Weekly analysis: Stocks climb on stimulus measures

Stocks edged higher in the outgoing week, snapping a two-week losing streak, as the government's market-supportive measures brought a ray of hope to general investors.

Market analysts said the central bank's recent circular widening the banks' scope to invest in the stock market made the investors optimistic.

According to the circular of the Bangladesh Bank (BB), banks' investments in non-listed companies would not be treated as capital market exposure, a move that can give banks a plenty of room for fresh investments in the stock market.

Buoyed by the news, investors showed their buying appetite for the banking sector's shares, said a leading broker.

Besides, the securities regulator's decision that sponsor-directors of a listed company will not be allowed to sell shares if they fail to hold 30 per cent shares jointly made the investors happy, he said.

Also, the Investment Corporation of Bangladesh (ICB) has received Tk 7.60 billion from the central bank under the capital market refinancing scheme, the tenure of which was extended until December 31, 2022.

The stockbroker noted that investors went bargain hunting anticipating that the market would turn around soon following the government's moves.

The outgoing week saw five trading days as usual, with Thursday as the last trading day. Three of the five sessions ended negative while two sessions closed higher.

Week on week, DSEX, the prime index of the DSE, went up by 19.81 points or 0.37 per cent to settle at 5,250.

The DS30 index, comprising blue chips, also advanced 14.61 points to finish at 1,832. However, the DSE Shariah Index fell 4.66 points to close at 1,192.

According to the International Leasing Securities, the optimistic investors showed their buying appetite for some large-cap stocks, depending on quarterly earnings.

The total turnover on the prime bourse stood at Tk 17.93 billion in the outgoing week as against Tk 14.61 billion in the week before.

The daily turnover averaged out at Tk 3.51 billion, registering an increase of nearly 23 per cent over the previous week's average of Tk 2.82 billion.

Block trade contributed 10.20 per cent to the week's total turnover, with stocks like Al-Arafah Islami Bank, UCB, Exim Bank, AB Bank, Sonar Bangla Insurance and SK Trims dominating the block trade board.

The EBL Securities said the market edged higher following the circular of the Bangladesh Bank.

However, a section of investors remained worried about the liquidity shortage while some investors resorted to short-term profit booking, it noted.

Among major sectors, the engineering sector posted the highest gain of 6.02 per cent, followed by non-bank financial institutions (2.23 per cent), power (0.86 per cent) and banking (0.40 per cent).

The telecommunications sector witnessed the highest loss of 1.99 per cent, followed by pharmaceuticals (0.13 per cent).

The market capitalisation of the DSE also rose 0.26 per cent to Tk 3,858 billion on Thursday from Tk 3,848 billion in the week before.

The gainers outnumbered the losers, as out of 351 issues traded, 171 closed higher, 143 ended lower and 37 issues remained unchanged on the DSE floor.

The BRAC Bank dominated the turnover chart, with 7.86 million shares worth Tk 799 million changing hands. The company accounted for 4.45 per cent of the week's total turnover.

The other turnover leaders were Fortune Shoes, SK Trims Industries, United Power and IFIC Bank.

Global Insurance was the week's best performer, posting a gain of 42.64 per cent while Rupali Life Insurance was the worst loser, losing 19.33 per cent.

The port city bourse, Chittagong Stock Exchange (CSE), also returned to the green zone, with its CSE All Share Price Index -- CASPI -- advancing 40 points to settle at 16,041 and the Selective Categories Index -- CSCX -- gaining 21 points to finish at 9,708.

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