Weekly analysis: Stocks keep gaining as bank shares shine

Dhaka,  Sat,  23 September 2017
Published : 04 Aug 2017, 21:42:20 | Updated : 05 Aug 2017, 09:38:27
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Weekly analysis: Stocks keep gaining as bank shares shine

Turnover leaps 71pc on prime bourse
Babul Barman

Stocks extended the winning streak for the second straight week with high turnover, as investors' appetite for buying large-cap stocks, especially banks, continued to grow.

Dealers said the market maintained the gaining momentum riding on the wave of investors' enthusiasm for bank issues, as most of the banks showed their positive earnings for the April-June quarter.

During this week, the bank sector posted a significant gain of 4.93 per cent, with seven banks making their way to the top 10 gainers' charts. The seven banks -- Rupali Bank, Eastern Bank, Trust Bank, Premier Bank, Dutch-Bangla Bank, City Bank and Bank Asia -- gained 16.67 per cent, 15.18 per cent, 13.40 per cent, 13.08 per cent, 11.57 per cent, 9.69 per cent and 9.60 per cent respectively.

The bank sector also dominated the turnover chart, contributing 29 per cent turnover to the week's total transactions, followed by textile (14 per cent) and financial institutions (11 per cent).

"Stocks from banks have been the driving force to push the index up while stocks from mutual fund, food & allied and services & real estate sectors also attracted buyers," said an analyst at a leading brokerage firm.

The week featured five trading sessions as usual. The key index of the prime bourse accumulated a gain of 89.12 points in three sessions while remaining two sessions shed 23.74 points.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), which replaced the DGEN in four-and-a-half-year back, went up by 65.38 points or 1.12 per cent to settle at 5,880.

"The positive earnings declaration of several large-cap companies along with dividend declaration of some major stocks could be the reason for such gains in the index," commented LankaBangla Securities, a stockbroker, in its weekly market analysis.

However, two other indices saw mild corrections. The DS30 index ended down 5.98 points, or 0.28 per cent, at 2,123 while the Shariah Index (DSES) finished 6.02 points, or 0.46 per cent, lower at 1,312.

Meanwhile, the port city bourse, Chittagong Stock Exchange (CSE), closed higher, with its Selective Categories Index, CSCX, rose 116 points, or 1.06 per cent, to 11,013.

International Leasing Securities, a stockbroker, said, "Stocks observed a modest gain as the enthusiastic investors showed their buying appetite on banks amid optimism."

However, some shaky investors booked quick-gain in the last session of the week following the news that July saw net foreign investment in stocks declining, compared to the previous month, said the stockbroker.

The total turnover of the week rose sharply to Tk 53.22 billion on the premier bourse from Tk 31.17 billion in the previous week.

 The turnover averaged Tk 10.64 billion a day, nearly 71 per cent higher than the previous week's average of Tk 6.23 billion.

"This gain was triggered by the positive movement of banking sector as most of the bank declared satisfactory earnings," said City Capital Resources, a merchant bank.

The merchant bank noted that the bank sector contributed 0.55 per cent to total weekly gain of 1.12 per cent.

Block trade contributed 1.0 per cent to the total weekly turnover, with stocks like SIBL, Brac Bank, Rahima Food, ACI, IDLC Fiannce and RAK Ceramics dominating the block trade board, the merchant bank said.

The total market cap of the DSE also edged up 0.62 per cent, as it was Tk 3,931 billion on the opening day of the week while the figure rose to Tk 3,956 billion on the closing day of the week.

LankaBangla Finance topped the week's turnover chart for the two consecutive weeks, with shares of Tk 2.45 billion changing hands, closely followed by City Bank with Tk 2.03 billion, BBS Cables Tk 1.33 billion, C&A Textile Tk 1.25 billion and ONE Bank Tk 1.15 billion.

Dulamia Cotton Spinning Mills, a 'Z' category company, was the week's highest gainer, posting 47 per cent gain, while Pragati Life Insurance Company was the biggest loser, shedding 16.07 per cent.

A new issue -- BBS Cables -- made its debut on Monday. The newcomer's share price leapt 803 per cent from its offer price of Tk 10 each on its first day on the DSE.

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