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Weekly Market review

Stocks slump as selloffs intensify

Pharma sector dominates turnover chart

BABUL BARMAN | October 22, 2022 00:00:00

Stocks tumbled in the outgoing week to Thursday, after trading sideways for the last six weeks, as investors raced to dump their holdings, unnerved by ongoing economic uncertainty.

Of the five trading days during the week, the first four sessions suffered losses while the remaining one closed slightly higher in choppy trade.

DSEX, the prime index of the Dhaka Stock Exchange (DSE), slid 101.95 points, or 1.57 per cent, to settle the week at 6,392.30.

Market experts said investors are yet to regain confidence on the trading floor as they remained sceptical about the market outlook amidst the current macroeconomic adversities in the country.

Global economic contraction and recent macroeconomic adversities have weighed on the investor sentiment, said a merchant banker requesting anonymity.

Both the inflow of remittance and export earnings fell in September while inflation is soaring fast, which turned the investors cautious, he said.

Besides, foreign exchange reserves dropped to $35.98 billion as on Wednesday due to increased import payments against slower-than-expected export earnings.

The investors reacted negatively to the regulator's recent restriction on purchasing shares before cheque encashment, coupled with the disappointment regarding the recent earnings declarations of some companies, according to EBL Securities.

The market has already been concentrated on a handful of stocks while some unfavorable factors relevant to the market have worked as a catalyst to generate selling pressure across the bourse, said the stockbroker.

Jittery investors went for sell-offs to exit the market for a while now, as they fear deepening challenges of inflation due to the price hike of daily necessities which is decreasing their real income, according to International Leasing Securities.

Besides, the frequent load-shedding and worldwide economic turmoil created a confidence crisis among investors, said the stockbroker.

This week's total turnover stood at Tk 58.01 billion on the prime bourse as against Tk 48.33 billion in the previous week as this week saw five trading days instead of previous week's four sessions.

The daily turnover averaged out at Tk 11.60 billion, down 4.0 per cent over the previous week's average of Tk 12.08 billion.

The pharmaceuticals sector dominated the turnover chart, grabbing 19 per cent of the week's total turnover, followed by engineering (17 per cent) and miscellaneous (15 per cent).

Two other indices of the DSE also ended lower. The DS30 Index, comprising blue-chip companies, fell 30.41 points to close at 2,277 and the DSES Index shed 12.67 points to finish at 1,407.

Major sectors suffered losses. The cement saw the highest loss of 5.80 per cent, followed by engineering with 2.20 per cent, pharma 1.10 per cent, power 1.0 per cent, non-bank financial institutions 0.90 per cent and banking 0.20 per cent.

However, investors' enthusiasm focused on the small-cap sectors like jute and paper & printing which saw remarkable gains of 5.10 per cent and 3.20 per cent respectively.

Losers took a strong lead over the gainers as out of 386 issues traded, 371 closed lower, 41 higher and 174 issues remained unchanged on the DSE floor.

Beximco was the most-traded stock with shares of Tk 3.86 billion changing hands during the week, closely followed by Eastern Housing (Tk 3.49 billion), Orion Pharma (Tk 3.35 billion), Anwar Galvanizing (Tk 2.16 billion and JMI Syringe & medical Devices (Tk 1.54 billion).

ADN Telecom was the week's top gainer, soaring 25.67 per cent while BDCOM Online was the week's worst loser, losing 30.46 per cent.

The Chittagong Stock Exchange (CSE) also ended lower, with the CSE All Share Price Index (CASPI) losing 310 points to settle at 18,800 and its Selective Categories Index (CSCX) shedding 186 points to close the week at 11,268.

Of the issues traded, 129 declined, 38 advanced and 131 issues remained unchanged on the CSE trading floor.

The port-city bourse traded 25.50 million shares and mutual fund units with turnover value of Tk 1.72 billion.

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