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Weekly market review

Stocks lose more ground amid sour sentiment

Average daily turnover plunges 48pc on prime bourse

BABUL BARMAN | November 19, 2022 12:00:00

Stocks witnessed yet another downbeat week, with the benchmark index plunging deeper into the red as investors, reeling from market turbulence, raced to sell off their holdings to avoid further erosion of their portfolios.

The growing economic worries, dismal earnings disclosures of most listed firms coupled with rumors of liquidity crunch in banks continue to weigh on investor confidence, market insiders said.

Of the five trading days this week, the first three sessions suffered losses while two others managed to edge up after the securities regulator relaxed the 'floor price' limit for transactions on the block market.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) plunged 87.77 points or 1.38 per cent to settle the week at 6,266. The DSEX shed almost 145 points in the past two consecutive weeks.

The DSE market-cap also dropped 0.58 per cent or Tk 45 billion to Tk 7,670 billion on Thursday, the last session of the week.

Market insiders said looming economic uncertainties and the country's macroeconomic cues hit the investor sentiment hard.

According to Bangladesh Bank data, exports and remittance are on a declining trend while the country's foreign-exchange reserves stood at $34.30 billion on Thursday.

The market has been struggling for the past few months since the Russia-Ukraine war began which was exacerbated by fears over a possible economic depression, said a merchant banker.

Investors were active on a handful of stocks in the last few weeks while most of the stocks remained stuck at floor price due to lack of potential buyers, he said.

The institutional investors mostly followed the 'wait-and-see' approach while small ones were not confident enough to inject fresh funds, taking the market turnover 48 per cent down this week.

Stocks logged extreme hurdles from the start of this week as dismal corporate earnings from a majority of companies prompted investors to sell-off to protect their funds from the ailing market, said EBL Securities in its weekly analysis.

However, the market recovered some losses in the last two days as investors reacted positively to the regulator's decision to withdraw the floor price from the block market, which increased liquidation opportunities for large investors, said the stockbroker.

According to International Securities, jittery investors kept on their selloffs to exit the market for a while as they fear deepening challenges in the coming months due to the macroeconomic worries.

The quarterly earnings declarations also failed to meet the investors' expectations while some investors were stuck with heavy losses in their portfolios and cannot get out of it due to the floor price restrictions, said the stockbroker.

More than 100 listed companies disclosed their quarterly earnings during the week and most of them reported low profit growth while some others incurred losses.

This week's total turnover also tumbled to Tk 30.20 billion on the prime bourse as against Tk 58.22 billion the previous week. And the daily turnover averaged out at Tk 6.04 billion, down 48 per cent from the previous week's average of Tk 11.64 billion.

Of 385 issues traded, 76 declined, 44 advanced and 265 remained unchanged on the DSE floor.

The small-cap IT sector dominated the turnover chart, grabbing 21 per cent riding on sector leader Genex Infosys, closely followed by pharma sector (19 per cent) and miscellaneous (10 per cent).

Genex Infosys kept its dominance in the week's turnover chart with shares worth Tk 3.32 billion changing hands, followed by Orion Pharma (Tk 2.36 billion), Bashundhara Paper Mills (Tk 1.53 billion), Navana Pharma (Tk 1.31 billion) and Eastern Housing (Tk 1.06 billion).

Chartered Life Insurance was the top gainer, soaring 59.77 per cent while Anwar Galvanizing was the worst loser, losing 45.67 per cent due to its price adjustment after record date.

Amid the low participation of investors, the Bangladesh Securities and Exchange Commission (BSEC) has relaxed trading in the block market allowing shares to be transacted up to 10 per cent lower than the floor price.

Two other indices of the DSE also closed lower. The DS30 Index, comprising blue-chip companies, lost 36.06 points to close at 2,199 and the DSES Index shed 20.85 points to finish at 1,364.

The Chittagong Stock Exchange (CSE) also plunged, with the CSE All Share Price Index (CASPI) losing 270 points to settle at 18,492 and its Selective Categories Index (CSCX) shedding 163 points to close the week at 11,081.

Of the issues traded, 74 declined, 32 advanced and 172 issues remained unchanged on the CSE trading floor.

The port-city bourse traded 11.76 million shares and mutual fund units with turnover value of Tk 564 million.

Global Islami Bank, a new issue, made its debut on Wednesday but failed to draw investors, resulting in its share falling below the face value to close at Tk 9.0, shedding 10 per cent.

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