Investor activity jumps 42% on DSE despite economic headwinds

Infographic: TBS

Investor activity on the Dhaka Stock Exchange (DSE) surged last week, with average daily turnover jumping 42% despite persistent macroeconomic headwinds, a fuel price hike and disappointment over the unchanged policy rate.

Average daily turnover at the country's premier bourse rose to Tk785 crore from the previous week's sluggish level. The benchmark DSEX gained 46 points, or 0.83%, to close at 5,578, while the blue-chip DS30 advanced 10 points to 2,112.

Market breadth was positive, with 252 issues advancing, 105 declining and 29 remaining unchanged. However, total market capitalisation fell by Tk1,800 crore over the week.

Sheltech Brokerage Limited, in its weekly market commentary, said trading was marked by a tug-of-war between selective bargain hunting and profit-taking amid mixed investor sentiment.

Buying interest early in the week was supported by Moody's revision of Bangladesh's economic outlook from negative to stable and reports of improved national gas supply. Expectations of fiscal year-end earnings and dividend declarations by June-closing companies also provided momentum.

The rally came under pressure mid-week after the government raised domestic fuel prices amid continued geopolitical tensions between the US and Iran. Sentiment weakened further towards the weekend after Bangladesh Bank kept its policy interest rate unchanged, disappointing investors who had expected monetary easing.

Sheltech analysts said investors will closely watch whether the renewed buying momentum broadens across sectors. Near-term market drivers include regulatory progress on the Bangladesh Securities and Exchange Commission's (BSEC) proposed market development initiatives, developments in the Middle East and corporate financial results for the June-ending fiscal year.

Square Pharmaceuticals, Orion Pharma, LafargeHolcim Bangladesh, Orion Infusion and Unique Hotel were the biggest contributors to the DSEX's gain.

Textile stocks accounted for the largest share of turnover at 20.50%, followed by Insurance at 17.20%, Pharmaceuticals and Chemicals at 13.23%, Mutual Funds at 8.89% and Banks at 8.25%.

Mutual Funds recorded the highest sectoral return, rising 6.12%, followed by Paper and Printing at 4.18%, General Insurance at 3.82% and Life Insurance at 3.14%. Engineering fell 0.83%, Food and Allied 0.60% and Banking 0.56%.

Eastern Bank, Sharp Industries, Square Pharmaceuticals, IPDC Finance and Saiham Textile were among the most-traded stocks during the week.

First Prime Finance Mutual Fund topped the gainers, surging 50%, followed by ICB AMCL Second Mutual Fund with a 33.33% rise. Desh General Insurance gained 30.46%, Orion Infusion 23.02%, and Orion Pharma 19.84%.

Walton led the weekly losers, falling 12.95%, while Anlyma Yarn, Exim Bank First Mutual Fund, Bay Leasing and Al-Haj Textile declined between 6.40% and 6.76%.

The Chittagong Stock Exchange also ended the week higher, with the selective CSCX index gaining 1.39% to 9,147 and the all-share CASPI advancing 1.19% to 14,912.