Stocks correct amid month-low turnover
Investors turned conservative due to the recent moves by the central bank
Stock indices at both the bourses extended the losing streak for the third consecutive sessions on Sunday as investors turned little conservative.
The Dhaka Stock Exchange (DSE) began the week with the daily turnover dropping to Tk1,846 crore, the lowest in a month, from Tk2,227 crore on Thursday. DSE turnover fell below Tk2,000 crore-mark after 17 sessions.
Investors turned conservative due to the recent moves by the central bank that are supposed to tame the money flow into stocks, believes EBL Securities analysts.
Suspecting stimulus fund diversion to stocks, the central bank increased monitoring, while it ordered banks to report stock market activities on a daily basis on top of the recent moves to set a floor for bank deposit rates.
Keep updated, follow The Business Standard's Google news channel
DSEX, the broad-based benchmark of the premier bourse, fell by 0.4% to close at 6,823 on Sunday that travelled up to 6,923 in the last week.
Profit booking has been one of the reasons for the ongoing mild correction of the market as the DSEX gained by more than 21% in 2020, and an additional 26% in the first eight months of this year.
The losing streak of stocks from the large capitalised banking, telecommunications and non-bank financial institution (NBFI) stocks led the indices' correction on Sunday.
On the other hand, small-cap jute, mid-cap tannery, and large-cap cement sectors gained market capitalization by more than 2.5% to offset the selloff in banking, telecommunications and NBFI sectors.
Out of the 375 issues traded in the DSE, 131 advanced, 215 declined, and 29 remained unchanged.
Analysts seemed to be concerned about the recent unusual price hikes in the shares of many poorly performing listed companies.
However, the blue chip stocks also suffered a sell pressure on Sunday as DS 30, the index of selective stocks, fell by 0.40% to close at 2,443, while DSES, the index for Shariah-compliant securities, fell by 0.19% on Sunday.
The Chattogram Stock Exchange (CSE) also observed similar price corrections with a moderate decline in daily turnover on Sunday.
DSE's average market PE ratios stood between 16 and 17 that theoretically indicates investors will have to wait up to 17 years to get back their invested capital out of corporate earnings alone.
According to EBL Securities Daily Market Commentary, listed scrips on average are trading at a price level double to their underlying net asset value.
