DSEX stays afloat amid volatility

Highlights:

• DSEX 0.03% up to 6,336
• Turnover 48% up to Tk890.7cr
• 83 issues advanced, 109 declined
• Top gainer: Fu Wang Food 9.8% up to Tk29.1
• Top loser: Progressive Life Insurance 7.9% down to Tk92.4

Amid the ongoing volatility owing to the rising interest and exchange rates in the new fiscal year, DSEX, the broad-based index of the Dhaka Stock Exchange (DSE) stayed afloat for the second consecutive session on Wednesday.

The benchmark index of the premier bourse opened higher on the day, but a selling pressure in the recently rallied scrips from the conservative investors dragged it down before 12 noon.

However, a number of companies were rising from the floor price levels and following the recent trend of some quick rallies in most of such scrips which attracted short term investors there to hold the index up.

Mainly textile, food, and engineering sectors led the trend as many of the sectoral stocks were stuck on the floor prices for months.

Stockbrokers said the Ukraine war's global economic aftermath hurt most of the companies' profitability. And large-scale investors, who held the stocks over the downtrend, started to inject some fresh capital to average down their costs in particular scrips recently expecting an earnings recovery in the upcoming quarters.

Many analysts believe the central bank measures to let the interest and exchange rate adjust with the market reality would help correct the macroeconomic imbalances to some extent, following some short-term inconveniences.

Officially, taka had its biggest single day fall against the dollar earlier this week by Tk2.85 per dollar to cost Tk108.85 for a dollar that further fell to Tk108.9 on Wednesday in the interbank market. Also, the anticipated moderate upward adjustment of lending rates was observed.

Stock investors, however, were energised to see more stocks getting rid of the floor prices as 206 of the 401 DSE scrips were trading above floor prices, which was 177 on 19 June.

During the closing bell on Wednesday, 195 of the shares, mutual funds and corporate bonds in the DSE were still stuck at the floor prices.

A concern regarding the trending loss-making or junk company stocks were widespread among analysts.

"Investors continued their chase for particular rumour-based junk stocks in anticipation of quick gains," EBL Securities Research wrote in its market commentary.

The Dhaka bourse observed a significant increase in trading participation as total turnover increased by 48.4% to Tk890 crore from Tk600 crore.

Textile, food, and engineering together made almost half of the DSE turnover.

83 DSE scrips advanced, 109 declined.

Meanwhile, CSCX, the broad-based index of the Chittagong Stock Exchange (CSE), inched down by 1.7 point to 11,193 while turnover in the port-city bourse increased by 14% to Tk21.5 crore.