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weekly stock market review: Stocks fall on political tensions

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Stocks went down with the turnover hitting on the Dhaka Stock Exchange (DSE) a seven-week low last week, as looming political uncertainty and the unrest in the RMG sector put a dumper on the market.

Unrest in RMG sector, fear of political turmoil, suspension of trading of a few stocks and lack of future market directions prompted the investors to book quick profit, analysts observed.

The week witnessed five trading sessions as usual and lost three sessions, while two sessions saw marginal gain.

Week-on-week, the prime index of the Dhaka Stock Exchange — DSEX went down by 84.33 points or 2.06 per cent to close the week at 4,013.38. The DS30 Index, comprising blue chips, also lost 48.12 points or 3.18 per cent to close at 1,464.31.

The Chittagong Stock Exchange (CSE) also ended lower with its Selective Category Index losing 144.7 points or 1.81 per cent to close at 7,838.42.

The trading activities at the DSE remained sluggish as the total turnover value for the week stood at Tk 20.32 billion compared to previous week’s total turnover value of Tk 28.81 billion.

The daily average turnover value came down to Tk 4.06 billion, registering a 29.47 per cent decline over the previous week’s average of Tk 5.76 billion.

“Political uncertainty, unrest in RMG sector and investors’ mentality mostly contributed to generating quick return ahead of Eid-ul-Azha in this week’s market sentiment,” commented IDLC Investments in its weekly market analysis.

In the meantime, investors’ pursuance of meticulous polity over dimmed capital market scenario put market situation in an indecisive mood, said the merchant bank.

Additionally, the investor’s sector-wise as well as scrip-wise focus intended market scenario to remain volatile throughout the week, the merchant bank added.

“The market opened in negative zone in most of the trading sessions following weeklong sell-off amid the dispute airing around the coming election among the political parties,” stated LankaBangla Securities in its weekly market commentary.

“Some buying pressure had been initiated that spurred a short-term rally in Small and Mid cap stocks, but its full flavour couldn’t sustain till the end of the week on shaky market confidence and regulatory interruptions in trading of few stocks,” said the stock broker.

Large Cap stocks were not in the hot list of investors in this week and got corrected with the broad index, it said.

“Potential political unrest and uncertainty in banking and RMG sector worked as negative catalysts in market sentiment,” said the stock broker.

Turnover of this week reached the seven-week low, indicating this short-term downtrend may run out of stream soon, the stock broker added.

“The volatility of the market only reflects that the market is still confused giving no clear indication of the future scenario,” stated Zenith Investments.

However, if the volume increases simultaneously with the index, the investors may be encouraged to shift their targets towards mid cap scrip, said the Zenith analysis.

The losers took a marginal lead over the gainers as out of 298 issues traded during the week, 170 declined, 115 advanced and 13 remained unchanged on the DSE.

All the major sectors ended in red in the week. NBFI was the biggest loser as it went down by 6.21 per cent. It was followed by telecommunications 3.88 per cent, fuel and power 3.56 per cent and pharmaceuticals 3.21 per cent respectively. All three posted hefty losses during the week.

Banks remained dormant with no significant movement in the week with 0.63 per cent loss.

The market capitalisation of the DSE went down by 1.87 per cent, as it was Tk 2,606.12 billion at the opening day and at the end week it stood at Tk 2,557.31 billion.

Three listed companies — Quasem Drycell, BEDL and First BSRS Mutual Fund — made corporate declarations during the week. Quasem Drycell declared 10 per cent bonus dividend, BEDL recommended 10 per cent cash and 5 per cent bonus respectively, while First BSRS Mutual Fund recommended 110 per cent cash dividend.

CMC Kamal became the week’s top turnover leader with shares worth Tk 714.38 million changing hands followed by BSCCL, Tallu Spinning, Generation Next Fashion and United Airways.

Rahima Food was the week’s top gainer, posting a rise of 50.16 per cent, while Modern Dyeing and Screen Printing was the week’s worst losers, slumping by 26.81 per cent following the news that the company’s production was suspended since 31 January, 2010.

Babul Barman/http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDlfMjhfMTNfMV84OV8xODUwNDA=

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