Weekly analysis

Stocks break six-week losing streak

Turnover remains low, falls 6.38pc on DSE


FE Report | Published: June 09, 2018 11:20:26 | Updated: June 10, 2018 13:13:45


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Stocks posted marginal gains last week, snapping a six-week losing streak, amid budgetary expectations.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 22.79 points to settle the week at 5,366.

Analysts said the investors went for buying shares in anticipation of corporate tax cut of listed banks and financial institutions for the upcoming fiscal year 2018-19.

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Finally, Finance Minister AMA Muhith has proposed to cut corporate tax rate by 2.5 per cent for the listed banks and financial institutions for the fiscal year (FY) 2018-19.

Corporate tax rates for other publicly traded companies will remain unchanged.

"The investors responded positively to the news of possible corporate tax cut on listed banks, non-bank financial institutions, especially third and fourth session of the week," said an analyst at a leading brokerage firm.

However, investors were frustrated on the budget declaration day, as the there was no specific direction on the capital market except corporate tax cut for listed banks and financial institutions, he said.

The week featured five trading sessions as usual. Of them, three sessions ended lower while two closed higher.

The DS30 index, comprising blue chips, also advanced at 1,978 points.

However, the DSES (Shariah) index saw a fractional loss of 0.27 points to settle at 1,238.

The Chittagong Stock Exchange (CSE) also finished marginally higher with the CSE All Share Price Index - CASPI -advancing 58 points to settle at 16,549.

The Selective Categories Index - CSCX - also gained 35 points to close at 10,012.

According to International Leasing Securities, the market returned to the green as investors anticipated an investment-friendly national budget.

The stockbroker noted that the investors mainly took position on bank and financial institutions' sectors stock riding on the news that government may cut corporate tax rate in the budget.

Top gainer and loser lists were mostly comprised of small-cap stocks where the turnover list was dominated by large-cap stocks, said the stockbroker.

"Trading activities remained low, which indicates that investors were staying on the sidelines and observing the market movement, carefully," said the stockbroker.

Total turnover on the DSE also came down to Tk 21.20 billion last week, against Tk 22.65 billion in the week before.

The daily turnover averaged Tk 4.24 billion, which was 6.38 per cent lower than the previous week's average of Tk 4.53 billion.

The textile sector topped the turnover chart, capturing 17 per cent of the week's total turnover, closely followed by engineering with 15 per cent and pharmaceuticals 13 per cent.

The market capitalisation of the DSE also fell slightly by 0.08 per cent as it was Tk 3,899 billion on opening day of the week while it came down to Tk 3,796 billion on Thursday.

Of the issues traded, 158 closed lower, 154 advanced and 30 issues remained unchanged on the DSE floor.

Alif Industries was the week's most traded stock with 10.91 million shares worth Tk 1.15 billion changing hands, followed by Beximco with Tk 724 million, Monno Ceramic Industries Tk 660 million, Intraco Refueling Station Tk 643 million and Square Pharma Tk 589 million.

BD Autocars was the week's best performer, posting a gain of 47.36 per cent while the MBL 1st Mutual Fund was the worst loser, with 11.76 per cent decline.

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