Stocks end on higher note in a volatile week
Better earnings help boost investor confidence
Stocks closed higher at the end of the volatile week on Thursday.
Investors appeared to have settled their minds over the week through analysing the recent earnings updates, observed analysts.
The majority of the listed companies have disclosed year-on-year earnings growth up to December 2021 and that rejuvenated investor confidence, said EBL Securities in its weekly market commentary.
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DSEX, the prime index of the Dhaka Stock Exchange (DSE), gained 62.43 points or 0.9% to close at 7,086.
Throughout the week, investors were focused on rebalancing their portfolios based on recent and upcoming earnings, EBL Securities analysts added.
The act of selling weaker stocks to take a position in better stocks is called portfolio rebalancing, and the tendency seems to have intensified over the last week.
During the week, 235 scrips advanced, 125 declined, while 26 stayed the same on the DSE.
Investors' confidence in the market also have been reflected through the increase in the average daily turnover.
The DSE registered Tk1,324 crore in average daily turnover last week, compared to Tk1,286 crore in the previous week.
Investors were mostly active in miscellaneous, pharmaceuticals, and engineering sectors as each made a double digit contribution to the total weekly turnover on the DSE.
Most sectors gained over the week, while travel and leisure added the maximum of 8.4% to its market capitalisation, while general insurance and service sectors followed with 3.9% gains.
On the other hand, food and allied, ceramic and miscellaneous sectors led the red table with 2.3%, 2.1% and 0.8% decline in their respective market capitalisation.
Investors' buying spree seemed to spread across the board as the blue chip index DS30 underperformed with 0.2% gain in the week.
At the end of the week, the market's average price to earnings ratio stood at 16.89, according to the DSE.
Price to earnings ratio theoretically is equal to the needed years for an investor to be paid back out of the company's annual profits only.
The DSE scrips are trading at 1.97 times higher on average than their net asset value.
