Stocks edge up ahead of Eid holiday

The benchmark equity index edged up this week ahead of long Eid holiday, as investors showed buying interest in select stocks with short-term gain potential while pre-Eid sell pressure eased.

The market will remain closed for nine days from March 28 to April 5, including weekly holidays, on the occasion of Eid-ul-Fitr, the biggest religious festival of the Muslims.

Although overall market sentiment remains bearish, the investors' buying interest in certain large-cap stocks pushed the key index into the green, according to market operators.

As a result, the market largely remained upbeat as the buyers dominated the trading floor and the market recovery was further supported by price increases in some blue-chip stocks, which had recently seen a correction.

This week saw four trading days instead of regular five days, as the market remained closed on Wednesday on the occasion of the Independence Day. The first session saw moderate correction while the last three sessions closed higher.

DSEX, the key index of the Dhaka Stock Exchange (DSE), finally settled the week 17 points or 0.34 per cent higher at 5,219. The index had shed 24 points the previous week.

The blue-chip DS30 index, a group of 30 prominent companies, also gained more than 27 points to close at 1,915 while the DSES index, which represents Shariah-based companies, rose10 points to 1,168.

In a weekly analysis, EBL Securities said stocks returned to positive territory in the final week before the Eid vacation as buyers showed interest in certain stocks, particularly those experienced significant corrections in the recent weeks.

The market opened the week on a dismal note as investors continued to prefer selling off their holdings and observing the market momentum amid political concerns.

However, buyers later stepped in to capitalize on the corrections as well as rebalancing their portfolios ahead of the quarter-end, leading the benchmark index to witness a gaining streak of three consecutive sessions, said the stockbroker.

Despite prevailing political and economic uncertainty, a section of investors bought specific undervalued stocks with strong growth potential, contributing to the market recovery, said a leading stockbroker.

Also, the investor participation was observed in certain December-closing bank stocks ahead of their corporate declarations, along with select blue-chip shares, he added.

Price surge of selective stocks, such as Beximco Pharmaceuticals, Islami Bank Bangladesh, Eastern Bank, Al-Arafah Islami Bank and ACI pulled the market index up as they jointly accounted for a 25-point rise in the key index.

Beximco Pharma alone contributed a 13.8-point rise to the key index as the drug manufacturer stock price jumped more than 13 per cent during the week to close at Tk 99.1 on Thursday.

However, low performing stocks continued to see price surge, without any reason for investors to be keen on betting on these stocks.

Three junk stocks --- First Finance, Shyampur Sugar Mills and Progressive Life Insurance -- featured in the weekly gainers' list, soaring 14.7 per cent, 10.2 per cent and 9.3 per cent respectively this week despite their ongoing financial struggles.

Analysts said that speculative trading and short-term profit motive may have fuelled the junk stock price jump, as no major changes in fundamentals were observed in these companies.

Turnover, a crucial indicator of the market, stood at Tk 16.27 billion this week, sharply down from Tk 23.84 billion in the week before as this week saw four trading days instead of previous week's five.

Consequently, the average daily turnover reached Tk 4.06 billion, 15 per cent down from the previous week's figure of Tk 4.76 billion.

Investors were mostly active in the pharmaceuticals sector, which accounted for 19.6 per cent of the week's total turnover, followed by the engineering sector (10.9 per cent) and textile sector (9.9 per cent).

The major sectors showed positive performance this week. Pharmaceuticals sector booked the highest gain of 1.43 per cent, followed by non-bank financial institutions, telecom, food, and banking sectors.

Orion Infusion was the most-traded stock with shares worth Tk 1.10 billion changing hands, followed by Beximco Pharma, Shinepukur Ceramics, TB20Y0744 (Twenty years T-Bond) and Beach Hatchery.

The Chittagong Stock Exchange (CSE) also ended higher, with CSE All Share Price Index (CASPI) gaining 18 points to 14,541 while its Selective Categories Index (CSCX) rose 8 points to 8,843.

The port-city bourse traded 14.03 million shares and mutual fund units, with a turnover value of Tk 508 million.

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