DSEX dips below 4,600-mark amidst selling frenzy

Stocks extended their losing spell for the four straight weeks that ended Thursday with key index of the prime bourse dipping below the 4,600-mark as investors were concerned over macro- economic outlook.
Analysts say listed companies' lower-than-expected earning disclosures, concern over macro-economic condition, latest regulatory order on margin loans, pessimistic news on World Bank's ranking of the ease of doing business in Bangladesh, coupled with month-end adjustment in portfolio were responsible for the price erosion.
The market witnessed five trading sessions as usual. Of them, first session closed higher while last four sessions ended lower.
Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), dipped below the 4,600-mark to settle the week at four months low to 4,564.49, after slumping 83.19 points or 1.79 per cent.
The two other indices also declined substantially. The DS30 index, comprising blue chips, plunged 36.58 points or 2.08 per cent to finish at 1,725.97. The DSE Shariah Index fell 20.95 points or 1.88 per cent to end the week at 1,092.30.
The port city bourse Chittagong Stock Exchange (CSE) also saw steep decline with its Selective Categories Index - CSCX - shedding 144.97 points or 1.67 per cent to end the week at 8,491.62.
"Investors went for selling their stakes amidst concern regarding macroeconomic condition," said LankaBangla Securities, a stockbroker, in its weekly market analysis.
Recent de-growth in imports, exports and remittance made investors worried about the broad economy. Third quarter (Q3) earning declarations of corporate entities were mixed, which also made investors cautious, said the stockbroker.
Among the heavyweights, Lafarge Surma, GP and GSK registered de-growth in earnings, whereas Olympic Industries, BATBC and Square Pharma witnessed considerable growth in bottom-line in Q3, 2015, the stockbroker observed.
"As the 'psychological' support of 4,600 was broken, investors went for selling frenzy almost throughout the week," said the stockbroker.
The total turnover for the week stood at Tk 17.56 billion which was Tk 13.42 billion in the week before as last week saw five trading sessions instead of previous week's four.
The daily turnover averaged Tk 3.51 billion, which was 4.73 per cent higher than the previous week's average of Tk 3.35 billion.
"Market went through another gloomy week as depression gripped investors' mindset, shedding 83.2 points off of the prime index DSEX," said the IDLC Investments.
The merchant bank noted that continuous flow of quarterly earnings with mixed or lowers than expected disclosures put investors in a defensive mood to further positioning. Rather, clientele opted for spread search to book short-term profit or remained in sideline.
Moreover, the news of lower remittance flow as reported by Bangladesh Bank, erosion of competitiveness in export market as reported by World Bank, regulatory bar on providing margin loan in new issue and re-categorized issue for the first 30 trading sessions and pessimistic news on the ease of doing business in Bangladesh kept investors thinking again before participation in market activities, said the merchant bank.
Royal Capital, a stockbroker, said, "The market continued value erosion in last week with comparatively lower risk. All the sectors suffered in the week referred by the depreciation of sector market capitalisation".
Market risk regressed by 69.74 per cent last week in compared to the previous week, indicating lower market risk. However, the observations clarify that the trend of the market for the next week is negative, said the stockbroker.
Meanwhile, 51 listed companies recommended dividend during the week while a good number of listed firms disclosed third quarter financial reports.
The losers outpaced gainers as out of 327 traded issues, 212 closed lower, 92 advanced while 23 remained unchanged on the DSE trading floor last week.
The market capitalisation of the DSE went down by 1.59 per cent as it was Tk 3,220.02 billion on the opening day of the week and it stood at Tk 3,168.90 billion on closing day of the week.
Lafarge Surma Cement dominated the week's turnover chart with shares of Tk 576.54 million changing hands during the week followed by Shahjibazar Power, KDS Accessories, CVO Petrochemical Refinery and IFAD Autos.
Miracle Industries was the week's best performer, posting a rise of 52.44 per cent following its dividend declaration and asset revaluation news while Far Chemical was the week's worst loser, plunging by 27.01 per cent following its price adjustment after record date.
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