Large-caps drive stocks into green but volatility remains

Equity benchmark index posted a marginal recovery in the outgoing week amid high volatility, ending a two-week losing streak, as bargain hunters opted to take positions in specific trending stocks.

Market experts noted that stocks showed signs of recovery due to investors' interest in specific shares, although overall market participation has yet to rebounded across the trading floor.

The price appreciation of selective large-cap stocks, including Islami Bank, Grameenphone, Beacon Pharma, Pragati Life Insurance, and Robi Axiata, contributed to the market's recovery.

These five stocks contributed more than 36 points to the rise in the key index of the Dhaka Stock Exchange (DSE) this week, with Islami Bank alone accounting for more than 21 points.

However, the fall in prices of Orion Pharma, Beximco Pharma, Kohinoor Chemicals, Prime Bank, and Renata wiped out most of the weekly gains.

This week, the market witnessed four trading days instead of regular five days, as the market remained closed on Monday on the occasion of Eid-e-Milad-un-Nabi.

The market experienced losses in the first two sessions, but the last two sessions closed higher as bargain hunters stepped in to support the market by investing in sector-specific issues.

As part of the ongoing reform initiatives, the securities regulator took a number of decisions this week, including forming a body to investigate alleged financial anomalies in Strategic Equity Management Limited (SEML), owned by Chowdhury Nafeez Sarafat and his family.

The regulator also ordered a probe into the recent escalation of the stock of Khan Brothers and fined Tk 10 million to Hami Industries' chief for stock price manipulation.

Amid these developments, stocks witnessed a mixed reaction as bulls and bears confronted to grab the reign of the market momentum, and the benchmark index eventually settled in green.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), finally settled the week 8.75 points or 0.15 per cent higher at 5,735, after shedding 78 points in the past two straight weeks.

The blue-chip DS30 index, a group of 30 prominent companies, climbed 6 points to 2,106 while the DSES index, which represents Shariah-based companies, gained 12 points to close at 1,257.

The market began the week on a gloomy note as investors preferred to remain cautious amid the earnings declaration of June-closing companies, according to EBL Securities.

However, bargain hunters emerged to rescue the market by taking positions on sector-specific issues in the later part of the week.

"The recent foreign aid commitments to alleviate the foreign exchange reserve crisis also acted as a positive catalyst and ultimately compelled the prime index to end in positive territory," said the stockbroker.

The market turnover, a crucial market indicator, came down to Tk 24.52 billion this week, as against Tk 32.21 billion in the week before.

Accordingly, the average daily turnover stood at Tk 6.13 billion, which was 5 per cent lower than the previous week's average of Tk 6.44 billion.

Investors were mostly active in the pharma sector, which accounted for 18.7 per cent of total weekly turnover, followed by banking (13.5 per cent) and power (9 per cent).

Major sectors showed mixed performance. The telecom posted the highest gain of 3.4 per cent, followed by non-bank financial institutions with 1.20 per cent and banking sector with 0.37 per cent.

On the other hand, pharmaceutical experienced the highest loss of 1.11 per cent, followed by engineering (0.90 per cent), power (0.70 per cent) and food (0.50 per cent).

The losers, however, took a strong lead over the gainers, as out of 397 issues traded, 213 declined, 142 advanced and 42 issues remained unchanged.

Sonali Aansh Industries became the most-traded, with shares worth Tk 1.05 billion changing hands, closely followed by Linde Bangladesh, Grameenphone, Sea Pearl Beach Resorts and Orion Infusions.

Sea Pearl Beach was the top gainer with a rise of 55 per cent, while National Tea Company was the top loser, shedding 24.2 per cent.

The Chittagong Stock Exchange (CSE) also closed higher with its All Share Price Index (CASPI) gaining 50 points to settle at 16,191 while the Selective Categories Index (CSCX) rose 31 points to settle at 9,760.

The port city bourse traded 10.43 million shares and mutual fund units with a turnover volume of Tk 422 million.

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