The Financial Express

Weekly analysis

Stocks keep losing streak for fifth week

DSEX slumps 470 points in five straight weeks

| Updated: March 26, 2018 10:27:03

Weekly analysis: Stocks keep losing streak for fifth week

Stocks witnessed yet another bearish week, extending the losing streak for the fifth consecutive week that ended Thursday as shaky investors continued their selling spree amid persistent liquidity crisis.

Dealers said the market extended the losses as retail investors were reluctant to make fresh investment while the institutional investors could not support the market more due to ongoing liquidity crisis.

"Investors remained cautious as the looming liquidity crisis coupled with uncertainty over the Dhaka bourse's share sales to strategic partner continues," said an analyst at a leading brokerage firm.

Index closed flat on the first session of the week. The following three sessions saw continuous index fall with an erosion of 150 points.

Finally, the last trading day saw a slight 8 points gain.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 140 points or 2.45 per cent to settle at 5,580.

In the past five consecutive weeks, DSEX lost an aggregate 470 points or 7.85 per cent.

Two other indices of the premier bourse also drifted lower. The DS30 index, comprising blue chips, fell 34 points to finish at 2,082 and DSES (Shariah) index shed 27 points to settle at 1,322.

The port city bourse Chittagong Stock Exchange (CSE) also ended lower with CSE All Share Price Index - CASPI - shedding 416 points to settle at 17,239 points and Selective Categories Index - CSCX -falling 247 points to end at 10,414.

Turnover, the crucial indicator of the market, stood at Tk 17.69 billion which was Tk 13.80 billion in the week before.

The turnover averaged Tk 3.54 billion, which was more than 28 per cent higher than the previous week's average of Tk 2.76 billion.

The heavyweight banking sector dominated the turnover chart, capturing 17 per cent of the week's total turnover, followed by engineering with 13 per cent and textile 12 per cent.

According to LankaBangla Securities, although transaction saw some improvements, overall market turnover levels are still low compared to historical trend.

"When news broke that some favourable adjustments would be made to the banks' capital market exposure regulations, markets rallied in the last two hours of the closing session of the week," the stockbroker said.

For most of the week, financial stocks again took the largest hit during the index slide.

All the major market sectors gave negative returns with non-bank financial institutions and banking losing the most with 5.30 per cent and 3.23 per cent losses respectively.

From the start of the year, index has been on the downward direction, with some periodic upward movement which failed to sustain. During the fall, index has lost 800 points, losing 12.5 per cent from the peak, it said.

International Leasing Securities, said, the investors opted to liquidate their holdings in financial institution, bank, textile, engineering, food, fuel & power, cement and pharmaceutical sectors throughout the week in anticipation of further fall.

The market capitalisation of the DSE also fell 2.08 per cent as it was Tk 4,008 billion on opening day of the week while it came down to Tk 3,924 billion on Thursday.

The losers took a strong lead over the gainers as out of 340 issues traded, 269 closed lower, 52 lower and 19 remained unchanged on the DSE floor.

The newly-listed Queen South Textile dominated the turnover chart with 10.88 million shares worth nearly Tk 391 million changing hands, followed by Square Pharmaceuticals with Tk 356 million, Wata Chemicals Tk 355 million, Monno Ceramic Tk 329 million and IFAD Autos Tk 319 million.

Wata Chemicals was the week's best performer, posting a gain of 16.67 per cent while United Finance was the week's worst loser, slumped by 12.75 per cent.

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