DSE turnover ends the week at 2-month low

Infographic: TBS

Having suffered a week-long desperate selloff, stock bulls went conservative in triggering trade decisions and that dragged down the Dhaka Stock Exchange's (DSE) daily turnover to a two-month low of Tk465 crore on Thursday.

For the first time since 17 April this year, turnover in the premier bourse dropped below Tk500 crore, whereas it crossed Tk1,250 crore a day earlier this month.

Offering investors a breathing space during the last closing bell of the week, indices on both the bourses of Dhaka and Chattogram inched up. However, it helped recover nothing compared to what they lost over the previous four sessions.

DSEX, the broad-based index of the DSE, closed 0.08% higher on Thursday at 6,280. As the week started from 6,352, it declined by 1.15% on a weekly basis.

CSCX, the key index at the Chittagong Stock Exchange inched up on Thursday to close the week 1.06% lower at 11,102.

The market was too weak even three months ago as most of the stocks were stuck on the floor prices and with investors' optimism, over a 100 scrips came up in regular trading.

But then again, after a significant capital gain in many trendy stocks, smart investors booked some of their profits, said Shakil Rizvi, managing director of brokerage firm Shakil Rizvi Stocks Ltd.

On the other hand, chasing quick money, investors who bought shares at higher prices were facing capital erosion till the end of the week. The deepest burn was in insurance stocks as the life insurance sector's market capitalisation fell by 13.8% in a week, while the general insurance sector lost 6.3% of its market value.

Meanwhile, investors were nervous about the political situation, implications of the new income tax law, and also the upcoming monetary policy statement that determines the money market flow and interest rates.

Higher interest rates are considered a ban for stocks while the lending rate cap withdrawal from the new fiscal year was expected to raise interest rates.

Some analysts, however, were counting on the money printing plan that might help the financial markets' liquidity.

Shakil Rizvi said some stocks were at lucrative prices for long term investors, while the overall market's average price to earnings (PE) ratio was at a decent level of 14.29.

The lower the ratio is, stock prices are considered to be that cheaper.  

42 scrips advanced, 141 declined in the DSE last week.

Meanwhile, 238 scrips were found to be stuck on the floor prices on Thursday, up from 209 on 29 May.