WEEKLY MARKET REVIEW: Stocks rebound on strong earnings growth

The benchmark equity index of the Dhaka Stock Exchange (DSE) closed in the green this week, recovering from two consecutive weeks of losses, as investors showed renewed buying interest in selective stocks that posted strong earnings growth in their latest financial disclosures.

Market analysts pointed out that investor sentiment improved as traders rushed to take positions in stocks that posted hefty profit growth, boosting overall market confidence.

A leading stockbroker said the market index remained under selling pressure during the early part of the week as investors adopted a cautious stance amid regulatory reform measures, particularly the approval of new margin rules.

However, renewed buying pressure emerged in the latter part of the week as investors perceived particular blue chip stocks as attractive, considering the latest earnings and dividend announcements, which led the benchmark index to snap its two-week losing streak, said the stockbroker.

This week, three trading sessions managed to close higher, while the remaining two ended lower on the prime bourse.

The DSEX, the prime index of Dhaka Stock Exchange, finally settled the week 30 points, or 0.60 per cent, higher to 5,150. The index had lost 296 points in the past two consecutive weeks.

EBL Securities, in its market analysis, said that stocks staged a partial recovery this week amid heightened volatility as investors resorted to bargain hunting following the significant downturn.

Impressive earnings disclosures of some blue chip companies such as Square Pharma, BRAC Bank, LafargeHolcim, Beacon Pharma and City Bank attracted investors to their shares during the week.

Subsequently, the price surge of Square Pharmaceuticals, BRAC Bank, LafargeHolcim Bangladesh, City Bank and Pubali Bank, pulled the market index higher. These five stocks jointly accounted for a 34-point rise in the index.

Square Pharmaceuticals, the largest drug manufacturer in the country, has posted record annual profit of Tk 23.43 billion in FY '25, driven by higher sales.

Following the strong earnings growth, the drug maker's stock rose 3.2 per cent to Tk 215.7 on Thursday, contributing 12.3 points to the DSEX alone in the week.

Another blue chip stock, BRAC Bank posted the highest-ever quarterly profit of Tk 6.30 billion in the July-September quarter. The bank's stock surged 3.64 per cent, accounting for a 9.8-point rise of the prime index.

LafargeHolcim also secured an impressive 36 per cent year-on-year growth in profit to Tk 1.20 billion in the July-September quarter. LafargeHolcim's stock price jumped 5.5 per cent during the week, accounting for a 4.4-point rise of the prime index.

As a result, the blue-chip DS30 index, a group of 30 prominent companies, surged more than 30 points to close at 1,998 while the DSES index, which represents Shariah-based companies, rose more than 2 points to 1,088.

However, market liquidity continued to remain subdued; the total turnover stood at Tk 21.38 billion as against Tk 26.11 billion in the week before.

Accordingly, the average daily turnover dropped to Tk 4.28 billion, down 18 per cent from the previous week's average turnover of Tk 5.22 billion.

Investors were mostly active in the pharma sector, which accounted for 13 per cent of the week's total turnover, followed by engineering (10.2 per cent) and general insurance sector (10 per cent).

Losers, however, outnumbered the gainers, as out of 392 issues traded, 203 saw price correction while 157 others gained and 32 issues remained unchanged on the DSE floor.

All the major sectors showed positive performance. Pharmaceuticals posted the highest gain of 1.7 per cent, followed by telecom, food, power, non-bank financial institutions and banking sectors.

Orion Infusions became the most-traded stocks, with shares worth Tk 1.05 billion changing hands, closely followed by Dominage Steel Building Systems, Square Pharma, and Khan Brothers PP Woven Bag Industries.

The Chittagong Stock Exchange, however, remained in the red, with its All Shares Price Index (CASPI) shedding 55 points to close at 14,413, while the Selective Categories Index (CSCX) lost 16 points to 8,882.

The port city bourse traded 8.91 million shares and mutual fund units with turnover value of Tk 676 million.

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