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Weekly market review

Stocks snap three-week losing streak -

Average daily turnover jumps 41pc on prime bourse

FE REPORT | April 08, 2023 00:00:00

Snapping a three-week losing streak, the benchmark index of the Dhaka bourse posted a modest gain in the outgoing week, as bargain hunters showed interest in some oversold stocks in anticipation of quick gains.

The market managed to close in the green as the investors deemed some selective issues lucrative following their recent erosions, market operators said.

Of the five trading days of the week, three sessions posted gains while two others saw moderate corrections.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), settled the week at 6,214.20, with a rise of 7.41 points, after shedding 54 points in the past three weeks straight.

The upward shift in the index is mainly driven by the price surge in selective small-cap sector stocks, particularly jute, services & real estate and tannery stocks.

Eight of the top ten weekly gainers are small-cap stocks such as Gemini Sea Food, Apex Foods, BD Autocars, Aamra Networks, Rahim Textile, Sonali Aansh, Legacy Footwear and BD Lamps.

"The stock market tried to bounce back during the week riding on the regulatory measures such as increasing the investment limit of mutual funds to 80 per cent from 60 per cent in the equity market," said International Leasing Securities.

The Bangladesh Securities and Exchange Commission last week took the decision to raise the investment limit for mutual funds in a bid to increase institutional investors' participation in the market.

Mutual funds pool money from investors to channel it into securities such as stocks, bonds, and other assets. Depending on the profits earned, investors are then paid their share as dividends.

The participation in the market also showed upward momentum as total turnover in the week rose to Tk 28.93 billion, up from Tk 16.39 billion in the previous week which saw four trading days.

The average daily turnover stood at Tk 5.78 billion, a 41 per cent increase from the previous week's average turnover of Tk 4.10 billion.

Investors were mostly active in the IT sector, capturing 20 per cent of the week's total turnover, followed by food sector (13 per cent) and pharmaceuticals (8.0 per cent).

According to EBL Securities, stocks rebounded from its losing streak as investors have found some selective issues lucrative with quick gain potential after recent corrections.

However, due to prevailing macroeconomic uncertainties, investors are still hesitant to take long-term positions in equities and prefer to book profits, which led the market to witness volatility throughout the week, said the stockbroker.

The small-cap jute sector soared almost 10 per cent, followed by services & real estate (1.70 per cent), paper (1.30 per cent), banking (0.50 per cent).

On the other hand, the food & allied sector suffered a loss of 3.13 per cent followed by pharma (0.26 per cent).

Buyers had been concentrated on selective issues while the majority of stocks remained stuck at the 'floor price' level. Of 378 issues traded, 244 remained unchanged, 76 advanced and 58 declined on the DSE floor.

Genex Infosys became the weekly turnover leader, with shares of Tk 1.78 billion changing hands, closely followed by Eastern Housing (Tk 1.77 billion), Aamra Networks (Tk 1.49 billion), Bangladesh Shipping Corporation (Tk 1.34 billion) and Unique Hotel & Resorts (Tk 1.10 billion).

Gemini Sea Food was the week's top gainer, posting a 35.33 per cent rise while Unilever Consumer Care was the top loser, shedding 36 per cent following its price adjustment after record date.

However, two other indices of the DSE closed in the red. The DS30 Index, which consists of blue-chip companies, shed 10.55 points to 2,198 and the DSES Index, which represents Shariah-based companies, fell 1.44 points to 1,348.

The Chittagong Stock Exchange (CSE) ended slightly higher with its All Share Price Index (CASPI) rising 16 points to settle at 18,304 and the Selective Categories Index (CSCX) gaining 11 points to 10,973.

The port city's bourse traded 9.37 million shares and mutual fund units with turnover value of Tk 396 million during the week.

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