DSE key index plunges, but blue-chip stocks surge
Grameenphone played a pivotal role as an index puller
The key index of the Dhaka Stock Exchange (DSE) plunged last week, while the blue-chip index soared as investors gravitated toward fundamentally sound stocks, seeking secure investments.
The DSEX— benchmark index of the DSE— fell by 20 points to settle at 5,903, while the blue-chip index DS30 gained 46 points to reach 2,179.
Investor participation in the market continued to surge, reaching a two-year high as the daily average turnover increased by 54% to Tk1,282 crore, compared to Tk778 crore in the previous week.
Out of the total traded stocks, 105 advanced, while 278 declined and 15 remained unchanged.
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EBL Securities in its weekly market commentary said the benchmark index of the capital bourse closed in red last week as investors opted to realise their recent gains amid uncertainty regarding the sustainability of the market's upbeat momentum.
The market witnessed a tussle between bulls and bears who competed to grab the reins of the market's momentum, it added.
Despite beginning the week on a positive note, driven by euphoria following the recent major political shift, the market appeared to cool down as investors eventually preferred profit taking, which compelled the benchmark index to settle in negative territory by the end of the week, EBL Securities said.
According to market insiders, Grameenphone—the largest stock in the capital market—played a pivotal role as an index puller, contributing around 30 points to the recovery of the key index from its decline.
Last week, its share price jumped by approximately 19% to reach Tk377, while its market capitalisation surged by Tk8,000 crore to Tk50,906 crore. Grameenphone also led the turnover chart, contributing around Tk100 crore to the daily average turnover at the DSE.
A top official of a brokerage firm said that during the previous government's regime, Grameenphone faced significant regulatory challenges due to Muhammad Yunus' involvement. These challenges led to various restrictions on the company, which, in turn, resulted in its share price being undervalued as investors withdrew.
"With the current changes in the political and regulatory environment, investors now believe that Grameenphone will benefit from a fairer business climate. This optimism has led to increased interest in the company's shares, creating opportunities for business expansion." added the official.
According to Grameenphone's annual report for 2023, about 56% of the company's shares are owned by Norway's Telenor Mobile Communications while more than 34% shares are owned by Grameen Telecom— established by Yunus.
The other blue-chip stocks that contributed to pulling up the index are BRAC Bank, BAT Bangladesh, United Commercial Bank, and Renata.
On the other hand, Power Grid, Beximco Pharma, Beacon Pharma, National Bank, and Orion Pharma were the top index draggers last week.
Islamic Finance was the top gainer last week, with its share price jumping over 47% to reach Tk 16.20. It was followed by Pragati Life Insurance, Phoenix Finance, Dacca Dyeing, and AB Bank.
GQ Ballpen was the worst performer, with its price dropping by 13.99%, followed by Hami, Navana Pharma, and Sonali Paper.
