Stocks slip into red amid flurry of earnings results

The benchmark index of the Dhaka Stock Exchange (DSE) slipped into the red this week, reversing a single-week of gains, as risk-averse investors largely stayed on the sidelines amid the ongoing earnings disclosures.

Market analysts noted that investors appeared cautious, adopting a 'wait-and-see' approach as regulatory uncertainties surrounding leveraged trading and concerns over a potential slowdown in business activity ahead of anticipated political transition weighed on overall market sentiment.

The index saw selling pressure in the early part of the week, as investors responded to the political and regulatory uncertainties that have been prevalent in recent months.

However, the market managed to recover some of its losses towards the latter part of the week, driven by month-end buying pressure and a wave of corporate earnings and dividend declarations.

Some investors, meanwhile, reshuffled their portfolios amid flurry of corporate earnings and dividend declarations.

More than 100 listed companies released their quarterly and annual financial results during the week, with the majority reporting earnings growth and higher-than-expected dividend payouts.

This week, the first three trading sessions ended lower while the remaining two managed to close higher, enabling the benchmark index to partially recover from its initial losses.

The DSEX, the prime index of Dhaka Stock Exchange, finally settled the week 28 points, or 0.54 per cent, lower at 5,122, after recovering 30 points in the week before.

EBL Securities, in its market analysis, said that stocks struggled to sustain its recovery momentum as investors engaged in stock-wise portfolio reallocation based on the latest earnings and dividend announcements amid a broadly cautious market sentiment.

However, buying interest in stocks with favourable earnings and dividend declarations enticed investor participation and recovered partially, said the stockbroker.

The blue-chip DS30 index, a group of 30 prominent companies, also lost 10 points to close at 1,988 while the DSES index, which represents Shariah-based companies, shed 6 points to 1,083.

Despite impressive earnings disclosures of some blue-chip companies, BRAC Bank, Prime Bank, Walton, Square Pharma, and Premier Bank saw price erosion, dragging the prime index down. Price fall of these five stocks jointly accounted for a 25-point fall in the index.

BRAC Bank posted the highest-ever quarterly profit of Tk 6.30 billion in the July-September quarter. Despite the record earnings, the bank's stock declined 4.22 per cent during the week, contributing to a 12-point fall of the key index.

Prime Bank, another blue chip stock, posted 36 per cent year-on-year growth in profit to Tk 6.72 billion in nine months through September this year. Yet, its stock dropped 5.4 per cent, accounting for more than 4-point fall of the index.

Market liquidity continued to remain subdued despite the total turnover rising slightly to Tk 22.87 billion as against Tk 21.39 billion in the week before.

Accordingly, the average daily turnover stood at Tk 4.57 billion, up 7 per cent from the previous week's average turnover of Tk 4.28 billion.

Investors were mostly active in the pharma sector, which accounted for 12 per cent of the week's total turnover, followed by engineering (11.4 per cent) and banking sector (7 per cent).

Losers outnumbered the gainers, as out of 392 issues traded, 179 saw price correction while 177 others gained and 36 issues remained unchanged on the DSE floor.

Most of the major sectors showed negative performance. Banking sector witnessed the highest loss of 2 per cent, followed by non-bank financial institutions, telecom, power and engineering sectors.

Orion Infusions became the most-traded stocks, with shares worth Tk 1.20 billion changing hands, closely followed by Khan Brothers PP Woven Bag Industries, BRAC Bank, Dominage Steel Building Systems and Robi Axiata.

The Chittagong Stock Exchange also closed in the red, with its All Shares Price Index (CASPI) shedding 127 points to close at 14,286, while the Selective Categories Index (CSCX) lost 69 points to 8,813.

The port city bourse traded 12.74 million shares and mutual fund units with turnover value of Tk 982 million.

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