Stocks break 13-week winning streak

Stocks drifted lower last week that ended on Thursday, snapping a 13-week gaining streak, as risk-averse investors opted for booking profit on quick-gaining stocks.
Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 125.87 points or 2.47 per cent to settle at 4,978, after a cumulative gain of 1,144 points in the past 13 consecutive weeks.
Market operators said stocks faced correction with profit-taking on large-cap issues, especially from food, banking, pharmaceuticals and telecom sectors which saw substantial gain in recent price surge.
The revised margin loan policy by the stock market regulator also affected investors to put fresh stake in stocks as the regulator set maximum margin loan limit in line with the DSE core index, they said.
The Bangladesh Securities and Exchange Commission (BSEC) issued an order revising the margin loan ratio last week which will come into force from October 1.
According to the order, merchant banks or brokerage firms will now be able to provide margin loan to their clients at a maximum limit of 1:1 when the DSEX will stand below 4,000.
"Profit booking, particularly on heavyweight food & allied banking and telecom issues pulled stocks down as the market was bullish in the past 13 straight weeks," said a stockbroker.
The market witnessed much-expected correction and there is nothing to fear from the fall of the index, said a merchant banker adding that this is creating an opportunity for some investors to make fresh investments.
"The market witnessed a natural correction, as cautious investors intended to realise the profit generated from the previous few weeks", said the merchant banker.
Share trading debut of Walton Hi-Tech Industries during the week also created some sell pressure in the market as investors freed some fund to take position on the newly-listed stock, he said.
He noted that a section of investors remained active on the market riding on optimism owing to regulatory moves and resumption of economic activities.
The week featured five trading days as usual. Of them, three sessions faced correction while two sessions edged marginally higher.
The two other indices also faced correction. The DSE 30 Index comprising blue chips fell 60.40 points to finish at 1701 and the DSE Shariah Index (DSES) lost 36.75 points to finish at 1,126.
The total turnover, a crucial indicator of the market, stood at Tk 45.73 billion which was Tk 56.35 billion in the week before.
The daily turnover averaged Tk 9.15 billion last week which was Tk 11.27 billion in the previous week, registering a decline of 19 per cent.
Fall of large-cap stocks like Square Pharma, BATBC, Brac Bank, Olympic Industries, City Bank, Renata and Islami Bank played a major role behind the correction of the broad index, commented International Leasing Securities.
The food & allied sector fell more than 6.0 per cent as share price of British American Tobacco slumped 6.16 per cent during the week to close at Tk 1121 each on Thursday.
The heavyweight banking sector slumped 3.50 per cent as large-cap banks like Brac Bank, Islami Bank and City Bank faced correction. Pharmaceuticals and telecom sectors also witnessed 2.90 per cent and 1.70 per cent correction.
The Chittagong Stock Exchange (CSE) also faced sharp correction after 13 weeks with the CSE All Share Price Index - CASPI -plunging 364 points to settle at 14,209 and the Selective Categories Index - CSCX losing 233 points to close at 8,523.
Of the issues traded, 192 declined, 113 advanced and 20 remained unchanged on the CSE.
The port city's bourse traded 77.18 million shares and mutual fund units with turnover value of Tk 1.32 billion during the week.
Walton Hi-Tech Industries share, which made debut on Wednesday, jumped 125 per cent in the first two sessions to close at Tk 567 on Thursday- the highest allowable limit on its offer price of Tk 252.

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