Weekly market review: Stocks flounder on selling spree

Weekly turnover plunges 35pc on DSE

| Updated: February 21, 2023 08:26:15

Weekly market review: Stocks flounder on selling spree

Stocks extended the losing streak for a third straight week to Thursday as sellers kept their dominance on the trading floor amid lack of clear direction of the market.

Some of the recently rallied stocks extended their correction mode owing to profit-booking tendency among investors aiming to secure short-term gains from the ailing market, market operators said.

Investors' appetite for taking long term positions in equities has been weakened due to the dismal financial performance of the majority of listed companies in the most recent quarter.

Of the five trading days this week, three sessions suffered losses while the two others posted modest gains but failed to pare those losses.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), ultimately finished the week at 6,246.21, with a fall of 37.10 points. The DSEX lost 50 points in the past three weeks in a row.

The stock market passed another gloomy week as the investors mostly followed a cautious stance amid the liquidity crisis in the market, said International Leasing Securities.

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

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, market analysts said.

A recent report published by a global research firm-Morgan Stanley Capital International (MSCI) -- expressing concerns over the liquidity crisis in the capital market of Bangladesh has hampered the already dampened investors' confidence, said EBL Securities.

Foreign investors usually decide to invest in the Bangladesh stock market based on the Morgan Stanley reports.

Most of the investors remained pessimistic and reluctant to make fresh investments in the stocks as they failed to find any clear direction about the future market movement, said the EBL Securities.

The investors are also concerned about the macroeconomic indicators like inflation, interest rate and dollar crisis in 2023. Though the indicators are approaching stability, the investors are still suffering from the confidence crisis.

As a result, investors' participation in the market dropped 35 per cent to Tk 21.11 billion in total. And the average daily turnover stood at Tk 4.22 billion as against Tk 6.49 billion in the week before.

Bangladesh Shipping Corporation became the week's turnover leader with shares worth Tk 1.44 billion changing hands, closely followed by Genex Infosys (Tk 1.40 billion), Shinepukur Ceramic (Tk 1.03 billion), Olympic Industries (953 million) and Sonali Paper & Board Mills (Tk 898 million).

Of 375 issues traded, 197 remained unchanged, 151 declined while 27 advanced on the DSE floor.

Al-Haj Textile Mills was the top gainer, posting a 15.12 per cent rise while ICB AMCL CMSF Golden Jubilee Mutual Fund was the worst loser, losing 24.24 per cent.

Most of the major sectors suffered losses with general insurance incurring the highest loss of 3.73 per cent, followed by mutual fund 2.55 per cent, life insurance 1.54 per cent, pharma 0.61 per cent and food 0.32 per cent.

Two other indices also ended lower with the DSE 30 Index, comprising blue chips, shed 11 points to finish at 2,224 and the DSE Shariah Index (DSES) dropped 5.28 points to close at 1,366.

The Chittagong Stock Exchange (CSE) also ended lower, with the CSE All Share Price Index (CASPI) shedding 107 points to settle at 18,428 and its Selective Categories Index (CSCX) losing 65 points to close the week at 11,047.

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