Stocks extend losses for third straight week

Stocks saw yet another bearish week, extending the losing streak for the third straight week, as investors remained mostly inactive to make fresh investment in stocks.

Analysts said the bearish trend exacerbated as retail investors were reluctant to make fresh investment while the institutional investors could not support the market more due to persistent liquidity crisis.

"The ongoing liquidity problem in the banking sector pushed banks' deposit interest rate high and lured many investors to put money in banks instead of investing in capital market which was taking a toll on the market turnover," said an analyst at a leading brokerage firm.

The interest rate on term deposits has reached double digit after about a couple of years as the banks are now out of comfort zone, as far as their liquidity position is concerned.

He noted that ambiguity over the Dhaka bourse's share sales to strategic partner and concerns over the ongoing liquidity crunch eroded investors' confidence to a great extent.

The securities regulator, which has been against the selection of the Chinese consortium from the very beginning, extended the deadline by three months for signing share sale agreement of the premier bourse Thursday.

Although three of the five trading days ended in positive, the losses of the two trading days ending in red far outweighed the gains.

Week-on-week, DSEX, the prime index of the main stock exchange, went down by 42.85 points or 0.73 per cent to settle at 5,828.

City Bank Capital Resources in an analysis noted that in the last session of the week turnover hit the lowest level in more than 20 months as investors were mostly inactive amid the persistent liquidity shortage.

The DS30 index, comprising blue chips, also fell 25 points to finish at 2,144. However, The DSES (Shariah) index saw a fractional gain of 0.56 points to settle at 1,373.

The port city bourse Chittagong Stock Exchange (CSE) also ended lower with the CSE All Share Price Index - CASPI - losing 79 points to settle at 18,000 and Selective Categories Index - CSCX -falling 44 points to finish at 10,867.

Total turnover, the crucial indicator of the market, stood at Tk 18.59 billion against Tk 18.68 billion in the week before.

The average turnover of the week almost remained the same as the investors were reluctant to take fresh position in recent downbeat market.

The daily turnover averaged Tk 3.72 billion, which was 0.45 per cent lower than the previous week's average of Tk 3.73 billion.

Block trade contributed 3.40 per cent to the week's total turnover, where stocks like Square Pharma, Grameenphone, DBH, Phoenix Finance and Brac Bank dominated the block trade board.

According to International Leasing Securities, the stock market continued its downbeat trend amid ongoing liquidity crisis and ambiguity over the DSE's share sales to a strategic partner.

The small investors remained cautious about fresh exposure to the market, while institutional investors mostly followed "go slow" approach in ongoing year-end dividend declaration of the December ending companies, said the stockbroker.

The pharmaceuticals sector dominated the turnover chart, capturing 17 per cent of the week's total turnover, followed by engineering with 15 per cent and banking 13 per cent.

Three listed companies - BATBC, Delta Brac Housing Finance Corporation and Nitol Insurance Company - and one mutual fund -Vanguard AML Rupali Bank Balanced Fund recommended dividend last week.

The market capitalisation of the DSE also fell 0.37 per cent as it was Tk 4,078 billion on opening day of the week while it stood at Tk 4,063 billion on Thursday.

The gainers took a modest lead over the losers as out of 339 issues traded, 154 nudged higher, 149 ended lower and 36 remained unchanged on the DSE floor.

Monno Ceramic Industries topped the week's turnover chart with 3.76 million shares worth nearly Tk 564 million changing hands, followed by National Tubes with Tk 426 million, IBN Sina Tk 399 million, IFAD Autos Tk 396 million and Nahee Aluminum Tk 3345 million.

Oimex Electrode was the week's best performer, posting a gain of 12.03 per cent while NCC Bank Mutual Fund-1 was the week's worst loser, losing 12.90 per cent.

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