Stocks managed to enter the positive territory in the outgoing week, snapping a seven-week losing streak, as optimistic investors seized opportunities for bargain hunting in sector-specific issues.
The market saw a recovery boosted by the price surge of Beacon Pharma, BAT Bangladesh, Beximco Pharma, Grameenphone, and Olympic Industries, collectively contributing to a 20-point rise in the key index of the Dhaka Stock Exchange (DSE).
Accordingly, the benchmark DSEX index settled nearly 18 points or 0.30 per cent higher at 5,796, after sustaining a 596-point loss in the past seven straight weeks.
Before that, substantial price erosion of large-cap stocks also dragged the DSE's market-cap more than Tk 1 trillion in value after the withdrawal of floor price.
Market operators said stocks eked out gains as bargain hunters opted to bet on lucrative issues in anticipation of a potential turnaround.
Two other DSE indices also ended higher. The DSE 30 Index, comprising blue chips, inched up almost 4 points to finish at 2,014 while the DSE Shariah Index (DSES) advanced 12 points to 1,266.
With many good stocks staying at a lucrative price level after significant price fall in the past few weeks, easing of pre-Eid sale pressure prompted bargain hunters to bet on beaten-down stocks, said a leading stockbroker.
He noted that institutional buying support also added strength to the equity indices even though overall market sentiment still remains subdued.
During the week, the Capital Market Stabilization Fund (CMSF) decided to disburse Tk 1 billion low-cost loans to the stock market intermediaries to provide liquidity support to the moribund stock market.
The CMSF will provide the loans through the Community Bank Bangladesh ranging between Tk 20 million and Tk 50 million at an interest rate of 8.25 per cent.
"Although the amount is insignificant, the news boosted the confidence of the investors," said the stockbroker.
He pointed out that the present chairman of the Bangladesh Securities and Exchange Commission, Prof Shibli Rubayat-Ul-Islam, is set to get an extension for another four years, which also boosted investor confidence.
The present tenure of the BSEC chairman will expire on May 18 this year.
According to EBL Securities, the bargain hunters opted to take positions in the beaten-down stocks, which they perceived as lucrative investment opportunities following prolonged corrections.
However, overall market sentiment has yet to rebound since there is still a lack of significant catalysts to counter the prevailing pessimism pervading across the trading floor, said the stockbroker.
However, trading activity continued its downward trend and the total turnover stood at Tk 21.75 billion this week, down from Tk 24.7 billion in the week before.
Accordingly, the average daily turnover came down to Tk 4.35 billion, which was 12 per cent lower than the previous week's average of Tk 4.94 billion.
Most of the traded issues saw a price surge, as out of 395 issues traded, 188 saw price appreciation, 168 witnessed price correction and 39 remained unchanged on the DSE trading floor.
Investors were mostly active in the pharma sector, accounting for more than 19 per cent of the week's total turnover, followed by textile (17 per cent) and engineering (10 per cent).
Shinepukur Ceramics became the most traded stock, with shares worth Tk 1.15 billion changing hands, followed by Central Pharmaceuticals, Malek Spinning Mills, Alif Industries and Lovelloo Ice-cream.
Makson Spinning Mills was the week's top gainer, posting a 27.7 per cent gain while Emerald Oil Industries was the worst loser, shedding 15.9 per cent.
The Chittagong Stock Exchange also returned to positive territory, with its All Shares Price Index (CASPI) gaining 61 points to 16,614 and the Selective Categories Index (CSCX) rising 43 points to 9,994.
Of the issues traded, 148 declined, 134 advanced and 28 others remained unchanged on the CSE.
The port city bourse traded 17.46 million shares and mutual fund units and the turnover value reached Tk 537 million.
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