Weak sentiment drags DSE into extended correction
Of the 413 issues traded on the DSE, 68 advanced, 306 declined, 23 remained unchanged, and 16 were not traded.
The Dhaka Stock Exchange (DSE) indices witnessed a weekly correction with a bearish tone, as cautious investors booked profits on the trading floor.
In addition, the National Board of Revenue's (NBR) request for capital gains data spooked high-net-worth investors last week.
Over the week, three out of five trading sessions closed in the red. By the end of the week, the prime index DSEX fell by 74 points to 5,450. The blue-chip index DS30 dropped 44 points to 2,107; the Shariah-compliant index DSES edged down by 18 points to 1,178; while the DSE SME Index (DSMEX) gained 46 points to 974.
The weekly average turnover decreased by 39.02% to Tk701 crore, compared to the previous week's Tk1,150 crore. Total turnover stood at Tk3,505 crore, down from Tk5,748 crore a week earlier. Market capitalisation also slipped slightly by 0.02% to Tk7,24,466.72 crore, from Tk7,24,612.59 crore in the previous week.
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Of the 413 issues traded on the DSE, 68 advanced, 306 declined, 23 remained unchanged, and 16 were not traded.
Among individual stocks, Envoy Textiles led the weekly gainers with an 18.68% increase to Tk61, followed by Shyampur Sugar (up 16.88% to Tk204.30) and UCB (up 15.63% to Tk11.10). On the other hand, Prime Finance topped the weekly losers with a 27.59% decline to Tk2.10, followed by Social Islami Bank (down 24.07% to Tk4.10) and Global Islami Bank (down 21.74% to Tk1.80).
Market insiders said the correction deepened after the NBR sought data on high-net-worth individuals from brokerage firms, but they expressed hope that the situation would recover soon.
Experts noted that the capital market regulator has been implementing several positive reforms, some of which are already showing results. A major factor supporting equities is the declining yield on government securities, which analysts expect to fall further. With stock market returns currently above 10%, lower bond yields are making equities increasingly attractive.
Investor confidence has also been lifted by positive macroeconomic indicators. Bangladesh's foreign exchange reserves have stabilised and started to rise. The government's plan to merge weaker banks has reassured the market, while political uncertainty ahead of the national election has eased.
In its weekly market commentary, EBL Securities observed that the benchmark index extended its correction phase as investors continued broad-based profit-taking while shifting towards a defensive stance in the absence of strong positive catalysts. Although selective scrips experienced strong buying in anticipation of favourable earnings and dividend announcements, market activity was largely dictated by persistent selling pressure and subdued participation, reflecting cautious positioning by investors.
Market participation also continued to decline this week. Investors were most active in the pharmaceutical sector 13.1%, followed by engineering 11.6% and banking 10.9%. Most sectors posted negative returns, with the financial institutions sector 6.5% emerging as the biggest loser.
