Weekly stock market analysis

Stocks extend losing streak as banking issues dip

'Investors eyeing upcoming corporate disclosures'


Babul Barman | Published: October 28, 2017 00:54:14 | Updated: October 30, 2017 00:54:38


Stocks witnessed yet another bearish week that ended Thursday as cautious investors continued their selling spree amid mixed earnings and dividend declarations of several listed companies.

Brokers said the central bank's recent punitive action against seven banks affected the market. As a result, banking sector issues continued to decline, taking the market into red for the third straight week.

Meanwhile, last week the errant banks appealed to the central bank seeking waiver of the penalties.

"Profit taking and cautious trading amid ongoing earnings disclosures and year-end dividend declarations pushed the prime index into the red zone," said an analyst, seeking anonymity.

He noted that many investors are also eyeing upcoming corporate disclosures as most of listed banks, financial institutions and multinational companies are scheduled to release their third quarter (Q3) earnings within this month.

"The correction was triggered by the continuous fall of banking sector's issues. Some large-cap stocks could not meet the investors' expectation as they declared lower earnings and dividend," commented City Bank Capital Resources, a merchant bank, in its weekly analysis.

The merchant bank noted that the market recovered more than 50 points in last two sessions and managed to keep the benchmark index above 6,000-mark anticipating better corporate disclosures ahead.

The week witnessed five trading sessions as usual. Of them, two sessions closed red with combined loss of 74 points while three sessions saw a combined gain of 53 points.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE) went down by 21.30 points or 0.35 per cent to settle at 6,018.

The two other indices -- the DS30 index and the DSE Shariah Index (DSES) - also closed at 2,174 and 1,316 after losing 14.40 points and 12.95 points respectively.

The port city bourse, Chittagong Stock Exchange (CSE), also fell with its Selective Categories Index, CSCX, shedding 81 points or 0.71 per cent to settle at 11,249.

EBL Securities, a stockbroker noted that a good number of companies that announced their earnings and dividend, failed to meet the investors' expectation.

Total turnover for the week stood at Tk 28.49 billion on the DSE which was Tk 28.68 billion in the week before.

The average turnover stood at Tk 5.69 billion, which was 0.67 per cent lower than the previous week's average of Tk 5.74 billion. It was also the lowest average daily turnover in the past three months since June.

Banking sector kept its dominance over turnover chart, grabbing 25 per cent of the week's total transaction, followed by financial institutions with 15 per cent and engineering 6.0 per cent.

"The shaky investors persisted their sell offs to avoid further loss while some adopted "wait-and-see" stance amid ongoing quarter-end earning disclosures and year-end dividend declarations," commented International Leasing Securities, in an analysis.

A total of 34 listed companies recommended dividend last week between 250 per cent and 10 per cent for the year ended on June 30, 2017 while four recommended no dividend.

The total market capitalisation of the DSE rose 0.61 per cent as it stood at Tk 4,100 billion at the end of the week, which was Tk 4,076 billion at opening day of the week.

The losers took a strong lead over the gainers as out of 336 issues traded, 207 closed lower, 113 rose and 16 remained unchanged on the DSE.

LankaBangla Finance topped the week's turnover chart with 20.26 million shares of Tk 1.31 billion changing hands, closely followed by Brac Bank with Tk 1.26 billion, BBS Cables Tk 1.0 billion, IFAD Autos Tk 948 million and Grameenphone Tk 855 million.

Gemini Sea Food was the week's best performer, posting 62.06 per cent gain as investors grabbed its shares following the news of its hefty 125 per cent stock dividend recommendation and expansion of business plan.

Zeal Bangla Sugar Mills was the worst loser, losing 19.75 per cent following  no dividend recommendation of the company.

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