DSEX hits five-week low as ‘Z’ stocks soar

Despite the equity benchmark index plunging to a five-week low this week, shares of underperforming companies, known as junk stocks, saw an unexpected surge, signalling potential market manipulation.
Over the past few weeks, six of the top ten weekly gainers have come from the 'Z' category, prompting analysts to raise concerns about possible price manipulation driving the unusual price increases.
A case in point is Khulna Printing & Paper, a non-operational entity that has dominated the weekly gainers list for two consecutive weeks. The company's share price increased by 28.6 per cent this week to Tk 17.1 on Thursday, following a 30.4 per cent rise the previous week.

Khulna Printing's factory has been producing nothing since October 2021 as it was suffering from a severe working capital and incurring losses for the past five consecutive years. The accumulated losses piled up to Tk 960 million until FY22 and since then it did not publish any financial reports.
Despite such a grim performance, Khulna Printing stock more than doubled in a month without any reason for investors to be keen on betting on the stock.
Others top weekly gainers from 'Z' category include Central Pharma, Alltex Industries, Yeakin Polymer, New Line Clothing and Dacca Dyeing.
On the other hand, stocks of well-performing stocks such as Renata, BRAC Bank and Beximco Pharma fell 6.15 per cent, 2.4 per cent and 4 per cent respectively this week.
The non-performing stocks are significantly beating their industry peers nowadays that are in regular business operation, posting profits and giving dividends to their shareholders.
MARKET PERFORMANCE
This week, investors remained largely reluctant to make new investments in stocks due to the bleak market outlook amid the confidence crisis.
The investor anxiety over potential inflationary shocks from the recent tax hikes, along with adverse reactions to the latest interest rates hiked of savings certificates affected the already depressed market, said a leading stockbroker.
Consequently, the market witnessed a dominant sell pressure and all five trading days of the week ended lower.
DSEX, the key index of the Dhaka Stock Exchange (DSE), finally settled the week 60.5 points or 1.16 per cent lower at 5,134. The DSEX shed almost 66 points in the past two straight weeks.
The blue-chip DS30 index, a group of 30 prominent companies, also plunged 30 points to 1,894 while the DSES index, which represents Shariah-based companies, fell 11 points to close at 1,150.
In its weekly market review, EBL Securities said the market witnessed another dismal week as investor sentiment was further triggered by apprehension of an impending inflationary pressure following the recent tax hikes.
Most investors preferred to remain cautious amid forthcoming earnings declarations and upcoming monetary policy announcement at the end of this month, said the stockbroker.
Price erosion of selective large-cap stocks such as Islami Bank, Renata, BRAC Bank, Beximco Pharma and Midland Bank jointly accounted for a 42-point fall in the key index.
Islami Bank, which plunged 5.6 per cent this week, contributed an 18.8-point fall to the key index alone. The bank's stock closed at Tk 46.5 on Thursday following its removal from the blue-chip group as part of the DS30 index rebalancing.
Turnover, a crucial indicator of the market, stood at Tk 18.90 billion this week, up from Tk 17.33 billion the previous week.
Consequently, the average daily turnover rose 9 per cent to Tk 3.78 billion, up from Tk 3.46 billion the previous week.
Investors were mostly active in the pharma sector, which accounted for 15 per cent of the week's total turnover, followed by banking (12 per cent) and engineering sector (12 per cent).
Most of the traded stocks saw price erosion, as out of 396 issues traded, 263 closed lower and 109 higher while 24 remained unchanged.
The large-cap sectors saw negative performance. Among the major sectors, banking saw the highest fall of 3.2 per cent, followed by food (3.1 per cent), telecom (1.2 per cent) and power (0.9 per cent).
Khan Brothers was the most-traded stock with shares worth Tk 635 million changing hands, as the company was added to the blue-chip index as part of the index rebalancing. Fine Foods, Grammeenphone, Orion Infusion and Aftab Automobiles are the other most-traded stocks.
The Chittagong Stock Exchange (CSE) also ended lower this week, with CSE All Share Price Index (CASPI) losing 108 points to settle at 14,352 and its Selective Categories Index (CSCX) shedding 39 points to close at 8,728.
The port-city bourse traded 15 million shares and mutual fund units, with a turnover value of Tk 838 million.
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