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Stocks break four-day rally

Banking, financial institution, mutual fund sectors suffer most

FE REPORT | August 19, 2021 00:00:00

Stocks witnessed a modest correction on Wednesday, snapping a four-day record breaking rally, as shaky investors preferred to book profit on quick-gaining issues.

After hitting a new high in the previous day, the market opened on high note and the key index crossed the 6,800-mark, but failed to sustain that level amid profit booking sell-offs on financial stocks.

At the end of the session, DSEX, the key index of the Dhaka Stock Exchange (DSE), went down by 15.31 points or 0.22 per cent to settle at 6,771, after gaining 170 points in the past four consecutive sessions.

The DSE Shariah Index (DSES) also shed 2.77 points to close at 1,466. However, the DS30 index, a group of 30 prominent companies, advanced 4.65 points to settle at 2,426.

Market analysts said the risk-averse investors booked some profit on financial stocks which saw significant gain in the past few trading days.

As the market was on a rising trend in the last few days, many stock prices were up by at least 10 per cent to 15 per cent, so investors are taking in their profits now, they said.

"Profit booking was expected as all three indices and market-cap of the DSE hitting new highs recently," said an analyst at a leading brokerage firm.

He noted that it is good for the market when investors take profits because then they get the confidence to invest more.

Turnover, a crucial indicator of the market, stood at Tk 24.65 billion on the country's premier bourse, which was 7.78 per cent lower than the previous day's turnover of Tk 26.73 billion.

The daily average turnover maintained above Tk 24 billion in the last 11 consecutive sessions on the DSE.

Top negative index contributors were Robi Axiata, Investment Corporation of Bangladesh, Dutch-Bangla Bank, Al-Arafah Islami Bank and Islami Bank Bangladesh as they collectively brought the DSEX down by 14 points, according to data from amarstock.com, a market data analyst.

The optimistic investors were remained active in the market amid the stock market regulator's extended credit facilities, said a top broker.

The Bangladesh Securities and Exchange Commission (BSEC) last week revised the limit of margin loan facilities based on the DSE key index - at a maximum rate of 1:0.80 when the DSEX is below 8,000.

The shaky investors' sell pressure in banking, financial institution and mutual fund sector stocks pushed down the key index, commented International Leasing Securities.

However, some investors remained active on cement, general insurance, miscellaneous and power sector stocks, said the stockbroker.

The financial institution sector saw the highest loss of 1.70 per cent, closely followed by banking with 1.60 per cent, mutual fund 1.20 per cent, telecom 0.40 per cent and pharma 0.30 per cent.

On the other hand, cement, general insurance power sectors gained 1.40 per cent, 1.30 per cent and 1.0 per cent respectively.

Losers took a strong lead over the gainers, as out of 374 issues traded, 216 declined, 138 advanced and 20 remained unchanged on the DSE trading floor.

Beximco - the flagship company of Beximco Group-topped the turnover list with shares worth Tk 1.30 billion changing hands, followed by IFIC Bank (Tk 750 million), LankaBangla Finance (Tk 628 million), Orion Pharma (Tk 529 million) and LafargeHolcim Bangladesh (Tk 489 million).

Shahjibazar Power Company was the best performer, posting a gain of 9.79 per cent while Jute Spinners was the worst loser, losing 6.12 per cent.

The Chittagong Stock Exchange also ended marginally lower with its All Shares Price Index (CASPI)-shedding 21 points to finish at 19,746 while the Selective Categories Index - CSCX losing 10 points to close at 11,840.

Of the issues traded, 172 declined, 125 advanced and 31 issues remained unchanged on the CSE.

The port city bourse traded 44.23 million shares and mutual fund units with turnover value of Tk 924 million.

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