fund in the market thus sessions progressed amid sale pressure throughout the week".

The stockbroker noted that investors' indecisive mindset and consciousness of further correction mainly followed by latest quarter earning disclosure pushed them to remain in the sidelines.

LankaBangla Securities, a stockbroker, said, "Most large-cap financial stocks lost price last week. Looking at the top 20 large-cap stocks, all except four stocks experienced major price falls".

The large-cap sectors showed mostly negative performances. The financial institutions was the biggest loser, slumping by 3.42 per cent, closely followed by banks 3.38 per cent, engineering 3.05 per cent, telecommunication 1.1 per cent and pharmaceuticals 0.63 per cent.

Food and allied and fuel and power managed to closed green with advancing 0.54 per cent and 0.41 per cent respectively.

There are seven listed companies, including three banks, recommended dividend last week for the year ended on December 31, 2016.

Most of the traded issues price tumbled last week. Out of 332 issues traded, 231 closed lower, 76 closed higher and 25 remained unchanged on the DSE trading floor.

The total market capitalisation of the DSE also fell 1.26 per cent last week as it was Tk 3,783 billion on the opening day of the week, while it came down to Tk 3,735 billion on closing day of the week.

LankaBangla Finance dominated the week's turnover chart for the third straight week with about 4.30 million shares of Tk 2.36 billion changing hands, followed by Shahjibazar Power Company, City Bank, Ratanpur Steel Re-rolling Mills and Regent Textile Mills.

BDCOM Online was the week's biggest gainer, posting a 25.66 per cent rise, while IFIC Bank was the worst loser, slumping by 33.46 per cent following its price adjustment after record date.

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