Stocks break five-week winning streak

Stocks closed lower last week that ended Thursday, breaking five consecutive weeks of upbeat movement despite offering of some incentives for the capital market in the proposed budget.
It was the first week after announcement of the budget proposed for fiscal 2015-16 fiscal. Finance Minister AMA Muhith on June 4 proposed a set of fiscal measures, including listed companies corporate tax rate cut and increasing the threshold of tax-free dividend income for the fiscal year 2015-16.
The week featured five trading sessions as usual. Of those, the market posted gains in two sessions while three sessions witnessed downturn.
Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 76.29 points or 1.66 per cent to end at 4,515.14 points.
The two other indices also closed lower. The DS30 index, comprising blue chips, moved down by 20.88 points or 1.18 per cent to close at 1,744.31 points. The DSE Shariah Index shed 18.37 points or 1.64 per cent to close at 1,099.22 points.
The port city bourse Chittagong Stock Exchange (CSE) also ended lower, with its Selective Categories Index - CSCX - lost 125 points or 1.76 per cent to close the week at 8,455.20 points.
The total turnover for the week stood at Tk 26.75 billion against Tk 30.15 billion of the previous week despite the last week saw five trading sessions instead of previous week's four.
The daily turnover for the week averaged Tk 5.35 billion, registering a decline of 29 per cent over the previous week's Tk 7.54 billion.
The investors' attention remained mostly focused on power, pharma and engineering - the sectors that accounted for 22 per cent, 18 per cent and 10 per cent respectively of the week's total turnover.
"After a capital market-friendly national budget proposal of FY'16, market failed to react positively as investors kept themselves in the sideline to observe the direction," said LankaBangla Securities, a stock broker, in its weekly analysis.
Average daily turnover declined 29 per cent compared to previous week. "This low level of turnover indicates poor participation by investors," said the stock broker.
IDLC Investments, a merchant bank, said, "As previously anticipated by the investment community, the budget offered array of incentives for the capital market through several fiscal measures".
However, stock market acted as usual as a leading indicator incorporating the measures in price before budget declaration, said the merchant bank.
Later on as the incentives materialised, investors started realising profit from their bets, forcing the market to contract. Investors partially re-allocated their portfolio in large caps, said the merchant bank.
In addition, as fiscal end approached tax incentives seeking investors entered into the market with a focus on safer large caps, the merchant bank added.
"The institutional investors booked profit last week as the market was bullish in the previous five consecutive weeks," said an analyst.
International Leasing Securities said, "Most of the investors stayed on the sideline and adopted 'wait-and-see' approach, as they remained cautious about the capital market outlook while several investors might be taking out their fund to meet up Ramadan expenses".
Among the large-cap sectors, pharmaceuticals registered the highest gain of 3.02 per cent, followed by telecommunication (1.12 per cent) and food and allied gained 0.77 per cent.
Fuel and power saw big loss of 6.37 per cent. Cement, NBFIs and banks also went down by 2.65 per cent, 3.01 per cent and 1.59 per cent respectively.
Losers took a strong lead over the gainers as out of 321 issues traded, 196 declined, 113 advanced and 12 remained unchanged on the DSE trading floor.
The market capitalisation of the DSE went down by 1.07 per cent as it stood Tk 3,225.16 billion on the opening day of the week and declined to Tk 3,190.60 billion on the closing day of the week.
United Airways was the week's top turnover leader with shares worth Tk 1.58 billion changing hands during the week followed by KPCL, Beximco, Summit Power and GP.
ICB Employees Provident Mutual Fund One was the week's best performer, posting a rise of 31.82 per cent while Purabi General Insurance was the week's worst loser, plunging by 22.10 per cent.
    [email protected]