Stocks extend gaining streak amid optimism

Babul Barman | Published: May 16, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

Stocks extended their gaining streak for the second straight week that ended Thursday with significant improvement in turnover as investors were on buying spree amid optimism.
"The buoyancy was spurred mainly by the government decision of interest rate cut on savings instruments coupled with budgetary expectations and lucrative pricing level in recent times," analysts said.
The week witnessed five trading sessions as usual. Of those, the market saw impressive gains in three trading sessions while two sessions saw marginal correction.
Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), jumped 192.57 points or 4.67 per cent to close the week at 4,314.89 points.
The two other indices also ended higher. The DS30 index, comprising blue chips, gained 65.51 points or 4.20 per cent to close at 1,623.71 points. The DSE Shariah Index rose 36.07 points or 3.57 per cent to close at 1,046.48 points.
The port city bourse Chittagong Stock Exchange (CSE) also ended higher, with its Selective Categories Index - CSCX - rose 416 points or 5.38 per cent to close the week at 8,133 points.
Turnover, the most important indicator of the market, also shot up substantially last week on the DSE. The total turnover for the week stood at Tk 29.79 billion against Tk 14.42 billion of the previous week.
The daily turnover for the week averaged Tk 6.00 billion, registering an increase of 65.29 per cent over the previous week's average worth Tk 3.60 billion.
"This higher turnover can be attributed to higher participation as government savings certificates' yield rate was cut down by 2.0 per cent," said BRAC EPL, a stock broker, in an analysis.
The investors' attention remained mostly focused on power, engineering and pharma - the sectors that accounted for 23 per cent, 16 per cent and 12 per cent respectively of the week's total turnover.
IDLC Investments, a merchant bank, in its weekly analysis said, the market extended the gaining streak last week, due from acute undervaluation in multiple stocks.
"As most of the listed stocks went to nadir with index touching one of the 'historical' low points, upbeat spike was imminent," said the merchant bank.
The gain was also fueled by rate cut in savings certificates and expectations of further capital market-friendly measures in upcoming budget, said the merchant bank.
The humming of the growth engine of economy, capital market attracted substantial funds from the sideline. Resultantly, turnover rapidly rose during the week, ultimately averaging almost Tk 6.0 billion, said the merchant bank.
LankaBangla Securities, a stock broker, said, "Market passed a pleasant week as investors went for buying stocks".
Moreover, 200 basis points decrease in five years savings certificate coupled with imminent budget expectations made investors buoyant about stocks, said the stock broker.
Political front also remained calm in last week. However, small caps were in the buying radar of investors last week.
All large-cap sectors gained except food and allied, which lost 2.54 per cent. Power registered the highest gain of 5.96 per cent over the week. Banks and NBFIs yield strong performance in the week, gaining 4.70 per cent and 4.08 per cent respectively.
Pharmaceuticals advanced by 3.03 per cent. Cement gained 1.20 per cent over the week and telecommunication closed 0.26 per cent higher.
The gainers took a strong lead over the losers as out of 322 issues traded, 267 advanced, 50 declined and five remained unchanged on the DSE trading floor.
Five listed companies -- Orion Pharma, Purabi General Insurance, Janata Insurance, Ambee Pharma and Islami Insurance recommended dividend last week while one company -- Information Services Network failed to recommend any dividend.
The market capitalisation of the DSE went up by 2.79 per cent as it was Tk 3,013.62 billion on the opening day of the week and it stood at Tk 3,097.82 billion on closing day of the week.
United Power Generation and Distribution Company continued to dominate the week's top turnover chart with shares worth Tk 2.29 billion changing hands during the week followed by ACI Formulations, Western Marine Shipyard, KPCL and MJL BD.
Meghna Cement was the week's best performer, posting a rise of 43 per cent while Renata was the week's worst loser, plunging by 16 per cent following its price adjustment after record date.
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