The Financial Express

Weekly Review: Stocks post modest gain amid virus scare

Average turnover comes down to Tk 568m on DSE

| Updated: June 28, 2020 13:12:30

Weekly Review: Stocks post modest gain amid virus scare

Stocks posted a modest gain in the outgoing week although investors were mostly inactive throughout the week due to pandemic fears and floor price limitation.

Week-on-week, DSEX, the key index of the Dhaka Stock Exchange, went up by 8.70 points or 0.22 per cent to settle the week at 3,969.

The core index is hovering between 3,950 and 3,970 points in the past 17 sessions and daily turnover remained below Tk 1.0 billion as most of the sellers did not get buyers.

"The market remained inactive for three consecutive weeks as the floor price prevented investors from selling shares," commented City Bank Capital Resources.

It noted that the investors losing confidence due to low chances of economic recovery in the current year made the situation more critical.

Amid the bearish market trend and ongoing pandemic, the owners of Crest Securities Ltd, a brokerage firm of the DSE, have gone into hiding after embezzling clients' money.

A number of investors complained that the directors of the brokerage firm sold-off their (investors) shares without informing them and left the country.

The prime bourse has suspended its depository participant account and also requested the Bangladesh Bank to freeze bank accounts of the company and its directors.

The DSE is trying to assess the total amount of investors' money the company embezzled.

Market analysts said lack of institutional buyers coupled with the current floor price limitation is preventing many investors from selling shares, brining turnover to a record low.

The investors have failed to sell shares of more than two-thirds companies due to the floor price limitation, they said.

Turnover tumbled to a fresh 13-year low to Tk 386 million on June 21 as the growing virus fears and the 'floor price' system kept the investors at bay.

"The market almost standstill as the worsening pandemic situation has made the market almost buyer-less," said a merchant banker.

The proposed national budget also ignored the interest of the capital market despite the fact that the investors' confidence was shattered by the outbreak of Covid-19 in the country, he said.

Two other indices also edged higher. The DS30 index, comprising blue chips, advanced 4.89 points to finish at 1,330 and the DSE Shariah Index saw a fractional gain of 0.94 point to settle at 919.

The week's total turnover on the DSE stood at Tk 2.84 billion, down from Tk 3.39 billion in the week before.

The daily turnover averaged only Tk 568 million, which was more than 16 per cent lower than the previous week's average of Tk 678 million.

EBL Securities said the investors' worries are growing over the worsening pandemic situation with looming uncertainty about economic growth along with floor price system.

Most of the shares remained stuck at the trading floor. Of the traded issues, 284 remained unchanged while only 33 issues advanced and 20 declined on the DSE.

The market capitalisation of the DSE went up slightly to Tk 3,108 billion Thursday, from Tk 3,104 billion in the previous week.

Beximco Pharma dominated the week's turnover chart with shares worth Tk 313 million changing hands, followed by Bangladesh Submarine Cable, Linde Bangladesh, Exim Bank and Reckitt Benckiser.

Block trade contributed nearly 23 per cent to the total weekly turnover where stocks like Bank Asia, Square Pharma, MJL Bangladesh, M L Dyeing and Uttara Bank dominated the block trade board.

The Chittagong Stock Exchange (CSE) also ended marginally higher with its CSE All Share Price Index - CASPI - advancing 8.0 points to settle at 11,262 and the Selective Categories Index - CSCX no changed to close at 6,818.

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