A dozen DSE sectors outperform other assets in Jan-Jun

The DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), recorded a modest increase of 2.2% during the first half of 2023.

Despite the sluggish broad picture of the market, 12 of the twenty stock market sectors generated double-digit annualised returns for their investors, according to Green Delta Dragon Asset Management Research.

Analysts at the new generation asset manager, combining capital gains and cash dividends, said from 12 sectors investors had more than a 5% return in a short period of six months throughout June this year.

The double-digit annualised return widely beat fixed deposits at banks, bonds, and also the subsidised savings certificates.

Life insurance led the gainers with a massive 23.2% return in six months, followed by travel and leisure, cement, food, and allied sectors, whose six-month returns were each more than 10%.

General insurance, IT, tannery and footwear, service and real estate, banking, telecommunication, paper and printing, and miscellaneous were the other sectors that generated 5-10% returns in six months.

Jute, engineering, textiles, fuel, and power were the sectors that generated meagre positive returns ranging between 0.9% and 2.4%, mainly from capital gains as their dividends are given in the second half of every calendar year.

Green Delta Dragon's Senior Investment Research Manager Mohammad Asrarul Haque told TBS that over the January-June period, small-cap stocks showed vigorous performance, and sectors that had higher numbers of small-cap stocks generated higher capital gains.

On the other hand, investors could only bag dividend yield from large-cap stocks such as banks and telecommunications,  as most of their stocks were stuck at floor prices despite lucrative prices and the companies paid decent dividends.

Cash dividends were the dominant contributor to the total return from some sectors like telecommunications and banking, as their average dividend yields were 5.8% and 4.2%, respectively.

The percentage of cash dividends against the purchase price of securities is called the dividend yield.

Life insurance, travel and leisure, and cement sectors generated double digit capital gains in six months.

Investors incurred some 3% to 0.1% losses in non-bank financial institutions, ceramics, pharmaceuticals, and mutual fund sectors, including dividends.