Market to open after a bearish week

The stock market wrapped up last week with losses as panic-driven investors kept on putting sell pressure on the stocks because of the coronavirus cases in Bangladesh. 

DSEX, the key index of the Dhaka Stock Exchange, dropped 255 points or 5.8 percent during the week to close at 4,130. 

CASPI, the benchmark index of the Chittagong Stock Exchange, lost 761 points or 5.7 percent over the week to close at 13,404.

According to the weekly market review of EBL Securities Ltd, frightened investors have lost trust in the market because of the coronavirus outbreak, which caused further disruption for companies and the global economy that has impacted the country's bourses and the world's leading stock markets.

The market witnessed three negative sessions and two positive sessions during the week. 

On March 8, the market faced a negative session because of panic sell-offs after the Asian Development Bank's (ADB) warning that Bangladesh would lose 1.1 percent or $3.02 billion of economic output to the Covid-19 outbreak. Furthermore, the 1.8 percent decline in exports, according to the Export Promotion Bureau (EPB) data, also contributed to the weakening of investor confidence. 

In the following session, DSEX, the main index of the Dhaka bourse experienced a record level plunge of 279 points or 6.5 percent after the news of three confirmed cases of novel coronavirus in Bangladesh. The country's stock market was already under stress due to several macroeconomic factors, and on top of that, the virus came into play to worsen the situation. 

On March 10, however, the market bounced back with the DSEX gaining 148 points or 3.7 percent as investors seized the opportunity to invest in sector-specific shares that hit a lucrative level in the previous day's overcorrection. 

The market also posted gains in the following session after three banks ─ United Commercial Bank, Shahjalal Islami Bank and state-owned Sonali Bank ─ announced the formation of special funds to support the stock market.

However, the market could not hold on to its two-session gains on Thursday, as most of the investors were active on the selling fence, and liquidated their holdings on the ongoing market movement. Moreover, macroeconomic factors such as lowering credit and deposit growth in the private sector, expected inflation, and rising public debt from the banking sector also led the market to the downward turn. 

Trading remained low during the week, and the average turnover stood at Tk417.7 crore, 13.4 percent down from the previous week's Tk482.2 crore.

In the weekly average turnover distribution, the pharmaceuticals sector contributed the highest, 22.2 percent, to turnover, followed by engineering adding 14.3 percent and textiles adding 12 percent. 

All the sectors posted weekly losses with textiles exhibiting the highest price correction of 12.1 percent, and travel sector facing the least correction of 1.5 percent.

Among the large-cap sectors, telecom lost 6.2 percent, banks lost 5.8 percent, financial institutions gave up 5.3 percent and pharmaceuticals slid 2.4 percent in the weekly sector return board. 

Square Pharmaceuticals Ltd was the most traded stock of the week with a closing price of Tk179.8 per share. Its weekly turnover was Tk63.3 crore, according to the DSE website.

Kohinoor Chemicals Company Bangladesh Ltd topped the weekly gainers' table by gaining 22.8 percent, closing at Tk517.4 per share. Central Pharmaceuticals Ltd, on the other hand, was the week's worst loser by dropping 21.6 percent and closing at Tk13.1 per share.