Stocks close higher for fourth consecutive week

Defying all the uncertainties and negative rumours that had triggered temporary selloffs, Dhaka and Chattogram stocks closed higher for the fourth consecutive week as investors preferred not to miss the opportunities for some capital gains during the market recovery.

DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), having a volatile week, closed at 6,560 points on Thursday, which was 0.79% higher than the previous week's close.

Thanks to the turnaround in large-cap scrips which contributed much to the indices' upsurge.

Unlike the previous four-five weeks when medium and smaller cap scrips led the gainers' table, large-cap and blue chip stocks took over the market helm last week, when investors booked profits from most of the mid and small-cap scripts.

According to the DSE weekly market report, blue chip index DS30 and Shariah-compliant securities' index DSES that were underperforming the broad index previously, significantly outperformed in the last week.

DS30 increased by 3.06% last week, while DSES gained 2.28%. The 30 blue-chip companies' share in the total market capitalisation inched up to 42.75% from 42.25% a week ago.

As the volatility kept some investors on the side-lines, the average daily turnover on the DSE declined by 4.45% to Tk1,818 crore, while the dominance of large-cap stocks and big investors helped offset the negative impact of the total number of trades and trading volume by 15% and 25%, respectively.

The macroeconomic situation might have already come through its short-term worst and the existing price floor will not allow the free fall of stocks – the two beliefs together inspired investors to pour funds into oversold stocks in recent weeks, analysts said.

Of the sectors, pharmaceuticals, miscellaneous and engineering contributed a maximum of 18.5%, 14.6% and 11.8% to the weekly turnover in the country's premier bourse.

Jute, pharmaceuticals, cement, miscellaneous, travel-leisure and mutual funds generated positive returns last week, while service and real estate, paper, financial institutions, general insurance, textile, life insurance, ceramic, IT, engineering, fuel-power, bank, food, telecommunication and tannery stocks suffered price corrections. 

Only 68 scrips on the DSE advanced last week, against a decline of 265 while 54 remained unchanged and eight scrips had no trade.