Weekly analysis: Stocks cheer nat’l election results

Average daily turnover climbs 75pc on DSE

Babul Barman | Published: January 05, 2019 10:49:19 | Updated: January 08, 2019 10:17:29

File Photo (DSE)

The prime index of the Dhaka Stock Exchange (DSE) climbed 3.80 per cent this week in a sign of positive reaction from the investors to the outcome of the national elections held on the first day of the week.

Market analysts said the investors took fresh position on stocks amid optimism that market would be better in the coming days riding on political stability and more sound business activities.

Investors' enthusiasm sustained throughout the week as local and foreign investors remained active following peaceful election held on December 30, commented a leading broker.

"The peaceful election has boosted the confidence level of investors and the market is starting to reflect their sentiment," said the broker.

According to a merchant banker, the high growth of operating profits of most listed banks coupled with securities regulator's positive move on margin rules also prompted investors to inject fresh investment into the market.

The investors also saw positive changes after the landslide victory of the Awami League-led grand alliance in the 11th parliamentary elections, he said.

This week featured only three trading sessions instead of regular five days, as the market remained closed on Sunday and Monday on account of national elections and bank holiday.

The market continued its rally in all three trading sessions on the back of the past two weeks' gaining streaks.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), jumped by 204.83 points or 3.80 per cent to settle the week at 5,590.

This bullish trend was triggered by fresh funds injected into the market at the beginning of the year, growing confidence among the investors and positive impact of the national election, commented City Bank Capital Resources in its weekly market analysis.

The two other indices also edged higher. The DS30 index, comprising blue chips, gained 61.21 points to finish at 1,942 and the DSE Shariah Index rose 38.58 points to close at 1,271.

Khairul Basher Abu Taher Mohammad, chief executive officer of MTB Capital, said the investors showed their buying appetite amid high expectations, as the political tensions eased after the national election.

Mr Basher, also secretary general of the Bangladesh Merchant Bankers Association (BMBA), said that the relaxation of margin rules for another two years also pushed the market higher.

The investors reacted positively to such developments and started to increase their participation, he noted.

The total turnover also shot up to Tk 21.51 billion this week, up from Tk 16.37 billion in the previous week, although the week saw only three trading days.

The daily turnover averaged out at Tk 7.17 billion, up 75 per cent over the previous week's average of Tk 4.09 billion.

The market capitalisation of the DSE also rose 2.72 per cent to Tk 3,978 billion, from Tk 3,873 billion in the week before.

The power sector posted the highest gain of 6.18 per cent, followed by financial institutions (5.84 per cent), engineering (5.80 per cent), banking (4.25 per cent), pharmaceuticals (1.30 per cent) and food (1.25 per cent).

Of the 347 issues traded, 312 closed higher, 29 ended lower and six issues remained unchanged on the DSE trading floor.

BBS Cables topped the week's turnover chart, with 8.53 million shares worth Tk 888 million changing hands.

The other turnover leaders were Beximco (Tk 772 million), Paramount Textile (Tk 766 million), Saiham Cotton Mills (Tk 629 million), and IFAD Autos (Tk 566 million).

United Insurance was the week's best performer, posting a gain of 23.51 per cent while Pragati Life Insurance was the biggest loser, shedding 5.32 per cent.

The port city bourse, Chittagong Stock Exchange (CSE), also maintained the upbeat note, with its CSE All Share Price Index -- CASPI -- settling 717 points or 4.35 per cent higher at 17,166 and the Selective Categories Index -- CSCX -- rising 420 points or 4.22 per cent to finish at 10,367.


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