Small companies rule market erosion with majority stocks stuck on floor

The Paper & Printing sector comprising small-cap companies saw the highest price erosion on the Dhaka Stock Exchange (DSE) on Tuesday.

It declined 3.5 per cent mainly because of the price correction endured by Hakkani Pulp & Paper Mills and Sonali Paper & Board Mills.

These two companies were on the chart of top 10 losers on the premier bourse when the DSEX, broad index of the Dhaka bourse, declined marginally, extending losing streak for the second consecutive session.

At the end of the session, the DSEX settled at 6193.08 points after a loss of 0.17 per cent or 10.83 points.

"Under the existing situation, price movement of small-cap companies become visible as it's very easy to influence the prices of such stocks with limited investments," said Mr. Moniruzzaman, managing director at IDLC Investments.

Most of the investors were inactive on the trading platform as a majority of the listed securities were stuck at floor prices, he added.

The share of Hakkani Pulp & Paper Mills was the second highest loser on the DSE, having eroded 5.17 per cent to close at Tk 53.20 each.

The company experienced a reduction in market value after a quick 15 per cent surge in the stock price between March 20 and March 27 this year.

Its recent financial disclosure, however, does not justify the price appreciation.

Hakkani Pulp reported a loss of Tk 0.37 per share for October-December 2022, showing no improvement in its business performance from the same quarter of the previous year when it counted Tk 0.38 in loss per share.

Sonali Paper & Board Mills was the third worst loser as the share price came down 5 per cent to close at Tk 631.10.

Of the other companies of the paper & printing sector, the share price of Bashundhara Paper Mills declined 1.68 per cent and Bangladesh Monospool Paper Manufacturing Company fell 1.85 per cent.

The price of the remaining two companies -- Khulna Printing & Packaging and Paper Processing & Packaging -- did not move from the floor price.

Some small-cap companies of other sectors dominated the chart of top 10 losers on the DSE.

Jute Spinners was the number one loser on Tuesday, having declined 6.76 per cent in market value.

Its loss in business rose in October-December 2022, compared to the same quarter of the previous year.

It reported a loss of Tk 11.76 per share for October-December 2022, up from Tk 10.83 per share in the same period of the previous year.

Of other top losers, GQ Ball Pen Industries declined 4.56 per cent, Bengal Windsor Thermoplastics 3.77 per cent, Prime Bank 3.02 per cent, Zeal Bangla Sugar Mills 3.36 per cent, Shyampur Sugar Mills 3.26 per cent, Sinobangla Industries 3.07 per cent, and Imam Button Industries 2.89 per cent.

"The market observed volatility during the whole session as the risk-averse investors went for profit booking sell-offs on sector specific issues," reads a market review of International Leasing Securities.

Of total issues traded, 28 advanced, 56 declined and 201 were unchanged. The DSE recorded a turnover of Tk 2.72 billion, 14 per cent less than the previous session.

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