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Weekly market analysis

Stocks gain for fourth straight week

Investors keep a wary eye on banking sector issues


FE Report | Published: November 25, 2017 11:04:48 | Updated: November 26, 2017 17:01:53


Stocks witnessed yet another bullish week, extending the gaining streak for the fourth straight week, as investors continued their buying appetite on sector-wise issues amid optimism.

Brokers said the positive momentum in sector-specific issues, especially from fuel & power, engineering, pharmaceuticals and food & allied sectors helped the major bourse to close at record high.

The week featured five trading sessions as usual. Of them, four sessions closed higher while one saw marginal correction.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), which replaced the DGEN in nearly five years back, went up by 40.42 points or 0.64 per cent to settle at a record high at 6,322. It was the highest level of DSEX since its inception on January 27, 2013.

"The market rally continued as investors showed their buying appetite on sector-wise stocks and taking the DSEX to the record high," commented City Bank Capital Resources, a merchant bank, in its weekly analysis.

The merchant bank noted that in four consecutive weeks the bourse added 304.3 points to its prime index.

The DSE Shariah Index (DSES) also jumped to 1,393, after gaining 18 points or 1.31 per cent. It was also the highest level of DSES since its introduction on January 20, 2014.

However, the DSE 30 Index comprising blue chips fell 2.29 points or 0.10 per cent to finish at 2,277.

The port city bourse Chittagong Stock Exchange (CSE) also nudged higher with its Selective Categories Index, CSCX, advancing 75.20 points or 0.63 per cent to finish at 11,844.

The total turnover for the week amounted to Tk 49.74 billion on the DSE, which was Tk 46.85 billion in the week before.

Block trade contributed 2.40 per cent to the total weekly turnover, where stocks like Shahjalal Islami Bank, Olympic Industries, Grameenphone, Singer Bangladesh and Square Pharma dominated the block trade board.

The daily turnover averaged Tk 9.95 billion, which was 6.16 per cent higher than the previous week's average of Tk 9.36 billion.

The total market capitalisation of the DSE also rose to all-time high to Tk 4,262 billion on Thursday, surpassing the previous high of Tk 4,261 billion recorded on November 19, 2017.

According to International Leasing Securities, stocks witnessed another bullish week as investors showed their buying spree on large-cap stocks, especially from engineering, textile, fuel & power and pharmaceuticals sectors amid optimism.

The stockbroker noted that investors' increased concentration on power, food and NBFI sectors helped the market to close higher. However, some other investors opted for profit booking on banking and telecom sector issues as these sectors witnessed price surge in the last couple of weeks, the stockbroker said.

"Market participants were keeping a wary eye on banking sector issues as news of alarming rise of non-performing loan depressed them," said the stockbroker.

Non-performing loans (NPLs) in Bangladesh's banking sector surged over Tk 800-billion mark for the first time at the end of September last.

However, banking sector kept its dominance over the turnover chart, capturing 32 per cent of the week's total transaction, followed by financial institutions with 17 per cent and engineering 12 per cent.

Among the major sectors, fuel & power posted the highest gain of 1.32 per cent, followed by pharmaceuticals with 0.90 per cent and food & allied 0.88 per cent.

Telecommunication and banking sectors lost 1.50 per cent and 0.80 per cent respectively after witnessing sharp gain in the past two weeks.

Out of 337 issues traded, 188 closed higher, 135 closed lower and 14 issues remaining unchanged on the DSE trading floor during the week.

LankaBangla Finance topped the week's turnover chart with 64.37 million shares of Tk 4.37 billion changing hands, closely followed by AB Bank with Tk 2.02 billion, Dhaka Bank Tk 1.68 billion, Shahjalal Islami Bank Tk 1.51 billion and Square Pharmaceuticals Tk 1.49 billion.

Eastern Cables was the week's best performer for the two consecutive weeks, posting a gain of 27.06 per cent while Gemini Sea Food was the week's worst loser.

The company share tumbled 51.20 per cent.

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