Downtrend, liquidity shortage continue at DSE

FE Report The downtrend at the Dhaka Stock Exchange (DSE) continued for the fifth straight week that ended Thursday with significantly declining turnover in value terms, as investors were reluctant to make fresh exposure in the market in line with the ongoing liquidity shortage ahead of the Eid. "The ongoing liquidity shortage and high demand for money ahead of the Eid festival made the investors almost inactive, while many of them sold off shares ahead of festivity," commented a stock broker. The situation has already become very alarming, as various measures have failed to stabilise the market. It is further hit by the latest concern of the World Bank (WB) and the International Monetary Fund (IMF) as well as the finance minister's harsh comments, he also said. The third quarter (Q3) earnings of a number of companies and banks apparently failed to meet the investors' expectation, accelerating the sell-off during the week, the broker added. Market insiders said the market could not come out from its bearish trend, as most of the traders were reluctant to make fresh investment amid the ongoing liquidity shortage while many of them went home ahead of the nine-day Eid vacation. They said all positive steps to rejuvenate the capital market and boost the investors' confidence failed to create expected impact on the market. Rather, the falling trend is deepening, disappointing many investors. "The market has been in negative territory for five consecutive weeks, as all of the back to back market-bolstering regulatory and monetary initiatives apparently failed to revive the investors' confidence and bring back stability in the market," commented a stock broker. Meanwhile, the small investors took to the streets again on the first three sessions of the week to protest against steep fall of share prices and demanding normalcy in the capital market. They also threatened to launch tough agitation programme and organise a 'grand rally' in Dhaka on December 7, if the government fails to stabilise the market within December 6. The week witnessed five trading sessions as usual. Among them, one session gained, one session lost heavily, and the last two sessions closed flat. During the week, the DGEN, the DSE's benchmark index, went down by 99.82 points or 1.88 per cent to close at 5,208.97. The broader All Shares Price Index (DSI) shed 84.46 points or 1.90 per cent to close at 4,354.74. The DSE-20 Index, comprising blue-chip shares, was flat this week, losing only 2.34 points or 0.06 per cent to close at 3,871.76. The turnover value declined significantly this week, as trading volume went down ahead of the nine-day Eid holiday. The total turnover value stood at Tk 13.52 billion against Tk 20.7 billion in the previous week. The average daily turnover declined by 34.80 per cent in the week and stood at Tk 2.70 billion, compared to Tk 4.1 billion in the previous week. Thursday's turnover value was the lowest in almost three years, apart from Tk 680 million on January 20, 2011, when trading was suspended within first five minutes of the session. The previous lowest was Tk 1.09 billion on December 17, 2008. Out of the 266 issues traded during the week, only 42 advanced, 219 declined, while three remained unchanged. The market capitalisation was Tk 2,629.52 billion on the opening day of the week, and at the end of the week it stood at Tk 2,593.06 billion, 1.39 per cent lower. Among the major sectors, fuel and power and telecommunications were the only gainers in the week and advanced by 2.16 per cent and 0.06 per cent respectively. All the financial sectors retraced in the week. Banks, NBFIs, general insurance and life insurance lost 0.27 per cent, 6.93 per cent, 5.70 per cent and 2.15 per cent respectively. Pharmaceuticals, cement and tannery lost more than 1.0 per cent, while textiles retraced 5.85 per cent. Beximco Limited topped the week's turnover list with shares worth Tk 821.53 million changing hands. The other turnover leaders were Grameenphone, Titas Gas, Beximco Pharma, ONE bank, MI Cement, City Bank, Mercantile Bank, Social Islamic Bank, National Bank, UCBL and Summit Power. Power Grid Company was the week's highest gainer, posting a rise of 9.10 per cent. It was followed by DESCO, Stylecraft, Mercantile Bank, Eastern Bank, EBL NRB Mutual Fund One, Apex Tannery, National Tubes, IFIC Bank and Popular Life Insurance. The week's worst losers included Dulamia Cotton, BD Autocars, Rahim Textile, Meghna PET, Sonargaon Textiles, Meghna Condensed Milk, Tallu Spinning, Mithun Knitting, BD Finance and Purabi General Insurance. Twenty five companies made corporate declaration during the week. The companies are - Al-Haj Textile, Anlima Yarn, Anwar Galvanizing, BD Autocars, BDCOM Online, Beacon Pharmaceuticals, Chittagong Vegetable, Daffodil Computers, Delta Spinners, DESCO, Dulamia Cotton, Fine Foods, Fu-Wang Food, Malek Spinning, Meghna Condensed Milk, Meghna PET, Miracle Industries, National Tubes, Northern Jute, Olympic Industries, Samata Leather, Samorita Hospital, Savar Refractories, Shyampur Sugar Mills and Zeal Bangla Sugar Mills. Most of the financial institutions posted negative growth in their quarterly earnings. However, Islami Bank and Prime Bank achieved strong growth. On Sunday, the market plunged 231.65 points or 4.36 per cent to close at 5,077.12, which is 22 months' low since January 20, 2010, as the investors went for panic sale of shares amid street protest. The turnover value declined to Tk 3.30 billion against Tk 3.44 billion in the previous session. On Monday, the market continued its losing streak for the fourth straight session and lost 40.62 points or 0.80 per cent amid street protest, and the turnover declining further to Tk 2.90 billion, as institutional investors remained inactive. On Tuesday, the market rebounded, breaking the losing streak of four straight sessions and went up by 168.67 points or 3.34 per cent, while the turnover value came down to Tk 2.65 billion. However, the market was flat on the last two sessions - Wednesday and Thursday - with the DGEN gaining 0.08 per cent Wednesday and losing 0.01 per cent Thursday. Thursday's turnover value was the lowest in almost three years, since December 17, 2008 and stood at Tk only 1.81 billion.