Stocks' volatile week ends offering relief to investors
The market notched some signs of recovery in the last two sessions of the week as a sharp correction in the majority of scrips created a bargain hunting opportunity for opportunistic investors
After staying upbeat over the past few weeks, Dhaka-Chattogram stocks had observed a big selloff on Tuesday out of a rumour and fear that individual stock investors' capital gains might be taxed.
DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), absorbing the year's biggest 0.63% fall on Tuesday, recovered a lot in the next two sessions that offered a relief to the bulls who were pouring their capital in a number of trendy stocks.
Though the market began the week with positive momentum as opportunist investors continued to chase sector-specific lucrative stocks with quick gain potential, the market encountered dominant sell pressure during the middle of the week, EBL Securities wrote in its weekly market commentary.
However, the market notched some signs of recovery in the last two sessions of the week as a sharp correction in the majority of scrips created a bargain hunting opportunity for opportunistic investors, it added.
Finally, the major equity index closed the week 0.04% lower at 6,352, after four consecutive winning weeks.
Analysts were also cautious about the energy situation alongside the political development ahead of the upcoming national election scheduled to happen at the end of this year.
Turnover in the premier bourse, reaching over Tk1,200 crore earlier this week, came down by several hundred crore taka later due to a cautious stance of a large number of investors. Finally, the average daily turnover of the week was 1.4% lower at Tk1,088 crore, compared to the previous week.
The recovery from the interim dip was led by life insurance stocks as a number of them ended higher on Thursday.
As investors were more focused in selective rallying stocks, majority of the scrips ended the week in the red territory, and only 69 scrips advanced in the DSE, while 114 declined.
Investors were also chasing some other stocks including SK Trims, Yeakin Polymer, Fine Foods, Bangas, Intraco Refuelling, Navana Pharma, IT Consultants, and Agni Systems later last week.
Life Insurance, IT, food, and fuel-power sectors together made half of the DSE turnover last week.
Life insurance sectors' market capitalisation increased by 12.7%, followed by engineering, tannery and bank with very small increase in their respective market capitalisations.
Travel and leisure, jute, cement, general insurance, paper, and service sectors led the losers last week with 8.6% to 1.8% decline in market capitalisation.
At the end of the week, the average price to earnings (PE) ratio at the DSE was 14.47, down from 14.52 a week earlier.
PE ratio is the widely followed market indicator that reflects how expensive stocks are. It is assumed that a stock with a lower PE ratio would take less years to pay back an investor out of its earnings per share alone.
The Chittagong Stock Exchange's major index CSCX closed the week 0.01% higher at 11,220, while 69 scrips advanced there and 94 declined.