Stocks gain before Eid, but turnover sinks to yearly low

Infograph: TBS

Stocks edged up today (4 June) ahead of the 10-day Eid holiday beginning today, as investors leaned towards buying rather than selling, knowing they wouldn't receive cash from sales before the break due to the two-day settlement cycle.

However, overall investor participation remained subdued, resulting in the lowest single-day turnover of the year yesterday.

On the day, the benchmark index DSEX of the Dhaka Stock Exchange (DSE) jumped by 44 points to reach 4,709, while the blue-chip DS30 gained 16 points to close at 1,762.

Among the traded stocks, 277 advanced, while 55 declined and 64 remained unchanged.

Turnover at the DSE dipped to Tk224 crore, down 2% from Tk229 crore in the previous trading session. The last time turnover was this low was on 4 August 2024, when it stood at Tk207 crore, according to DSE data.

The port city bourse, Chittagong Stock Exchange (CSE), also settled on a positive note. The Selective Categories' Index (CSCX) and All Share Price Index (CASPI) advanced by 48 and 23 points to reach at 13,139 and 8,022 respectively.

EBL Securities, in its daily market commentary, said the capital market ended the final trading session before the long Eid holidays on a positive note, recovering from the previous day's brief pessimism following the fiscal budget announcement, although investor participation remained sluggish as most investors remained on the sidelines.

While the proposed budget has elicited mixed reactions from investors, primarily due to the absence of any strong immediate stimulus, there has been still optimism over proposed incentives aimed at the broader development of the capital market, it added.

A senior official at a brokerage firm said many investors are refraining from selling shares ahead of the holiday, as it takes at least two days to receive cash from stock sales. "Instead of liquidating their holdings, investors are engaging in bargain hunting, taking advantage of the recent market downturn to buy fundamentally strong stocks at attractive prices," he said.

However, he noted that overall investor participation remained low, as most are avoiding margin loan-based trading. "If investors buy on margin now, they won't be able to sell during the holiday, which would lock in their funds. This means they would incur interest costs for at least 10 days without the ability to exit their positions," he added.

According to the Shanta Securities daily market review, banking sector exerted the highest by 20.46% in the total turnover, followed by food and allied by 18.62% and pharmaceuticals by 10%. 

LankaBangla Securities said most of the sectors ended in green with fuel and power by 1.65%, food and allied by 1.52% and paper and printing by 1.44% exhibiting the most positive returns. 

Only jute exerted some correction on the bourse yesterday. 

Sonargaon Textile topped the list of gainers, followed by S Alam Cold Rolled Steels, Titas Gas and Sunlife Insurance. Northern Jute led the list of losers, followed by jute Spinners, Phoenix Insurance and Sonar Bangla Insurance.