Dhaka stocks witness price correction

DSEX, the key index of the Dhaka Stock Exchange (DSE), experienced a marginal correction, snapping a three-week winning streak as investors rebalanced their portfolios in response to earnings disclosures of the listed companies for the latest quarter.

The key index lost only 1.52 points to close the week at 6,294.73 points. The blue-chip index--DS30--gained 0.03 points and stood at 2,230.73 points while the Shariah-based index--DSES--lost 0.58 points and stood at 1,373.96 points.

In the week, average turnover dropped by 6.91 per cent to Tk 568 crore. The IT sector dominated the turnover chart, covering 20.99 per cent of the total turnover.

EBL Securities in the weekly market commentary said investors opted for profit-booking as the majority of the listed companies showed dismal earnings in the latest quarter due mainly to the prevailing macroeconomic challenges, leading the core index to lose 29.2 points in the first three sessions of the week.

However, investors showed their buying interest in sector-specific issues whose performance was not affected by recent macroeconomic adversities and provided a modest recovery to the market in the last two sessions of the week, it added.

The market witnessed five sessions during this week. The session started on a negative note with the index dropping by 0.13 per cent on Sunday. It also remained negative by 0.15 per cent on Monday and 0.19 per cent on Tuesday. But it turned positive 0.16 per cent on Wednesday. Finally, the market closed on a positive note with a 0.28 per cent rise in its index on Thursday.

Most of the financial sectors registered negative performance this week. Life Insurance experienced the highest loss of 2.58 per cent, followed by General Insurance 1.94 per cent, NBFI 0.19 per cent, Mutual Fund 0.11 per cent, and Bank 0.19 per cent.

Non-financial sectors posted mixed performance this week. Food and Allied sectors booked the highest gain of 1.03 per cent, followed by Fuel and Power 0.25 per cent. Pharmaceutical experienced the highest loss of 0.33 per cent, followed by Engineering 0.08 per cent.

UCB Stock Brokerage in its weekly market review said Services & Real Estate, Ceramics and Food & Allied sectors closed positive this week while Paper & Printing, Life Insurance and General Insurance sector faced correction.

Out of the 400 issues traded, 53 advanced, 124 declined, and 208 remained unchanged on the Dhaka bourse for the week.

Olympic Industries was the week’s top gainer, soaring 14 per cent while aamra Technologies was the week’s worst loser, shedding 10.37 per cent.

Besides, more than 100 publicly-traded companies from the manufacturing and service sectors fear heavy losses following the government announcement about a hike in retail gas prices for industries, power plants and commercial establishments.

The government recently hiked retail gas prices by 14.5 per cent to 179 per cent which came into force in February.

Out of the listed companies, at least 130 companies belong to the manufacturing sector, such as RMG, cement, ceramics, engineering, and tannery while nine other companies come from the real estate and the service sectors, according to the Dhaka Stock Exchange (DSE) data.

While talking to The Business Post, industrialists said this was not right time to increase gas prices. The government hiked gas and electricity prices at a time when we are facing severe shortage. It is a suicidal decision, they added.

“Many factories do not have work orders since February or March last year due to the ongoing global economic crisis caused by Russia-Ukraine war. But the government has hiked gas and electricity prices at this crucial time, which would push up the production cost manifold.”

“If the production costs rise, the number of work orders would also dwindle further. We would think about our next steps to do after discussing the matter with other industrialists,” one of industry owners told The Business Post preferring anonymity.

The port city’s stock exchange, the Chittagong Stock Exchange (CSE), rose this week. CSCX rose by 0.09 per cent to 18583.23 points. Out of the 264 issues traded, 44 advanced, 91 declined, and 129 remained unchanged on the CSE for the week.