Stocks halt rout in choppy trade

Stocks posted a slight uptick last week following six consecutive weeks of declines, as bargain hunters snapped up lucrative blue-chip stocks in anticipation of short-term gains.

After hitting a fresh five-year low last week, the market gained some ground, buoyed by regulatory efforts, although economic and political uncertainties continue to cloud the outlook.

As part of its efforts to boost the investor confidence, the Bangladesh Securities and Exchange Commission (BSEC) will hold a consultation meeting with the representatives of retail investors' organisations on May 29.

The BSEC believes that the sustainable development and reform of the capital market can be implemented in consultations with stakeholders, including the representatives of retail investors.

Moreover, the interim government has planned a number of initiatives, including the offloading of government stakes in state-run and multinational companies, to increase the availability of quality shares in the market.

Last week, the market ended lower three sessions out of six, as jittery investors continued to seize every opportunity to liquidate their holdings in the ailing market.

Finally, the benchmark DSEX index of the Dhaka Stock Exchange (DSE) inched up 4 points or 0.09 per cent to settle the week at 4,785. The index shed 425 points in the previous six consecutive weeks.

EBL Securities, in its weekly market analysis, said the market navigated a volatile trading momentum, although a brief spell of buying by bargain hunters somewhat helped to ease the market's prolonged downturn.

However, a cautious selling approach persisted as jittery investors continued to capitalize on opportunities to liquidate their holdings in the volatile market in absence of any decisive catalyst for reviving the market's momentum.

Price hike of selective stocks, such as Beacon Pharma, Beximco Pharma, BRAC Bank, Social Islami Bank and Shinepukur Ceramics pulled the market index up as they jointly accounted for a 17-point rise in the key index.

However, the price fall of BAT Bangladesh, Grameenphone, United Commercial Bank, Bank Asia and Islami Bank wiped out most of the gains.

Although some bargain hunting activity was observed in sector-specific stocks, lingering pessimism and waning investor confidence kept most investors away, said a leading stockbroker.

The total turnover on the prime bourse stood at Tk 17.22 billion last week, up from Tk 12.99 billion the previous week, as this week saw six trading days instead of previous week's four days.

Consequently, the average daily turnover plunged to Tk 2.87 billion, 12 per cent down from the previous week's figure of Tk 3.25 billion.

Investors were mostly active in the banking sector, which accounted for 17.5 per cent of the week's total turnover, followed by the pharma sector (14.4 per cent) and food sector (10.3 per cent).

Moreover, investors preferred to adopt a cautious stance ahead of the upcoming budget declaration for the next fiscal year that also allowed the bearish forces to firm their controls over the realm of the market's momentum.

The blue-chip stocks DS30 index also gained 7 points to 1,777 while the DSES Index, which represents Shariah-based companies, advanced 8 points to 1,047.

Major sectors showed mixed performance. Engineering, power, pharma and the non-bank financial institution sectors witnessed price gains while telecommunication, food and banking sectors saw price correction.

Of the 390 issues traded, 232 closed higher, 144 ended lower, and 35 remained unchanged on the DSE trading floor.

Orion Infusion was the most-traded stock with shares worth Tk 1.0 billion changing hands, closely followed by Beach Hatchery, BRAC Bank, City Bank and Square Pharma.

The port city bourse, Chittagong Stock Exchange, also ended higher, with the CSE All Share Price Index (CASPI) rising 92 points to 13,385 while the Selective Categories Index (CSCX) gained 67 points to 8,174.

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