Stocks inch up in a volatile week

Amid mixed macroeconomic updates, profit-booking pressure in some overbought stocks kept pushing the indices down last week, while the continuation of investors' appetite for some selective trendy stocks helped indices offset those.

DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), closed the week 0.75% higher at 6,564, which had a 0.7% correction in the previous week.

The core index crossed the 6,600-mark and the single-day turnover hit a record high of Tk2,800 crore on Tuesday, but couldn't hold the upbeat momentum as investors took a cautious stance, influenced by the gloomy earnings forecast of the major companies amid the macroeconomic adversities, EBL Securities wrote in its weekly market commentary.

The country's foreign currency reserves dropped below $37 billion last week as the Bangladesh Bank was selling dollars to banks.

Stockbrokers, however, observed investors' cautious optimism amid the trend that import payment pressures were easing last month due to lower fuel and capital machinery procurement.

LankaBangla Securities wrote citing the central bank, Bangladesh's import bills fell to $5.38 billion in August from $6.79 billion a month ago. Fuel oil and capital machinery contributed more than 65% to the $1.41 billion import fall in August.

Also, a reported slowdown in apparel exports in the first 18 days of September increased investors' caution, while remittance inflow still remains a source of hope.

Investors were busy with forecasting the upcoming earnings and following two declining sessions, the demand for oversold mid-cap stocks increased on Thursday, reflecting the increased tendency of portfolio rebalancing – booking profits to shift to other stocks.

With more trading activity, the average daily turnover on the DSE notably increased by 43% to Tk2,022 crore last week.

Investors were most active in the pharmaceuticals and chemical sector which contributed to nearly one-fourth of the week's turnover in the DSE, followed by miscellaneous and engineering sectors.

Travel and leisure generated the highest return last week as the sector's total market capitalisation increased by 20.5% while following the recent gains jute sector faced the sharpest 13% correction.

Only 86 advancing scrips, mostly mid-cap ones, offset the decline of 166 while the price of 134 scrips remained unchanged at the DSE.

In the Chittagong Stock Exchange, the broad-based index CSCX increased by 1.07% to 11,596 last week, while CSE30, the blue-chip index of the port city bourse, inched down by 0.05% to 13,505.