Babul Barman
The stock market suffered a heavy sell-off mainly on heavyweights in the past week, extending the losing spell for the third week in a row, as worried investors were on selling frenzy.
Analysts said the market witnessed a major setback last week as institutional investors were cautious amid fear of sale-pressure from banks to bring down the capital market exposure to the permissible level.
The recent targeted killings also took a big toll on investors' sentiment.
However, Bangladesh Bank (BB) relaxed the rules related to banks' investment in stocks in a move to boost the moribund capital market Wednesday, but it could not serve as a catalyst to boost the market on Thursday amid lack of clear direction.
The investors were waiting for the details of Bangladesh Bank's policy support regarding banks' capital market exposure.
"After issuance of circular regarding adjustment of the banks' over exposure, investors will be able to realise the benefits of the central bank's policy supports," said an analyst at a leading brokerage firm.
Amid weak sentiment, the market suffered losses in all the five trading sessions last week.
Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), came down below the 4,200-mark and settled at nearly 12-month low to 4,195.70, tumbling by 144.64 points or 3.33 per cent. It was the lowest level of DSEX since May 7, 2015.
The two other indices also saw sharp cuts. The DS30 index, comprising blue chips, plunged 53.81 points or 3.23 per cent to finish at 1,612.34. The DSE Shariah Index plummeted 32.79 points or 3.10 per cent to close at 1,025.15.
The port city bourse Chittagong Stock Exchange (CSE) also saw a sharp fall with its Selective Categories Index, CSCX, falling 280.35 points or 3.45 per cent to finish at 7,850.19.
Activities were depressed too as the total turnover for the week came down to Tk 17.57 billion, which was Tk 19.33 billion in the week before.
The daily turnover averaged Tk 3.51 billion, registering a decline of 9.09 per cent over the previous week's average of Tk 3.87 billion.
Overall activities remained confined to fuel and power, pharma and engineering sectors, where they captured 27 per cent, 17 per cent and 14 per cent respectively of the week's total turnover.
LankaBangla Securities, a stockbroker, said, "Despite positive indication in the macroeconomic indicators of the country and comparatively stable political state of affairs compared to previous April, the market could not rebound due to the lack of investors' confidence".
The stockbroker noted that the benchmark DSEX broke major support zone around 4,200 and reached at nearly 12-month low to next support zone to 4,195.
Among the market cap leaders Investment Corporation of Bangladesh (ICB), Berger Paints, Lafarge Surma Cement declined by 10.1 per cent, 8.3 per cent and -7.6 per cent last week respectively.
IDLC Investments, a merchant bank, said, "Market passed a difficult week, as prices of most of the issues fell. Amid slowed activities, sell pressure pushed the market into the negativity territory. The intensity of correction pushed DSEX to nearly 12-month low".
"The capital market witnessed a major setback last week amid panic-driven selling frenzy," said International Leasing Securities, a stockbroker, in an analysis.
The stockbroker noted that steady bearish vibe in the market kept the investors in gloomy mood, triggering the sell-pressure.
Despite relaxing rules by the central bank related to banks' investment in stocks in a move to boost the ailing market, the market did not respond positively, said the stockbroker.
Sheltech Brokerage said mainly large-cap took the beating as BB denied extending the exposure adjustment timeframe, though it said to provide policy support so that banks' will not need to adjust by selling any shares.
The brokerage firm noted that concentration was seen in selective stocks amid dividend and earnings announcement speculations.
The losers took a strong lead over the gainers as out of 325 issues traded, 253 closed lower, 56 higher and 16 remained unchanged on the DSE trading floor during the week.
A total of 30 listed companies recommended dividends last week.
The market capitalisation of the DSE also dropped 2.2.76 per cent last week as it was Tk 3,085.07 billion on the opening day of the week and it came down to Tk 2,999.85 billion on closing day of the week.
Bangladesh Steel Re-rolling Mills dominated the week's turnover chart on DSE with 6.35 million shares worth Tk 903 million changing hands, followed by United Power Tk 802 million, MJL BD Tk 773 million, Jamuna Oil Tk 521 million and Keya Cosmetics Tk 472 million.
Eastern Lubricants was the week's best performer, posting a gain of 18.08 per cent, while newly listed Bangladesh National Insurance Company was the week's worst loser, slumping by 29.51 per cent.
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Source: The Financial Express