Stocks extend bearish trend amid regulatory reforms

Infographics: TBS

Dhaka stocks have been experiencing a continued downward trend for the past couple of weeks, largely due to regulatory reforms in the capital market. 

During this period of volatility, cautious investors are adopting a "wait-and-see" approach, carefully monitoring the performance of potentially lucrative stocks before making any investment decisions.

Along with the current market conditions, the upcoming quarterly financial reports (July-September) are of key importance to investors. During this time, widespread student protests against discrimination took place, adding to the overall economic uncertainty, said market insiders.

Additionally, during this period of market reform, investors have been cautious in selecting stocks, favouring blue-chip stocks over lower-quality or "junk" shares.

At the end of the week, the prime index, DSEX, decreased by 41 points or 0.74% to 5,422 points. The Blue-chip index, DS30, dropped by 0.29% to 1,985 points, while the Shariah-compliant stocks index, DSES, was down by 1.26% to 1,206 points. At the same time, DSMEX (DSE SME Index) dropped by 4.96% to 1,115 points.

The weekly average turnover dropped by 13.97% to Tk367 crore compared to the previous week. The total turnover stood at Tk1,467 crore, down from Tk2,131 crore the previous week.

The market capitalisation increased by 0.34% to Tk6,74,416 crore from Tk6,72,115 crore compared to previous week. Of the total scrips traded, 211 advanced, 146 declined, 38 remained unchanged, and 17 were not traded.

The share price of Agni Systems rose at 22.99% to Tk41.20 capturing the DSE weekly top gainer list, followed by RD Food at 16.74% to Tk27.20, Fu-wang Food at 14.75%, Fu-wang ceramic 11.48%, and S Alam Cold Rolled Steels 10.62%.

Meghna Pet Industries was down by 15.21% to Tk22.30 at the DSE which captured the weekly top loser list, followed by Bangladesh Submarine Cables by 10.64%, and Runner Automobiles by 10.34%.

EBL Securities in its weekly market commentary said the benchmark index of the capital bourse extended its bearish headwinds for three consecutive weeks as investors' negative sentiment regarding the market momentum continued to pervade across the trading floor.

Investors remained watchful amid the ongoing regulatory debates, while potential further policy rate hikes and uncertainty surrounding earnings declarations for June-ending companies triggered the bearish trend to persist, according to the commentary.

However, bargain hunters emerged in the final trading session of the week to avail short-term gain opportunities following significant corrections, providing a cushion to the market's free fall, said the commentary.

Investors were mostly active in the Bank sector (27.1%), followed by the Pharma sector (16.5%) and Food sector (8.3%).

Sectors ended in mixed with the IT sector (6.6%) being the highest gainer and the Engineering sector (-2.9%) being the biggest loser.