FE REPORT
The daily trade turnover on the Dhaka Stock Exchange (DSE) dropped below the Tk 7 billion mark on Tuesday after more than a month, as investors mostly adopted a cautious stance ahead of earnings declarations.
Turnover, a crucial indicator of the market, stood at Tk 6.74 billion on the country's premier bourse, slumping further by 4 per cent from the previous day's mark of Tk 7.06 billion, the lowest since August 12 this year.
Analysts said market sentiment turned cautious as institutional and high-net-worth investors followed a 'go-slow' strategy amid mixed earnings expectations from the June-closing companies.
Most investors chose to remain on the sidelines while some reshuffled their portfolios ahead of earnings declarations, said Md Sajedul Islam, managing director of Shyamol Equity Management.
He said institutional investors are somewhat reluctant to inject fresh funds into equities, while general investors prefer to hold cash instead of making new investments, leading to lower turnover.
Apparently, investor participation also remained subdued as investors await a fresh catalyst to revive the market's momentum.
However, prospects of a policy rate cut amid easing inflation and declining yield rates of government securities are expected to drive market momentum, he said.
The yield rates on 10-year government bonds dropped sharply to 9.89 per cent from 10.26 per cent in Tuesday's bidding, signalling potential easing of interest rates in the money market.
The market started off with upward momentum riding on price appreciation across the majority of scrips, although continued profit-taking kept the indices in check.
The DSEX, the benchmark index of the prime bourse, finally went up by nearly 35 points or 0.63 per cent to 5,509, after gaining 6 points in the previous day.
The DSES index, which represents Shariah-based companies, also gained 8 points to 1,194. The blue-chip DS30 index, a group of 30 prominent companies, however, saw a fractional loss of 0.61 points to 2,134.
EBL Securities said stocks rebounded as opportunistic investors turned back to the market owing to positive expectations, although trading participation remained subdued as cautious investors clung to a wait-and-see approach amid a weakening market trend.
The price hike of selective stocks, including some blue chips such as Islami Bank, Walton, United Commercial Bank, NCC Bank and Crown Cement, helped the market index rise. These five stocks accounted for a 20-point rise in Tuesday's index.
Investors were mostly active in the banking sector, which accounted for 16 per cent of the day's total turnover, followed by pharma (12 per cent) and the engineering sector (11 per cent).
Gainers outnumbered losers, as out of 400 issues traded, 221 saw price appreciation, 103 declined and 76 remained unchanged on the DSE floor.
Most of the large-cap sectors showed positive performance. Engineering booked the highest gain of 1.77 per cent, followed by banking, power, non-bank financial institutions, food and pharmaceuticals.
Crown Cement was the top gainer, rising 9.86 per cent, while People's Leasing was the worst loser, shedding 8.33 per cent.
Lovello Ice-cream became the most-traded stock, with shares worth Tk 186 million changing hands, closely followed by Summit Alliance Port, Robi Axiata, Khan Brothers PP Woven Bag Industries and Sonali Papers.
The Chittagong Stock Exchange also edged higher, with its All Shares Price Index (CASPI) rising 67 points to 15,434, while the Selective Categories Index (CSCX) gained 45 points to 9,478.
The port city bourse traded 7.49 million shares and mutual fund units with a turnover value of Tk 118 million.
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