Stocks recover some losses in past week hit by volatility

Amid the uncertainty triggered by political unrest and contradictory stance of two regulators, the Dhaka Stock Exchange (DSE) managed to recoup some losses amid extreme volatility in the past week.

The benchmark DSEX index opened the week pessimistically but ended up on a positive note thanks to the last two sessions’ bull-run. In the first three sessions, the DSEX shed 170 points and bounced back strongly to add 233 points in the last two sessions.

As a result, the index snapped the previous week’s losing streak and advanced 1.2 per cent or 84 points to settle at 6,936 points. It declined 239 points or 3.38 per cent in the previous week.

Several issues, including student protests and contradictory stance of Bangladesh Bank (BB) and Bangladesh Securities and Exchange Commission (BSEC), made investors confused, which dragged the indices down in the first trading sessions. 

However, the investors’ trust increased to some extent thanks to Tuesday's meeting between the two regulators, said a brokerage firm.

“Although the index was being pulled downwards in the first three sessions, it has extraordinarily turned around in the last two sessions as several high level meetings between policymakers have been conducted and more such meetings are expected to occur to find ways to resolve the tussles between BSEC and BB,” said EBL Securities in its weekly review.

Another brokerage firm International Leasing Securities echoed the remark and said investors were highly moved by the meeting that took place on Tuesday between two regulatory bodies Bangladesh Bank and Bangladesh Securities and Exchange commission.

In the meeting, the two regulators reportedly agreed upon some prudent measures to boost up the stocks which motivated the investors to make new investments in the sector specific lucrative stocks.

However Bangladesh Bank denied the meeting decision’s statement given by BSEC, triggering a conflict.

Meanwhile, the BSEC chairman met Prime Minister Sheikh Hasina and later told the media that she has been apprised of the recent developments.

Again, the finance ministry set up a meeting on December 7, with the Bangladesh Bank and BSEC.

Investors hope that the existing issues will be settled in the upcoming meeting of the regulators.

The meeting news revived the investors' enthusiasm to stay active in the market, it added.

At the DSE, two other indices also ended the week in green as the DSES and DS30 added 16.5 points and 33.1 points respectively to their previous week’s indices.

During last week, the port city bourse, CSE30, CSCX and CASPI added 240.9 points, 120.2 points and 196.7 points respectively over previous week.

However, the average market turnover plunged 20.08 per cent from Tk 1,261 crore to Tk 1,008 crore in the last week. 

Investors were mostly active in bank (28.9 per cent), pharmaceuticals and chemicals (13.4 per cent) and miscellaneous (12.7 per cent) sectors.

Most sectors witnessed positive performance out of which fuel and power (4.5 per cent), financial institution (4.4 per cent) and paper (3.0 per cent) witnessed positive performance this week and IT (-1.9 per cent), general insurance (-1.4 per cent) and tannery (-0.6 per cent) witnessed the most correction.

Acme Pesticides, a newly listed company in the capital market, was top gainer in DSE last week. Its share price increased 269 per cent to Tk36.9, while Aramit Cement was the top loser and its share price declined 21.2 per cent to Tk30.1

Square Pharma was the week’s index puller and as it contributed 8.3 points to the key index.

On the other hand, Beximco Pharma was the index dragger and contributed to fall 5.7 points of DSEX.