Weekly analysis

Average turnover exceeds Tk 6.0 billion-mark on DSE

Stocks witness mild correction on profit booking


Babul Barman | Published: April 15, 2018 10:19:45 | Updated: April 18, 2018 12:12:28


The prime index of the Dhaka Stock Exchange (DSE) posted a moderate correction last week that ended Thursday, after witnessing the biggest single-week gain since its inception in January 2013.

Market insiders said the fall in the index was expected as the market was going upward for the last two straight weeks making substantial gains in indexes.

"The market slipped into the red as retail investors went for booking profits that saw significant gain in recent price upsurge, particularly financial issues," said an analyst at a leading brokerage firm, requesting anonymity.

However, investors' active participation kept the turnover buoyant as average turnover on the major bourse exceeded Tk 6.0 billion-mark for the first time after five months since November 2017.

The week featured five trading sessions as usual. Of them, first two sessions closed higher while last three faced correction.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), settled the week at 5,813 points, losing 28 points or 0.48 per cent over the week before.

"Such correction was triggered as investor booked quick profit from last two weeks market improvement," commented City Bank Capital Resources, a merchant bank, in its weekly market analysis.

The non-bank financial institutions and banking sectors witnessed the highest correction after witnessing significant gain in the past two weeks.

The non-bank financial institutions sector saw 2.60 per cent correction after gaining 10.30 per cent in the previous week while banking sector faced 2.10 per cent correction, snapping the previous week's 5.20 per cent return.

Two other indices also saw modest correction with the DS30 index, comprising blue chips, fell 7.74 points to finish at 2,187 and the DSES (Shariah) index shed 3.71 points to settle at 1,353.

Port city bourse the Chittagong Stock Exchange (CSE) also returned to the red with the CSE All Share Price Index - CASPI - falling 84 points to settle at 17,934 and Selective Categories Index - CSCX -losing 55 points to close at 10,837 points.

According to International Leasing Securities, the prime index of the major bourse witnessed price correction in the week after posting the highest weekly return of 244 points in the last week.

"Following the previous week's upsurge, the market started the week with optimism, but from the third session shaky investors started to book profit in the sector specific stocks and continued till the last session," the stockbroker said.

The stockbroker noted that investors mostly booked profit on the financial institutions, bank, engineering and food sectors' stocks which saw substantial gains in recent price upsurge.

Turnover, another important indicator of the market, stood at Tk 31.07 billion last week against Tk 27.14 billion in the week before.

Block trade contributed 4.70 per cent to the week's total turnover, where stocks like Grameenphone, Square Pharma, Al-Arafah Islami Bank, Shahjibazar Power, Popular Life Insurance, BATBC and City Bank dominated the block trade board.

The daily turnover averaged Tk 6.21 billion, which was 14.46 per cent higher than the previous week's average of Tk 5.43 billion.

"The weekly average turnover increased by 14.46 per cent and reached Tk 6.21 billion-mark after November, 2017, which indicates that investors took fresh position during the week," said the International Leasing.

The fuel & power sector kept its dominance in turnover chart, grabbing 18 per cent of the week's total turnover, followed by banking with 16 per cent and pharmaceuticals 15 per cent.

The market capitalisation of the DSE also fell 0.13 per cent as it was Tk 4,051 billion on opening day of the week while it came down to Tk 4,046 billion on Thursday.

Apart from financial sectors, engineering, food & allied, ceramic and pharmaceuticals also lost 1.90 per cent, 1.50 per cent, 0.50 per cent and 0.20 per cent respectively.

On the other hand, telecommunication, cement, power and textile sectors gained by 1.70 per cent, 1.40 per cent, 0.90 per cent and 0.70 per cent respectively.

The losers took a modest lead over the gainers as out of 341 issues traded, 187 closed lower, 130 advanced and 24 issues remained unchanged on the DSE floor.

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