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Stocks break 13-day slump riding on financial stocks

FE Report | May 22, 2018 00:00:00


Stocks got back to green territory Monday, snapping the longest ever 13-session bearish spell, as optimistic investors took position on undervalued shares.

Brokers said the market rebounded moderately after substantial losses as investors showed their buying appetite on sector specific stocks, especially banking and non-bank financial issues.

"Against the backdrop a free fall of 423 points in the past 13 straight sessions, prices of many fundamental issues came down to a lucrative level, prompting some investors to take position," said an analyst at a brokerage firm.

However, he said, a section of investors was following cautious stance amid concerns over ongoing liquidity crisis in the banking sector and ahead of national budget.

Following the previous 13-session fall, the market opened on pessimism. However, the downbeat note reversed by the active presence of the bargain hunters. The core index rose about 56 points in the mid-session. But, late hours' selling binge eroded most of the early gains.

Finally, the key index of the major bourse closed more than 22 points higher and CSE All Share Price Index (CASPI) advanced 57 points at closing.

DSEX, the core index of the Dhaka Stock Exchange (DSE), settled at 5,413, advancing 22.58 points or 0.42 per cent after shedding 423 points in the past 13 consecutive sessions.

"Stocks broke the 13-seesion losing streak as opportunist investors took position on undervalued stocks," commented EBL Securities, in its regular market analysis.

The DSE Shariah Index (DSES) gained 2.93 points or 0.23 per cent to close at 1,268. However, the DS30 index, comprising blue chips, fell 1.92 points or 0.09 per cent to finish at 2,007.

The market activities also increased and the total turnover on the DSE amounting to Tk 5.62 billion, which was 42 per cent higher than the previous day's Tk 3.95 billion.

Fuel & power sector dominated the turnover chart, capturing 15 per cent of the day's total transactions. It was closely followed by engineering with 14 per cent and textile 13 per cent.

"The investors took position on the lucrative price levels in different stocks, especially on the financial institution, textile and banking sectors' stocks, that spurred the bourse to nudge higher," commented International Leasing Securities, in an analysis.

The stockbroker noted that the investors' buying pressure was visible on stocks from bank, financial institutions and fuel & power sectors.

Among the major sectors, non-bank financial institutions posted the highest return of 1.10 per cent, followed by banking sector with 0.50 per cent, power 0.40 per cent, food & allied 0.20 per cent and engineering 0.10 per cent.

Telecommunication and pharmaceuticals sectors continued to fall, losing 0.70 per cent and 0.20 per cent respectively.

The gainers took a modest lead over the losers as out of 333 issues traded, 199 closed higher, 94 closed red and 40 issues remained unchanged on the DSE trading floor.

Intraco Refuelling Station topped the day's turnover chart for the third straight day with shares worth Tk 286 changing hands, closely followed by Grameenphone, Beximco, BRAC and Square Pharmaceuticals.

Prime Life Insurance was the day's best performer, posting a gain of 8.48 per cent while Karnaphuli Insurance Company was the day's worst loser, shedding 11.46 per cent.

The port city's bourse CSE also returned to the green zone with its CSE All Share Price Index - CASPI -gaining 53 points to settle at 16,688 and the Selective Categories Index - CSCX -advancing 33 points to finish at 10,093.

Here too, the gainers beat the losers as 117 issues closed higher, 85 loser and 23 remained unchanged on the CSE.

The port city bourse traded 7.36 million shares and mutual fund units worth more than Tk 297 million in turnover.

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