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The Financial Express

Weekly analysis

Year's last week ends on high note

Stocks break four-week losing streak


FE Report | Published: December 30, 2017 11:25:26 | Updated: January 01, 2018 11:32:17


Year's last week ends on high note

Stocks rebounded last week that ended Thursday, the last week of 2017, snapping a four-week losing streak, as investors showed their buying appetite on large-cap stocks amid New Year optimism.

Analysts said the market rebounded backed by substantial gain of large-cap stocks like Lafarge Surma Cement.

"Lafarge contributed a lot to keep the market afloat due to the news of sealing acquisition deal with Holcim Bangladesh at Tk 5.04 billion, a price that was previously set by the Bangladesh Bank," said an analyst at a leading brokerage firm.

Accordingly, the multinational cement producer dominated the week's turnover and gainer chart with a turnover of Tk 1.58 billion and gained 28.73 per cent.

"Lafarge is the seventh largest market cap listed company in the country's capital market and its price movement affect the overall market," said the analyst.

The week featured four trading sessions as the market remained closed Monday due to Christmas Day. Of them, first trading session faced mild correction while last three closed higher.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 61.73 points or 1.0 per cent to finish the year at 6,244.

Meanwhile, DSEX registered 1208 points or 24 per cent return year-on-year in 2017.

"Such moderate gain in market indices was backed by considerable gain in large-cap stocks like Lafarge Surma Cement," commented City Bank Capital Resources, in its weekly market analysis.

The merchant bank noted that Lafarge contributed most to keep the market positive due to the news of closing the acquisition deal with Holcim Cement at Bangladesh Bank's amended price of Tk 5.05 billion.

The two other indices also closed higher. The DSE 30 Index comprising blue chips rose 52 points or 2.33 per cent to finish at 2,283. The DSE Shariah Index (DSES) also rose 24 points or 1.76 per cent to close at 1,390.

Chittagong Stock Exchange (CSE) also rebounded higher with CSE All Share Price Index -- (CAPSI) - advanced 145 points or 0.76 per cent to finish at 19,268.

The Selective Categories Index of the port city bourse -- CSCX, also rose 91 points or 0.79 per cent to close at 11,649.

Riding on Lafarge Surma, the average daily turnover on the premier bourse rose to Tk 4.78 billion, which was nearly 12 per cent higher from the previous week's average of Tk 4.28 billion.

EBL Securities, a stockbroker, said, "Investors started taking fresh position to proceed with a heads up in the New Year. Rally of some specific large-cap scrips such as Lafarge helped the index make a turnaround".

Banking sector kept its dominance over the turnover chart, capturing 27 per cent of the week's total transaction, followed by engineering with 12 per cent and textile 10 per cent.

According to International Leasing Securities, the market back to the green in the last week of the year after four weeks of profit booking sell pressure as the optimistic investors showed their buying appetite on large-cap stocks.

The stockbroker noted that the optimistic drive was mainly initiated by the investors' buying spree on the telecom, bank and food sectors.

The market capitalisation of the DSE also advanced 1.17 per cent as it was Tk 4,180 billion at opening day of the week while it rose to Tk 4229 billion Thursday.

Among the major sectors, cement sector gave massive weekly gains with 15.89 per cent gain, riding on a stellar week from Lafarge Cement.

Telecommunication, banking and food & allied sectors also registered positive movement with 1.80 per cent, 1.70 per cent and 1.50 per cent gain respectively.

Out of 339 issues traded, 202 closed lower, 112 closed higher and 25 issues remained unchanged on the DSE trading floor last week.

Lafarge Surma Cement topped the week's turnover chart with 22.66 million shares worth Tk 1.58 billion changing hands, closely followed by Nahee Aluminum with Tk 789 million, Islami Bank Tk 631 million, Square Pharma Tk 458 million and Olympic Industries Tk 424 million.

Lafarge Surma was also the week's best performer, posting a gain of 28.73 per cent while Emerald Oil Industries was the week's worst loser, slumping by 14.95 per cent.

A new issue -- Nahee Aluminum Composite Panel made debut last week. The company's share price closed at Tk 81.60, registering an increase of 716 per cent on its issue price of Tk 10 on first day.

On the other hand, Alif Industries, which was in the OTC market for more than eight years, backed to DSE main market and commenced trading from Thursday as the company complied with all the regulations required for beginning trade in the main board.

Each share of Alif Industries closed at Tk 143 on Thursday, soaring 10 per cent.

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