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Weekly market review

Buying spree pushes stocks to six-month high

Average daily turnover jumps 25pc on the prime bourse

FE REPORT | May 27, 2023 00:00:00

Stocks climbed to its highest level in more than six months, extending the winning streak for the third straight week, as the buoyant investors snapped up lucrative shares in anticipation of quick gains.

Of the five trading days this week, three sessions closed higher while two saw moderate corrections.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), ultimately went up by 35.54 points or 0.56 per cent to settle the week at 6,325.73, the highest since November 10 last year. The DSEX added almost 57 points in the past three weeks.

The DS30 Index, which consists of blue-chip companies, also gained 3.22 points to 2,198. The DSES Index, which represents Shariah-based companies, advanced 2.53 points to 1,371.

The buoyancy in the medium- and small-cap stocks such as National Tea Company, Sea Pearl Beach Resorts, Rupali Life Insurance and Emerald Oil Industries led the gains in the prime index.

Market operators said some high-net-worth individuals were in a mood to pour fresh funds into sector-specific stocks as many stocks started rallying and generating short-term returns over the recent weeks, buoyed by earnings growth.

Also, the income tax rebate offered by the government against investments in listed securities attracted some taxpayers as the fiscal year is nearing its end that created a short-term positive sentiment among the investors.

The government is now reportedly planning to cancel the income tax rebate on secondary stock investment for the next fiscal year, which drew opposition from market operators.

But there has been an interpretation that investment in stocks would help avail tax rebate at least for this fiscal if someone invests before the end of June.

As a result, the total turnover stood at Tk 45.86 billion, up from 36.80 billion in the week before. This week also saw a single-day turnover exceed Tk 11 billion on Wednesday.

The average daily turnover also soared 25 per cent to Tk 9.17 billion, compared to the previous week of the prime bourse.

"The buoyant investors chased quick rallies in selective stocks since the recent increase in market participation has bolstered confidence across the trading floor," said EBL Securities, in its weekly market analysis.

The stockbroker noted that investors preferred to rotate their buying appetite for a diversified range of issues while mostly focused on the general and life insurance sectors, as they perceived it as an opportunity to harness quick gains from the rallying market.

Accordingly, investors continued to inject fresh funds into the stocks of life and non-life insurance sectors, dominating the turnover chart, capturing 14 per cent 12.4 per cent respectively of the week's total turnover.

Also, the life insurance sector posted a 7.8 per cent gain while general insurance saw 3.80 per cent during the week.

Among the major sectors, pharmaceuticals booked the highest gain of 0.47 per cent, followed by food, telecom, banking and non-bank financial institutions.

According to International Leasing Securities, the bargain hunters increased their participation in the market thanks to the positive expectation from the upcoming budget that will be announced next week.

Buyers dominated the sellers, as out of 389 issues traded, 118 closed higher, 69 lower and 202 issues remained unchanged on the DSE trading floor during the week.

Bangladesh Shipping Corporation became the weekly turnover leader, with shares worth Tk 2.29 billion changing hands, followed by Intraco Refueling Station, Eastern Housing, Rupali Life Insurance and Navana Pharma.

However, some non-performing companies such as Jute Spinners, Meghna Pet Industries, Imam Button and Emerald Oil Industries dominated the weekly gainers' list.

The Chittagong Stock Exchange (CSE) also ended higher with its All Share Price Index (CASPI) rising 107 points to settle at 18,638 and the Selective Categories Index (CSCX) gaining 57 points to close at 11,151.

The port city's bourse traded 26.35 million shares and mutual fund units with turnover value of Tk 956 million during the week.

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