Weekly analysis: Stocks extend losses amid poor earnings disclosure

Stocks posted marginal correction last week, extending the losing streak for the third straight week, amid poor earning disclosures by a number of companies.

Market operators said earnings and dividend declarations of some companies during the week failed to meet investors' expectation, prompting them to sell shares.

A section of investors also followed 'wait-and-see' approach during the week, eyeing on the dialogue between ruling Awami League-led 14-party alliance and opposition coalition Jatiya Oikyafront held on Thursday.

The week featured five trading days as usual. Of them, three sessions lost more than 111 points while two sessions recovered 87 points.

Week-on-week, the DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down nearly 24 points or 0.45 per cent to settle the week at 5,258.

"The downward shift in the index is mainly driven by significant negative changes in some of the large-cap sectors like power, banking, food and engineering," commented LankaBangla Securities.

Two other indices also drifted lower. The DS30 index, comprising blue chips, fell 10.70 points to close at 1,865 and the DSE Shariah Index lost 7.74 points to end at 1,216.

Trading activities, however, increased to Tk 24.12 billion on the DSE which was Tk 20.47 billion in the week before.

The daily turnover averaged Tk 4.82 billion, registering an increase of 18 per cent over the previous week's average of Tk 4.09 billion.

According to International Leasing Securities, the wobbly investors persisted their sell offs due to portfolio reshuffle amid ongoing quarter-end earning disclosures and year-end dividend declarations.

The stockbroker noted that the news that the state-run Investment Corporation of Bangladesh (ICB) and the DSE shareholders are set to go for fresh investment failed to revive the investors' sentiment.

"Selling of shares mostly from banking, power, engineering and telecom sectors contributed to the plunge in indices," said the stockbroker.

The textile sector dominated the week's turnover chart, grabbing 19 per cent of the week's total turnover. It was followed by the power sector with 14 per cent and pharmaceuticals 13 per cent.

The market capitalisation of the DSE also fell 0.36 per cent to Tk 3,831 billion, from Tk 3,845 billion in the week before.

Among the major sectors, power witnessed the highest correction of 2.40 per cent, followed by banking with 1.35 per cent, food 0.79 per cent, engineering 0.67 per cent and telecommunication 0.54 per cent.

The pharmaceuticals sector posted the highest gain of 1.28 per cent followed by financial institutions with 0.60 per cent.

Of the 346 traded issues, 263 closed higher, 157 ended lower and 26 issues remained unchanged on the DSE floor last week.

Khulna Power Company continued to top the week's turnover chart with 12.78 million shares worth Tk 1.54 billion changing hands.

The other turnover leaders were Shahjalal Islami Bank with Tk 615 million, Monno Ceramic Industries Tk 613 million, Nurani Dyeing Tk 553 million and Intech Tk 542 million.

Saiham Cotton was the week's best performer, posting a gain of 42 per cent while GBB Power was the worst loser, losing 30 per cent following its no dividend declaration.

The port city's bourse, Chittagong Stock Exchange (CSE), also ended lower with its CSE All Share Price Index - CASPI -shedding 86 points to settle at 16,161.

The Selective Categories Index - CSCX - also lost 48 points to close the week at 9,795.

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