Stocks bounce back as political tension eases

Stocks rebounded strongly this week amid increased turnover as investors, relieved to see the clouds of political tensions start disappearing, went on buying spree.

Market operators said the investors became optimistic as the political tensions eased to some extent and dividend declarations are in the offing.

"The investors responded positively and institutional investors have also started to exhibit their active participation ahead of dividend declarations to take the advantage of lucrative price level of many stocks," said an analyst at a leading brokerage firm.

He also noted that the securities regulator's fresh move to take legal action against the directors who have failed to hold at least 2.0 per cent stakes in their respective companies individually has also made a positive impact on the market.

"This move would discourage the sponsors and directors of the companies from selling off shares," he said.

The Dhaka Stock Exchange (DSE) witnessed five trading sessions as usual this week. Of them, three sessions closed higher and two faced correction. Thursday was the last trading session of the week.

Week on week, DSEX, the prime index of the prime bourse, settled 84.57 points or 1.42 per cent higher at 6,050, after witnessing two weeks of correction.

According to City Bank Capital Resources, the market bounced back, snapping the two-week losing streak, as the country's political tension eased.

"Investors remained active ahead of divided declarations of December-ending companies, which increased the weekly average turnover by 41 per cent," said the merchant bank.

It noted that the positivity continues to exist as the premier bourse approved the proposal of a Chinese consortium to be a strategic partner of DSE although the liquidity crisis still remains in place.

Two other indices of the premier bourse also ended higher. The DS30 index, comprising blue chips, advanced 5.44 points to finish at 2,231 and DSES (Shariah) ended 15.87 points higher at 1,405.

The port city bourse, Chittagong Stock Exchange (CSE), also rebounded, with CSE All Share Price Index-CASPI-advancing 294 points to close at 18,428 and Selective Categories Index-CSCX-gaining 169 points to finish at 11,297.

"Overcoming the fear of the political uncertainty was the main reason behind the optimistic attitude of the investors," commented International Leasing Securities, in an analysis.

The stockbroker noted that investors took position in the engineering, banking and telecoms sectors while some of the investors liquidated their position from fuel and power, financial institution and general insurance sectors.

But the top gainers' list was dominated by the "Z" category stocks even though some of the companies have clarified that they have no price sensitive information to announce, said the stockbroker.

Bullish sentiment was also reflected on the trading activities as total turnover on the DSE stood at Tk 25.79 billion, up from Tk 18.27 billion the previous week.

The daily turnover averaged out at Tk 5.15 billion, up 41 per cent from the previous week's average of Tk 3.65 billion.

EBL Securities said, "Investors were active on both sides of trading fence with the expectation that the market will remain positive about the securities regulator's fresh move to penalise directors having less than required 2.0 per cent shareholding".

Three listed companies-LankaBangla Finance, Green Delta Insurance and IDLC Finance-recommended dividend last week for the year ending on December 31, 2017.

The banking sector kept its dominance on the turnover chart, grabbing 17 per cent of the week's total turnover, followed by engineering (14 per cent) and pharmaceuticals (13 per cent).

The market capitalisation of the DSE also saw a rise of 0.72 per cent-from Tk 4,147 billion on the opening day of the week to Tk 4,177 billion on Thursday.

The gainers outnumbered losers by 241 to 72, while 25 issues remained unchanged on the DSE floor.

LankaBangla Finance topped the week's turnover chart with 23.73 million shares worth nearly Tk 964 million changing hands, followed by Grameephone (Tk 680 million), Square Pharma (Tk 669 million), Brac Bank (Tk 646 million) and Monno Ceramic Industries (Tk 621 million).

Fine Foods was the week's best performer, posting a gain of 25.82 per cent, while Imam Button shed 6.92 per cent to become the week's biggest loser.

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