Stocks slip as investors book gains in banks, blue-chips

The Dhaka bourse closed Wednesday's session marginally lower, extending the losing streak for the second session, as many investors booked profits from the recent appreciation.

Insiders said investors booked profits mainly in bank stocks and some blue-chip stocks, which had recently experienced a rally on the Dhaka Stock Exchange (DSE).

The market cap of the banking sector declined 1.73 per cent, followed by financial institutions 1.61 per cent, fuel & power 0.39 per cent and food & allied sector 0.21 per cent on Wednesday.

"After any rally, investors book profits for various reasons. Some investors may think the profit that they now can realise is enough for them while others may think the prices of some stocks may not see further appreciation," said Ali Imam, chief executive officer of EDGE Asset Management.

"The positive sign is that there was no significant deviation in the values of daily transactions," he added.

While speaking on the price erosion experienced by banks, Mr Imam said the rally of some banks was not justified as their operational capacity had deteriorated following scams.

But the appreciation of the fundamentally-strong banks was justified, he said.

The day's top 10 index draggers were banks, according to the DSE.

Of them, Islami Bank alone wiped out 11.2 points of the broad index. The other banks, which were on the list of index draggers, included BRAC Bank, City Bank, and Eastern Bank.

They were also on the chart of top turnover leaders.

Because of investors' significant participation, the banking sector grabbed 23.5 per cent of the market turnover on Wednesday.

The market opened the day's session with a positive note, but optimism did not last long.

A timid recovery stance was observed during the mid-session, but finally the DSE broad index closed with a loss of 0.26 per cent or 14.75 points to 5471 points.

The DSEX slid by 0.90 per cent or 50.23 points in the previous session.

"The bullish momentum of the benchmark index took breather for the second consecutive session as investors preferred realizing short-term gains from the recent rallies," said a market review of the EBL Securities.

The DSE posted a turnover of Tk 8.89 billion on Wednesday, 2.39 per cent down from the previous session.

Pragati Life Insurance was the number one gainer, with a rise of 9.8 per cent, while Fareast Islami Life Insurance was the worst loser, having declined 2.36 per cent on the DSE.

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