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Weekly market review

Stocks back in the red as traders weigh earnings

Genex Infosys leads DSE turnover list after deal signing with NBR

FE REPORT | November 12, 2022 00:00:00

The stock market returned to the red this week, eroding prior week gains, as wary investors dumped their holdings of major sector shares amid increasingly gloomy and uncertain economic outlook.

Moreover, the recent dismal earnings reported by most of the companies added to the investors' woes, prompting them to partially liquidate their holdings, market insiders said.

Of the five trading days this week, three sessions suffered losses while two others managed to edge up amid high volatility.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), dropped 56.90 points, or 0.89 per cent to settle the week at 6,353.77, after gaining 32.67 points in the previous week.

Market operators said investors are yet to regain confidence in the market, disheartened by the current macroeconomic adversities and dismal earnings disclosures.

The country's exports and inflow of remittance are on a declining trend while the country's foreign-currency reserves dropped to $34.42 billion during the week, said a merchant banker.

The large-cap companies declared lower than expected dividends as the companies are suffering from the foreign exchange fluctuations and export uncertainty, he said.

The institutional investors mostly followed a 'wait-and-see' approach while individual investors were not confident enough to inject fresh funds, he added.

Even the news that the time for banks to adjust their overexposure to the capital market was extended to the end of December 2023 failed to improve investor sentiment.

The International Monetary Fund's readiness to give a loan of $4.5 billion to Bangladesh to help absorb economic shocks also could not make investors optimistic about the market outlook.

Genex Infosys dominated the week's turnover chart with shares worth Tk 4.65 billion changing hands during the week, followed by Orion Pharma, Bashundhara Paper Mills, Navana Pharma and Eastern Housing.

Genex share also jumped 29 per cent to close at Tk 112.70 on Thursday, the second highest weekly gainer, following the news that the company signed a 10-year business deal with National Board of Revenue last week.

Under the deal, Genex will set up electronic fiscal devices (EFDs) and sales data controllers (SDCs) for the collection of VAT from different types of business entities in Dhaka and Chattogram.

The company is expected to generate approximate gross revenue of Tk 2.12 billion per year upon full rollout.

This week's total turnover clocked Tk 58.22 billion on the prime bourse as against Tk 54.73 billion the previous week. And the daily turnover averaged out at Tk 11.64 billion, up 6.40 per cent from the previous week's average of Tk 10.95 billion.

Most traded issues remained stuck at the 'floor price' due to lack of potential buyers. Of 386 issues traded, 129 declined, 34 advanced and 223 remained unchanged on the DSE floor.

The low-cap IT sector dominated the turnover chart sector-wise, grabbing 17 per cent of the week's total turnover, closely followed by pharma (16.6 per cent) and miscellaneous (12 per cent).

Jittery investors went on a sell-off as they fear deepening challenges of macroeconomic uncertainty riding on inflation worldwide as well as in the local market, said International Leasing Securities.

The panicky investors preferred to hold cash to meet the daily expenses amid rising inflation and future uncertainty, said the stockbroker.

Two other indices of the DSE also closed lower. The DS30 Index, comprising blue-chip companies, lost 17.02 points to close at 2,235 and the DSES Index dropped 16 points to finish at 1,385.

Newly listed Chartered Life Insurance was the week's top gainer, skyrocketing by 60 per cent while Indo-Bangla Pharma was the week's worst loser, plunging 16.67 per cent.

The Chittagong Stock Exchange (CSE) also plunged, with the CSE All Share Price Index (CASPI) losing 182 points to settle at 18,763 and its Selective Categories Index (CSCX) shedding 110 points to close the week at 11,244.

Of the issues traded, 113 declined, 35 advanced and 165 issues remained unchanged on the CSE trading floor.

The port-city bourse traded 22.68 million shares and mutual fund units with turnover value of Tk 1.14 billion.

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