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DSEX dips below 5,800-mark as banking shares plunge

Trading on bourses close today, tomorrow

FE Report | May 01, 2018 00:00:00

Stocks witnessed sharp fall Monday with the key index of the Dhaka Stock Exchange (DSE) dipping below 5,800-mark as investors went on selling spree, especially banking issues.

Market operators said the investors went on selling binge as quarterly earnings of some large-cap companies failed to meet investors' expectations. They said the month-end sale pressure also contributed to the fall.

Some 78 more companies disclosed their quarterly earnings on Monday. Of them, 44 companies' earnings declined for the January-March quarter compared to the same quarter a year ago.

"Price fall of some large-cap stocks like Grameenphone, Square Pharmaceuticals, ACI and banking sectors contributed to the market fall," Khairul Bashar Abu Taher Mohammed, secretary general of Bangladesh Merchant Bankers Association, told the FE.

Mr. Khairul, also chief executive officer of MTB Capital, noted that poor earnings and dividend declarations coupled with two-day holiday fueled the market fall.

However, he expressed the optimism that the market will rebound as the major bourse formally submitted the revised proposal of Chinese consortium for its strategic partner, to the securities regulator after holding extraordinary general meeting on Monday.

The trading and official activities of the bourses will remain closed today (Tuesday) and tomorrow (Wednesday) on the occasion of May Day and Shab-e-Barat.

The market opened on a negative note and the downward trend continued till end of the session amid no sign of reversal, finally the DSEX plunged more than 74 points while the CSE All Share Price Index fell 230 points at closing.

DSEX, the key index of the DSE, settled at 5,739, losing 74.56 points or 1.28 per cent over the previous session.

"Most of the investors opted for liquidating their position by observing the quarterly earnings and year-end dividend declarations," commented International Leasing Securities, in its regular market analysis.

The stockbroker noted that some of the large-cap issues failed to meet investors' expectation in the latest financial disclosure, which has contributed to the plunge in the indices.

Cement, bank, financial institution, pharmaceutical, food, fuel & power, engineering and telecom sectors witnessed highest selling pressure, the stockbroker said.

The two other indices also saw sharp fall. The DS30 index, comprising blue chips, fell by 28 points or 1.30 per cent to finish at 2,143. The DSE Shariah Index (DSES) lost 18.70 points or 1.39 per cent to close at 1,325.

Turnover, another important indicator of the market, increased slightly and the total turnover on the DSE stood at Tk 5.92 billion, which was 7.83 per cent higher than the previous day's Tk 5.49 billion.

According to AT Capital Partners, an asset management company, the market ended with sharp correction as investors' profit taking mentality came into play amidst fall in heavy weight banking sectors.

The banking sector posted the highest loss of 2.05 per cent, followed by pharmaceuticals with 1.37 per cent, financial institutions 1.21 per cent.

The losers took a strong lead over the gainers as out of 337 issues traded, 227 closed lower, 73 ended higher and 37 issues remained unchanged on the DSE trading floor.

Port city's bourse CSE also ended lower with the CSE All Share Price Index - CASPI - shedding 233 points to settle at 17,693 and Selective Categories Index - CSCX - losing 138 points to finish at 10,697 points.

Here too, the losers beat the gainers as 165 issues closed lower, 49 ended higher and 14 remained unchanged.

The port city bourse traded 9.61 million shares and mutual fund units worth more than Tk 348 million in turnover.

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