DSEX slips amid profit-taking after brief rally
Analysts expect a gradual recovery as treasury bill and bond yields continue to fall, making equities more attractive.
The Dhaka Stock Exchange (DSE) ended lower today (6 October) as cautious investors locked in quick profits following a short-lived rally.
The benchmark DSEX index fell by 24 points to close at 5,424, while the blue-chip DS30 index decreased by 4 points to finish at 2,089. The Shariah index also edged down 2 points, closing at 1,172.
Despite the decline, market turnover rose 19% to Tk737 crore from Tk619 crore in the previous session. Of the 395 issues traded, 96 advanced, 255 declined, and 44 remained unchanged.
Market insiders said general investors are booking profits after minor gains, as they believe the current situation is not favourable for long-term investments.
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According to them, although the interim government has already outlined a roadmap for the upcoming national election, investors remain cautious since the election period could impact both the capital market and the broader economy.
As a result, many have adopted a wait-and-see approach before making fresh investments, the insiders said.
Analysts, however, expect a gradual recovery as treasury bill and bond yields continue to fall, making equities more attractive.
Once the election schedule is officially declared, large investors, who are currently on the sidelines, will likely re-enter the market, they said, adding that the increasing pace of deposit mobilisation by banks could inject further liquidity.
The capital market regulator has also been implementing several reforms, with some already showing positive outcomes.
Analysts further said declining yields on government securities are supporting equities, as lower bond returns make stocks more attractive, especially with average market returns now above 10%.
An analyst, requesting anonymity, noted that the market may strengthen further with falling treasury bill and bond rates, while upcoming dividend announcements and company disclosures could also drive renewed interest in fundamentally strong stocks.
Investor sentiment has also improved slightly amid signs of macroeconomic stability. Rising foreign exchange reserves, the government's plan to merge weaker banks, and easing political uncertainty have helped lift confidence.
Most large-cap sectors ended in the red. Engineering stocks posted the highest loss of 0.85%, followed by banking at 0.69%, pharmaceuticals 0.67%, food and allied 0.52%, fuel and power 0.40%, and non-bank financial institutions 0.25%. Telecommunications was the only sector to close higher, gaining 0.27%.
Block trades accounted for 4.6% of the day's total turnover. Robi Axiata was the most traded share of the day, with its price rising by 1.7% and a turnover of Tk26.9 crore.
