Stocks continued to limp through the first week of the New Year, extending the losing streak for the third straight week, as investors kept their investment plans on hold ahead of the national election scheduled for tomorrow.
According to analysts, political uncertainties and the existing 'floor price' system have deterred investors from putting fresh money into stocks, while uncertain economic outlook also dampened the investor sentiment.
The ongoing depressed market situation, liquidity crunch and lack of institutional participation altogether eroded investor confidence, said a leading stockbroker.
To make things better, Bangladesh Securities and Exchange Commission (BSEC) assured the stock market intermediaries this week that the floor price restriction will be gradually lifted after the national election.
The regulator held meetings with market intermediaries and sought all-out support from stock brokers and merchant banks to lay out a comprehensive plan for making the capital market vibrant again after the removal of the floor price.
A BSEC official said the initial plan involves lifting floor price restrictions on stocks that have a relatively lower impact on the index.
This week, the market remained closed on Sunday due to the bank holiday. And of the four trading days, the first two sessions ended lower while the last two days managed to edge higher although participation of investors remained low.
The DSEX, the benchmark index of Dhaka Stock Exchange (DSE), finally settled 2.33 points or 0.04 per cent lower at 6,244.17. The DSEX shed more than 22 points in the past three straight weeks.
Top negative index contributors were Olympic Accessories, Aftab Automobiles, Heidelberg Cement, Pacific Denims and Khulna Printing as they jointly accounted for almost 7-point fall in the key index.
The DSES index, which represents Shariah-based companies, also fell 1.32 points to 1,363. However, the DS30 Index, which consists of blue-chip companies, managed to see a fractional gain of 0.43 points to 2,094.
According to EBL Securities, investors are being observant and staying on the sidelines as they are taking a wait-and-see approach ahead of the upcoming national election, although some optimistic investors opted to bag some oversold stocks with positive expectations.
Investors preferred to secure short-term gain opportunities rather than long-term investments owing to the wavering market sentiment across the trading floor, leading the market to experience dominant sell pressure, said the stockbroker.
The participation of investors was also low. As a result, the total turnover of the week stood at Tk 15.97 billion, down from Tk 20.16 billion in the week before.
Accordingly, the average daily turnover stood at Tk 3.99 billion in the outgoing week, which was almost 21 per cent lower than the previous week's average of Tk 5.04 billion.
Majority of the traded shares saw price erosion, as out of 372 issues traded, 99 closed lower, 72 higher and 201 remained unchanged on the DSE trading floor.
Most sectors saw price correction, with the mutual fund sector saw the highest correction of 1.9 per cent, followed by paper & printing, IT, life insurance while general insurance saw the highest price appreciation with 2.3 per cent gain, followed by lower by jute, travel and food sectors.
The general insurance sector dominated the weekly turnover chart, accounting for 17 per cent of the week's total turnover, followed by engineering and mutual funds.
Small-cap stocks kept dominance on the turnover list with Sea Pearl Beach Resorts becoming the most-traded stocks, with shares worth Tk 714 million changing hands, followed by BD Thai Aluminum, Olympic Accessories, Orion Infusion and Khulna Printing & Packaging.
Rupali Life Insurance was the week's top gainer, soaring 17.28 per cent while ICB Sonali Bank AMCL MF was the worst loser, shedding 14.89 per cent.
The Chittagong Stock Exchange (CSE) also ended lower with its All Share Price Index (CASPI) losing 12 points to settle at 18,508 and the Selective Categories Index (CSCX) shedding 8 points to close at 11,068.
The CSE traded 11.32 million shares and mutual fund units with a turnover volume of Tk 311 million.
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