Stocks break two-week losing streak

Stocks returned to the green last week - snapping a two-week losing spell as optimistic investors took position on some large-cap stocks during the later part of the week that ended on Thursday.

Analysts said the market bounced back after two weeks as it seems that the investors started taking position after declarations of earnings amid some speculation.

"With the closing of earnings season, investors showed optimism and appeared to focus on the market fundamentals. Positive sentiment was also generated by significant rise in foreign funds in the stocks," said an analyst at a leading brokerage firm.

In the first ten months of the current calendar year, net foreign investment in the capital market jumped more than nine times year-on-year.

Consequently, the enthusiastic investors were active on sector specific stocks, especially on non-bank financial institutions, cement and food and allied and bank stocks, helping the market close higher, he said.

The week witnessed five trading sessions as usual. Of them, first two sessions saw correction while the last three closed higher.

Weak-on-week, the benchmark index of the Dhaka Stock Exchange (DSE) went up by 36.64 points or 0.79 per cent to close at 4,672.88.

The two other indices also finished marginally higher. The DS30 index, comprising the blue chips, advanced 6.33 points or 0.36 per cent to settle at 1,757.77 while the DSE Shariah Index rose 8.25 points or 0.74 per cent to close at 1,118.05.

The port city bourse - Chittagong Stock Exchange (CSE) - also ended marginally higher with its Selective Categories Index, CSCX, gaining 49.10 points or 0.57 per cent to end at 8,724.46.

The total turnover for the week stood at Tk 21.84 billion which was nearly 28 per cent lower than the previous week`s Tk 30.19 billion.

The daily turnover averaged at Tk 4.37 billion - registering a decline of 28 per cent over the previous week`s average of Tk 6.04 billion.

Fuel and power sector emerged as the turnover leader, capturing 16 per cent of the week`s total turnover value driven by stronger trade value in Doreen Power and MJL Bangladesh, closely followed by engineering and textile, grabbing 15 per cent and 12 per cent respectively.

"The week observed an effort to recover from recent bearish streak in the market," said International Leasing Securities, a stockbroker, in its weekly market analysis.

The stockbroker observed that notable price correction in recent period lured the bargain hunters for taking fresh position, upon which investors replied positively in the last three sessions.

Another stockbroker LankaBangla Securities said, "The market returned to green and made a quick gain on the heel of price appreciation in large-cap stocks."

"The investors might have positively reacted to the Finance Minister`s comments on the capital market that he was expecting a `vibrant` capital market in the next two years," it said.

The stockbroker noted that the list of turnover leaders continued to be dominated by power sector stocks. Besides, the lists of top gainers and top losers were largely comprised of small cap stocks.

Merchant bank IDLC Investments said, "Following the downbeat momentum of the previous two weeks, the market started last week with a correction."

"Investors` short-term trading behaviour and profit-booking tendency put additional challenge to overall market movements. However, the bourse turned back to gaining momentum in the final three sessions of the week. Consequently, the week ended on a positive note," said the merchant bank.

The gainers took a strong lead over the losers as out of 328 issues traded, 175 closed higher, 125 closed lower and 28 remained unchanged on the DSE trading floor during the last week.

The total market capitalisation of the DSE also rose 0.67 per cent during the period. It was Tk 3,260.09 billion on the opening day of the week and stood at Tk 3,281.81 billion on closing day of the week.

A total of 57 listed companies recommended dividends last week while eight companies did not recommended any dividend at all.

Doreen Power Generations and Systems dominated the week`s turnover chart with shares worth Tk 1.12 billion changing hands, followed by MJL Bangladesh with Tk 578 million, Lafarge Surma Cement Tk 531 million, Brac Bank Tk 456 million and Fortune Shoes Tk 443 million.

The Peninsula Chittagong was the week`s best performer posting a 23.70 per cent rise while Legacy Footwear was the worst loser slumping by 37.37 per cent following its no dividend declaration.