Weekly market review: Stocks sink deeper as economic jitters grow

BABUL BARMAN | Saturday, 21 May 2022

Stocks witnessed yet another major setback in the week to Thursday as nervous investors rushed to dump their holdings to avoid further erosion of their portfolios.

The week saw four trading days instead of usual five days as the market remained closed on Sunday on the occasion of Buddha Purnima and all the four days witnessed sharp fall amid growing concerns over the country's economic situation.

Week on week, the key DSEX index of Dhaka Stock Exchange (DSE), plunged 307.22 points or 4.68 per cent to settle at 6,258. The DSEX shed about 404 points in the past three consecutive weeks.

The prime bourse saw some Tk 239 billion of its market capitalisation wiped out this week and it came down to Tk 5,098 billion on Thursday as investors sold large-cap stocks.

Market operators said multiple factors such as soaring inflation, imbalance in current account balance, shortage of dollar supply and local currency devaluation coupled with rising cost of business have together dented investor sentiment.

The stock market remained unstable due to rising inflation which reduced the investors' buying power while depreciation of the local currency leading to foreign investors' share sales, said a merchant banker, wishing not to be named.

The downturn was also fuelled by fears that the interest rate would be raised in an attempt to tackle the inflation, said a leading broker.

The stock market regulator is trying to increase institutional fund flows to the market, but failed to revive the market sentiment, he said.

So, the risk-averse investors kept their selling spree on large-cap stocks to avoid further erosion of their portfolios, he said.

The nervous investors offloaded their holdings after noticing that the heavyweight issues, including multinational ones, kept falling in the past few days, putting pressure on the indices, he said.

According to International Leasing Securities, excessive sale pressures of the panicky investors dipped the key index to the lowest in the last ten months.

The week's total turnover also dropped to Tk 32.35 billion on the prime bourse as against Tk 53.98 billion in the week before.

The daily turnover averaged out at Tk 8.08 billion, down 25 per cent from the previous week's average of Tk 10.79 billion.

Two other indices also ended sharply lower. The DS30 index, comprising blue chips, shed 90.24 points to finish at 2,316 while the DSE Shariah Index (DSES) lost 49.13 points to close at 1,383.

All the sectors faced selling pressures, leading to the share price erosion of more than 93 per cent of equities during the week. Out of 386 issues traded, 360 declined, 20 advanced and six remained unchanged.

General insurance sector faced a big blow, losing 10.6 per cent, followed by life insurance (9.9 per cent), financial institutions (6.60 per cent), food (6.4 per cent), engineering (6.0 per cent), power (4.30 per cent) and telecom (3.10 per cent).

Beximco was the most-traded stock with shares worth Tk 2.03 billion changing hands, followed by Shinepukur Ceramics (Tk 1.59 billion), JMI Hospital Requisite Manufacturing (Tk 1.32 billion), Islami Bank (Tk 911 million) and RD Food (Tk 720 million).

S Alam Cold Rolled Steels was the week's top gainer, posting a 34.15 per cent gain in the falling market, while RD Food was the worst loser, shedding 18.30 per cent.

The Chittagong Stock Exchange (CSE) also fell sharply with the CSE All Share Price Index (CASPI) shedding 809 points to settle at 18,439 and its Selective Categories Index (CSCX) losing 486 points to close the week at 11,064.

Of the issues traded, 312 declined, 34 advanced and five issues remained unchanged on the CSE trading floor.

The bourse traded 46.99 million shares and mutual fund units with turnover value of Tk 1.21 billion.

[email protected]