Weekly analysis: Stocks climb ahead of budget

Stocks closed higher in the last week ending on Thursday, with investors focusing on large-cap shares amid expectations that the market would maintain its uptrend after Eid holidays.

Thursday was also the last trading day for both the bourses before the nine-day Eid vacation, including weekly and special holidays. The trading activities will resume on June 9.

Market analysts said stocks kept gaining amid investors' expectation of favourable budget declaration coupled with the news of securities regulator's move to review the public issue rules.

Finance Minister AHM Mustafa Kamal is set to place the national budget for fiscal year (FY) 2019-20 on June 13.

Earlier, Mr. Kamal said that there would be many incentives for the stock market in the upcoming budget.

The central bank's market-supportive measures widening the banks' scope to invest in the stock market have also made the investors optimistic, said a leading broker.

The week saw five trading days as usual and all five sessions finished higher.

Week on week, the DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 127 points or 2.42 per cent to settle at 5,377.

Two other indices also ended higher. The DS30 index, comprising blue chips, advanced 43.78 points to finish at 1,876 and the DSE Shariah Index rose 21.36 points to close at 1,214.

"Such gain in market indices was backed by considerable gain in large-cap stocks from major sectors like banking, NBFIs and telecom," commented City Bank Capital Resources in its weekly analysis.

The EBL Securities said market indices increased with an anticipation of favourable budget declaration coupled with the news of amendments to Bangladesh Securities and Exchange Commission (Public Issue) rules, 2015.

The total turnover stood at Tk 18.41 billion last week as against Tk 17.93 billion in the week before.

The daily turnover averaged out at Tk 3.68 billion, registering an increase of 2.70 per cent over the previous week's average of Tk 3.58 billion.

The block trade contributed 6.50 per cent to the total weekly turnover, with stocks like Square Pharma, BATBC, Grameenphone, BRAC Bank, Doreen Power dominating the block trade board.

According to the International Leasing Securities, buoyancy in large-cap sectors like banking, financial institutions, telecoms and power helped the prime index end higher.

Most of the major sectors posted gains, with life insurance witnessing the highest gain of 10.65 per cent, followed by telecommunications (4.92 per cent), non-bank financial institutions (4.68 per cent) and banking (3.78 per cent).

Power, pharmaceuticals and engineering sectors also gained 0.86 per cent, 1.48 per cent and 0.86 per cent respectively.

The market capitalisation of the DSE also rose 2.15 per cent to Tk 3,941 billion on Thursday from Tk 3,858 billion in the previous week.

Also, gainers outnumbered the losers, as out of 352 issues traded, 199 closed higher, 113 ended lower and 40 issues remained unchanged on the DSE floor.

The United Power dominated the turnover chart, with 1.91 million shares worth Tk 643 million changing hands. The company accounted for 3.49 per cent of the week's total turnover.

The other turnover leaders were National Life Insurance, BATBC, Square Pharmaceuticals and New Line Clothings.

The National Life Insurance was the week's best performer, posting a gain of 21.56 per cent while Meghna Condensed Milk was the worst loser, shedding 15.60 per cent.

The port city bourse, Chittagong Stock Exchange (CSE), also closed higher, with its CSE All Share Price Index -- CASPI -- soaring 334 points to settle at 16,375 and the Selective Categories Index -- CSCX -- gaining 208 points to finish at 9,916.

A new issue -- New Line Clothings -- made its share trading debut last week. The newcomer's share soared 131 per cent to close at Tk 23.10 on Thursday.

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