Weekly market review

Stocks stare at more losses as investor sentiment drops

DSEX sheds 91 points in past four weeks

| Updated: February 25, 2023 17:38:39

Stocks stare at more losses as investor sentiment drops

Stocks extended losses for a fourth week to Thursday, as gloomy economic outlook continues to weaken investor confidence amid liquidity crisis in the market.

Jittery investors opted to liquidate their positions across the trading floor, pushing the benchmark equity index down further, market insiders said.

Some of the recently rallied stocks extended their correction mode owing to profit-booking tendency as investors scrambled to secure short-term gains from the ailing market.

Also, following dismal financial performance of majority of listed companies in the latest quarter, investors stayed away from taking long-term positions in equities.

This week, all the four trading days saw price erosion while the market remained closed on Tuesday on the occasion of Amar Ekushey and International Mother Language Day.

Registering a fall of 41.09 points, the benchmark DSEX index of the Dhaka Stock Exchange (DSE) settled the week at 6,205. The DSEX shed a total of 91 points in the past four weeks.

"Investors prefer short-term gains since their willingness to take long positions in equities have been weakened owing to an unclear market indication that eventually led to volatility in the market," commented EBL Securities.

The liquidation opportunities have been squeezed as investors did not perceive the majority of scrips lucrative at their reference floor price, said the stockbroker.

"The panic-driven investors dumped their holdings and preferred to hold cash on hand because of the rumours of lifting the floor prices."

Investors had been concentrated on selective stocks for long while strong fundamental shares were stuck at floor price which is a major barrier to bringing stability to the market.

According to the International Leasing Securities, most of the investors followed a cautious stance amid a lack of clear direction of the future market movement.

The market opened with a downward trend that sustained throughout the week due to the lack of confidence among the investors, it said.

The panic-driven investors dumped their holdings and preferred to hold cash on hand because of the rumors of lifting the floor prices. However, the regulator has not declared anything regarding floor price withdrawal, said the stockbroker.

The growing economic worries, dismal earnings disclosures of most listed companies coupled with liquidity shortage in the banking sector altogether weighed on investors' sentiment, said Mostaque Ahmed Sadeque, former president of DSE Brokers Association.

In the absence of potential buyers, the market turnover is drying up while the large-cap stocks that dominated the market turnover chart previously remained stuck at floor price level.

As a result, total turnover this week dropped to Tk 10.93 billion, down from Tk 21.11 billion in the week before as the last week saw four trading days instead of regular five days.

And the average daily turnover came down to Tk 2.73 billion, a 35 per cent drop from the previous week's average turnover of Tk 4.22 billion.

Investors were mostly active in the IT sector, capturing 15 per cent of the week's total turnover, followed by the food sector (13.4 per cent) and pharmaceuticals (11.7 per cent).

Most of the major sectors suffered losses, with general insurance incurring the highest loss of 3.25 per cent, followed by life insurance (1.76 per cent), pharma (0.55 per cent), food (0.30 per cent) and power (0.10 per cent).

Two other indices also closed lower with the DSE 30 Index, comprising blue chips, shed 2.86 points to finish at 2,221 and the DSE Shariah Index (DSES) dropped 10.76 points to close at 1,356.

ICB AMCL CMSF Golden Jubilee Mutual Fund was the week's top gainer, soaring 20 per cent while Bangladesh General Insurance was the top loser, falling 19.10 per cent.

The Chittagong Stock Exchange (CSE) also ended lower with its All Share Price Index -- CASPI -- shedding 93 points to settle at 18,335 and the Selective Categories Index -- CSCX -- losing 57 points to close at 10,990.

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