Junk shares rule market amid volatility

Snapping the three weeks of loss, stocks rebounded this week, as investors were seen taking fresh bets towards selective issues in hope of quick gains.

But, due to prevailing macroeconomic uncertainties, investors were still reluctant to take long-term positions in equities, rather they preferred to book profits, leading the market to experience volatility throughout the week.

However, rumor-based low-performing stocks dominated the capital market throughout the week, while blue-chip stocks have been facing very dismal responses from investors.

The DSEX, the broad index of the Dhaka Stock Exchange (DSE), gained 7.4 points or 0.1 per cent to settle at 6,214.

The average turnover of the DSE increased by 41.2 per cent to Tk 578 crore this week than the average tally of Tk 409 crore in the previous week.

Shares of many small-cap companies reined in the DSE, the country’s prime bourse in the week, while stocks of most large-cap firms remained stuck at their floor prices.

Analysts and stock market insiders said this is not a good sign for the country’s stock market.

Recently, many investors were seen rushing towards rumor-based junk stocks, which helped many small-cap issues top the gainers board, market insiders said.

Some people spread rumours that some big investors were pouring big funds into these companies so their prices continued to rise, they said.

However, share prices of most large companies with billion-dollar market capitalisations remained stuck at their floor prices.

Even, Grameenphone, Walton Hi-Tech Industries, British American Tobacco Bangladesh (BATBC), Square Pharmaceuticals, Robi Axiata, and Renata Ltd were seen hitting to their floor prices.

The market performed five sessions this week, with the DSE starting the week with 0.18 per cent gain on Sunday.

It, however, turned negative on Monday and remained the same on Tuesday.

The market again reverted to positive on Wednesday with a gain of 0.02 per cent, and the DSE closed the week on Thursday with a positive return of 0.05 per cent.

Investors were mostly active in the IT sector, as the sector contributed 21.3 per cent of the DSE turnover in the week, followed by the food (12.4 per cent) and the miscellaneous sector (8.9 per cent).

Gemini Sea Food Ltd topped the week’s gainer list with a return of 35.33 per cent, while Unilever Consumer Care Limited was the week’s worst sufferer with a loss of 36 per cent.

Most sectors ended in green this week, with the jute sector posted the highest gain of 9.8 per cent, while the travel sector faced the highest correction of 4.0 per cent.

Financial sectors posted mixed performance this week, with the bank booking the highest gain of 0.50 per cent, followed by general insurance (0.08 per cent), and NBFI (0.01 per cent).

On the other hand, the life insurance experienced the highest loss of 0.29 per cent, followed by mutual fund.