Weekly market review: Stocks rebound after single-week break

DSE market-cap exceeds Tk 4000b-mark after 15 months



October 03, 2020 10:40:48



Stocks rebounded in the outgoing week, after a single-week break, as the investors went on bargain hunting for selective large-cap issues with high expectations.

Week-on-week, DSEX, the prime index of the Dhaka Stock Exchange (DSE), went up by 16.54 points or 0.33 per cent to settle at 4,995, after losing 126 points in the previous week.

The market capitalisation of the DSE also exceeded Tk 4,000 billion-mark last week after 15 months since June 27, 2019 to reach Tk 4,034 billion on Thursday, riding on the newly-listed Walton Hi-Tech Industries.

Within a week of its debut at the stock market, Walton has emerged as the second largest listed company in terms of market-cap after Grameenphone.

The Walton’s market-cap jumped to Tk 229.35 billion on Thursday from Tk 114.50 billion on September 23, its first trading day on the country’s bourses.

The local electronics giant’s share closed at Tk 813.80 on Thursday, registering an increase of 223 per cent or Tk 561.80 each within seven trading days from its issue price of Tk 252.

The ‘irrational hype’ of investors and extremely low float of shares (only 0.97 per cent) made Walton such a hotcake in the bourses that almost no investor inquired about the price of the stock during its first seven trading days, said a leading broker.

Market analysts said investors went on buying binge on major sectors stocks during the week, buoyed by the regulatory moves and interest rate cut on stock investment fund.

The securities regulator has further revised the margin loan limit announced recently based on the movement of the broad index of DSE which will come into effect from January 1, 2021.

Bangladesh Bank has reduced the interest rate on borrowing from its special investment fund to 4.75 per cent from 5.0 per cent, aiming to help the country’s lenders increase their stock investment capacity.

The upward movement of the index was mainly driven by the smart investors’ buying spree on mutual fund, financial institutions and banking sector issues, commented International Leasing Securities.

The stockbroker noted that the investors preferred bank sector stocks riding on the news that interest rate spread in the banking system increased slightly in August 2020 as banks further slashed rates on deposits but charged a little bit higher on lending.

The week featured five trading days as usual. Of them, three sessions faced correction while two edged marginally higher.

The two other indices also edged higher. The DSE 30 Index comprising blue chips advanced 9.52 points to finish at 1,710 and the DSE Shariah Index (DSES) also saw a fractional gain of 0.31 point to finish at 1,126.

The total turnover, a crucial indicator of the market, stood at Tk 45.54 billion which was Tk 45.73 billion in the week before.

The daily turnover averaged Tk 9.11 billion last week which was Tk 9.15 billion in the previous week, falling 0.41 per cent.

With hope of upcoming reforms, investors have taken interest in mutual funds and this sector has achieved significant gain during the week, according to EBL Securities.

Mutual Fund sector posted a 12 per cent gain, followed by financial institutions with 4.30 per cent, banking 1.10 per cent, power 0.90 per cent and pharma 0.50 per cent.

On the other hand, cement, telecom and food sectors lost 3.30 per cent, 1.20 per cent and 0.40 per cent respectively.

Losers, however, outnumbered the gainers, as out of 359 issues traded, 192 closed lower, 148 ended higher while 19 issues remained unchanged on the DSE floor.

The market capitalisation of the DSE jumped 2.22 per cent week-on-week to Tk 4,034 billion on Thursday, riding on Walton Hi-Tech.

Beximco Pharma continued to dominate the weekly turnover chart with 15.22 million shares worth Tk 1.80 billion changing hands, followed by Beximco, Sandhani Life Insurance, Paramount Textile and Brac Bank.

The newly-listed Walton Hi-Tech was the week’s highest gainer, posting a 43.53 per cent gain while Tung Hai Knitting was the week’s worst loser, losing 14.29 per cent.

The Chittagong Stock Exchange (CSE) also rebounded with the CSE All Share Price Index – CASPI -gaining 78 points to settle at 14,287 and the Selective Categories Index – CSCX advancing 52 points to close at 8,575.

Of the issues traded, 152 declined, 133 advanced and 32 remained unchanged on the CSE.

The port city’s bourse traded 84.49 million shares and mutual fund units with turnover value of Tk 2.17 billion during the week.



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