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The Financial Express

Weekly sector-wise analysis

Banking sector suffers most

| Updated: May 13, 2018 16:21:00


14 sectors see correction, five gain

The major sectors continued to suffer losses with the banking sector witnessing the highest correction as the market extended the losing streak for the third straight week.

Of the 19 sectors listed with the prime bourse, except corporate bonds, debenture and treasury bonds, the market-cap of 14 faced correction while five managed to close green, according to weekly analysis of the Dhaka Stock Exchange (DSE) and LankaBangla Securities.

Market insiders said almost all the sectors ended lower as the market extended losses for the three consecutive weeks amid disappointing quarterly earnings results.

For most of the recent weeks, financial stocks again took a big hit with the banking sector losing the most with 5.50 per cent, followed by non-bank financial institutions with 2.50 per cent.

The heavyweight banking sector suffered 5.50 per cent losses as lower-than-expected dividend declarations coupled with poor quarterly earnings results frustrated investors.

"Lower than expected first quarter (Q1) earnings results of six banks, out of seven, disclosed last week disappointed the investors most," said an analyst at a leading brokerage firm.

Al-Arafah Islami Bank's consolidated earnings per share (EPS) fell to Tk 0.41 for January-March, 2018 quarter against Tk 0.71 in the same period of the previous year.

Accordingly, the Al-Arafah Bank's share price fell 14.60 per cent during the week to close at Tk 14.60 each.

Uttara Bank, Exim Bank, Eastern Bank, Dhaka Bank and Standard Bank also disclosed disappointing Q1 earnings last week and prices of these banks also fell substantially during the week.

Among the banks, 12 suffered more than 6.0 per cent correction with Prime Bank witnessing the highest loss of 15.20 per cent, followed by Al-Arafah Bank with 14.60 per cent, Uttara Bank 13.90 per cent, Rupali Bank 10 per cent, SIBL 9.10 per cent, Bank Asia 8.90 per cent, Exim Bank 8.30 per cent, BRAC Bank 7.60 per cent.

Eastern Bank, City Bank, Mercantile Bank, First Security Islami Bank and Trust Bank also lost 7.60 per cent, 7.50 per cent, 6.90 per cent, 6.20 per cent and 4.60 per cent respectively.

The non-bank financial institutions witnessed 2.50 per cent loss as prices of 20 issues of the sector ended lower, out of 23.

Of the non-bank financial institution issues, Bangladesh Industrial Finance Company witnessed the highest correction following the media reports that the BIFC faces liquidation as it has failed to pay back loans and deposits of Tk 6.40 billion to 19 banks and seven NBFIs.

Maj (retd) Abdul Mannan, former chairman of BIFC, on Thursday claimed that a vested quarter was plotting to acquire his shares in the non-bank financial institution.

Consequently, the BIFC's share price fell 16.90 per cent to close at Tk 7.40 on Thursday, much below its face value.

It was followed by BD Finance with 12.40 per cent loss, Premier Leasing 6.90 per cent, LankaBangla Finance 6.10 per cent, FAS Finance 6.30 per cent, International Leasing 5.90 per cent, Bay Leasing 5.80 per cent, Islamic Finance 5.80 per cent and Midas Financing 5.60 per cent.

The jute sector also lost 4.78 per cent, followed by paper & printing with 3.52 per cent, insurance 2.20 per cent, miscellaneous 2.07 per cent, ceramic 1.88 per cent, travel & leisure 1.87 per cent, food & allied 1.10 per cent, pharma 1.10 per cent, tannery 0.57 per cent, cement 0.30 per cent, mutual fund 0.13 per cent, and telecom 0.04 per cent.

On the other hand, services & real estate, IT, engineering, fuel & power and textile sectors closed higher, gaining 4.85 per cent, 3.03 per cent, 2.72 per cent, 2.62 per cent and 0.93 per cent respectively.

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