Stocks drop for 2nd week

Babul Barman

Stocks went down for the second consecutive week with turnover remaining sluggish, as cautious investors were in a watchful mood amid profit-taking attempts.

As usual the week, ending Thursday, featured five trading sessions. Among those, two closed negative, while three closed positive.

Week-on-week, DSEX, the benchmark index of Dhaka Stock Exchange (DSE), went down marginally by 11.74 points or 0.26 per cent to close the week at 4,555.12 points.

The other two indices also closed lower. DS30, comprising blue chips, lost 5.92 points or 0.35 per cent to close at 1,666.01. DSE Shariah Index went down by 5.28 points or 0.52 per cent to close at 1,012.92.

Chittagong Stock Exchange (CSE) also edged marginally down with its Selective Categories Index - CSCX - losing 7.64 points or 0.08 per cent to close the week at 8,763.40.

The total turnover value on DSE stood at Tk 19.13 billion, which was 12.97 per cent higher compared to the previous week's Tk 16.93 billion. The turnover increased, as there was one trading session less in the previous week.

The average daily turnover in the week came down to Tk 3.82 billion, registering a 10 per cent decline over the previous week's average of Tk 4.23 billion.

"The market has observed selling pressure throughout the week. Average daily turnover was also 10 per cent lower compared to the previous week," commented LankaBangla Securities, in its weekly market analysis.

"This continuous selling is probably the result of banks' reducing exposure, as they are trying to comply with the capital market exposure limit, set by Bangladesh Bank."

"Generally, it can be said that the first quarter earnings, posted by most of the listed companies, except banks, were not encouraging," said the stock broker.

Banking stocks showed improved performance in terms of profitability. But investors are probably thinking that this improved performance will not sustain.

"Investors can expect better earnings performance by listed entities in second quarter of 2014, as the economy seems to have stabilized and has come out of the political shock towards the end of 2013," it added.

IDLC Investments commented: "Dynamics of up and down neutralized this week's market sentiment. A number of quarterly earning announcements, mostly in depressed tone, affected the market sentiment in frequent intervals."

Accordingly, a cautious stance prevailed among the investors, keeping them in a watchful mood. Meanwhile, massive down subsequently turned into upbeat, since lucrative prices lured some witty investors, the merchant bank said.

"As panic did not neutralize fully, general investors were maintaining side-line strategies."

Following the downbeat sentiment of last week, this week started with a toll of 62 points, putting down the prime index at 4,500 level. Since, panic of further fall re-bounded amid investors, most of them turned to selling mood, it opined.

International Leasing Securities commented: "The investors' attempt to generate short-term profit pushed the stock market into red zone."

The gainers took a modest lead over the losers during the week on DSE floor. Out of the 301 issues traded, 163 advanced, 114 declined and 24 remained unchanged.

Sectoral performance was mixed in the week. Among the major sectors, telecommunications gained the most with 1.71 per cent rise, followed by NBFIs, which closed 0.71 per cent higher.

Pharmaceutical was the biggest loser, going down by 2.84 per cent. Food & allied lost 1.41 per cent, banks 1.31 per cent, and fuel & power lost 1.21 per cent.

A total of eight listed companies - Salvo Chemicals, Information Services Network, Meghna Petroleum, BD Thai, Legacy Footwear, Rupali Bank, Mercantile Insurance and Golden Son - made corporate declarations during the week.

The market capitalisation of DSE went down slightly by 0.34 per cent. It was Tk 2,953.07 billion on the opening day of the week, and stood at Tk 2,942.92 billion on the closing session.

GrameenPhone (GP) dominated the week's top turnover chart with shares worth Tk 1.54 billion changing hands, followed by Meghna Petroleum, Heidelberg Cement, Matin Spinning and Olympic Industries.

Salvo Chemicals was the week's top gainer, posting a rise of 20.74 per cent, following its corporate declaration of 10 per cent stock dividend.

Information Services Network was the week's worst loser, slumping by 27.78 per cent, following its zero dividend declaration.