Weekly analysis

Stocks edge up amid positive earning expectations

Turnover slumps 39pc on prime bourse

Babul Barman | Published: July 29, 2017 07:44:45 | Updated: October 23, 2017 14:19:08

Stocks registered a modest gain last week that ended Thursday, after a single-week break, as investors showed their buying appetite on large-cap stocks amid optimism.


Dealers said the market closed positive as optimistic investors showed their buying appetite on sector-wise stocks while cautious investors opted for booking profit centering monetary policy announcement and ongoing earnings declaration session.


Bangladesh Bank (BB) unveiled the "growth-oriented" monetary policy for the first half of the current fiscal year (FY) 2017-18 on Wednesday while some large-cap companies showed hefty quarterly earnings.


"Recent positive second quarter (Q2) declarations from multiple companies, including some banks, helped market yield a gaining momentum," said an analyst at a leading brokerage firm.


He noted that the investors were a bit cautious before the announcement of MPS, contributing to sharp decline in weekly turnover.


The week witnessed five trading sessions as usual. Of them, the core index of the prime bourse accumulated gain of 48.83 points in three sessions while remaining two eroded 16.23 points.


Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), which replaced the DGEN in four-and-a-half-year back, went up by 32.60 points or 0.56 per cent to settle at 5,815.


The two other indices -- the DS30 index and the DSE Shariah Index (DSES) - also followed the suit to close at 2,129 and 1,318 points, after advancing 7.31 points and 3.95 points respectively.


The port city bourse, Chittagong Stock Exchange (CSE), also finished higher with its Selective Categories Index, CSCX, gaining 53 points or 0.49 per cent to settle at 10,897 points.


"This week indices reacted to the positive expectation of this earnings season," commented LankaBangla Securities, a stockbroker, in its weekly market analysis.


The total turnover for the week fell sharply to Tk 31 billion on major bourse which was Tk 50.79 billion in the week before.


The daily turnover averaged at Tk 6.23 billion, which was 39 per cent lower than the previous week's average of Tk 10.6 billion.


City Bank Capital Resources, a merchant bank, said, "Investors mostly concentrated on bank, textile, engineering, NBFIs, pharma, fuel & power and miscellaneous sectors' issues which also hold the top position as turnover contributors in turnover chart".


Accordingly, bank maintained its steep lead in turnover share, capturing 19 per cent of the week's total turnover. Second highest turnover contributor textile, contributed 14 per cent, closely followed by engineering with 13 per cent.


The merchant bank noted that block trade contributed 4.0 per cent to the total weekly turnover where stocks like Olympic Industries, BATBC, Eastern Bank, Brac Bank, IDLC Finance, and GP dominated the block trade board.


"Turnover fell significantly as the risk-averse investors booked quick-gain over last few sessions price surge and refrained from making fresh investments while some were busy with rebalancing their portfolio following the announcement of monetary policy and ongoing earnings declaration sessions," commented International Leasing Securities, a stockbroker, in an analysis.


The stockbroker noted that positive momentum in some big-cap stocks especially from telecom, bank, textile and financial institution sectors helped the indices to close higher.


Telecommunication, bank, textile and non-bank financial institutions sectors gained 3.24 per cent, 1.34 per cent, 103 per cent and 0.67 per cent respectively.


The total market cap of the DSE also edged up by 0.78 per cent last week as it was Tk 3,901 billion on the opening day of the week, while it reached record high to Tk 3,931 billion on closing day of the week.


Two mutual funds and one multinational company declared dividend last week. Southeast Bank 1st Mutual Fund declared 13.50 per cent cash and NLI First Mutual Fund declared 15 per cent cash dividend while Linde Bangladesh declared 200 per cent interim cash dividend.


LankaBangla Finance topped the week's turnover chart with shares of Tk 1.09 billion changing hands, closely followed by IFAD Autos with Tk 1.08 billion, Mercantile Bank Tk 945 million, City Bank Tk 781 million and GrameenPhone Tk 726 million.


Rupali Bank was the week's highest gainer, posting 16.71 per cent gain, while ICB AMCL Second Mutual Fund was the worst loser, losing 6.67 per cent.



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