Investors who owned cement stocks have strong ground to smile as they received hefty return of more than 114% in 2014 against their investments in this sector.
Cement stocks were the best performers at the Dhaka Stock Exchange in just-concluded year amid expectation of good business opportunities for cement makers due to the Padma Bridge construction project – the country’s largest ever infrastructure.
The sector was driven by heavyweight Lafarge Surma Cement that posted 267% price return last year, according to the Lanka Bangla Securities yearly review on capital market 2014.
It said the second best performer is telecommunication with 70.7% gain in its market capitalisation, led by Grameenphone – the market’s largest capitalised stock that alone posted over 80% price return.
Food & allied sector came third rising 59.6% market capitalisation, lifted by Olympic Industries and British American Tobacco Bangladesh Corporation, which surged 108.6% and 65.3% respectively.
Pharmaceutical sector’s market capitalisation increased 43.8%, dominated by ACI, Renata, ACI Formulation, Square Pharmaceuticals and Marico Bangladesh.
Scam-hit banking sector that remained under pressure in the past several years due to rising non-performing loan was the worst performer falling 3.5% in its market capitalisation.
At the end of 2014, the best performing companies were recorded from diverse manufacturing sectors. Mostly health-care, consumer goods, telco and real estate stocks saw substantial return in the past year.
Northern Jute Manufacturing Company is logged as the highest return-giving company with 391.9% return followed by Alltex, Lafarge, Summit Alliance Port Limited and ACI with 318%, 267%, 173.6% and 172.8% return respectively.
Around 157 companies gave negative returns at the end of 2014 compared to the end of previous year. Among all these losing stocks, top 10 worst performing companies posted 38% to 60% negative returns.
Among the worst performing companies, some are from textile and food & allied sectors that encountered the largest losses in 2014. Tallu Spinning is the worst performing company with over 60% negative return followed by Fine Foods, Delta Spinning, Argon Denim, Paramount Textile, Rahima Food and Metro Spinning.
Corporate profitability of listed companies was up by 28.9% in first nine months of 2014 compared to the same period a year earlier.
Banking sector performed the best with 91.5% growth in net profit during the period while textile sector the worst in 2014 by losing profitability of 14.9%.
Telecom sector witnessed staggering 43.1% growth in net profit during the period as Grameenphone, the country’ top mobile operator, registered 48.6% growth in earnings.
The company’s earnings growth saw impressive rise as the government did not raise corporate tax in the current financial year, which depressed its earnings in the previous year.
Fuel & Power sector’s corporate earnings during January-September period last year registered 9.2% gain year on year.
“Due to upgraded national grid, power generation companies load factor increased during the year resulting in growth of earnings of all the companies,” said the review.
Listed non-banking financial institutions’ (NBFIs) profit rose 14.8% during the period after a marginal increase last year. After the capital market crash, the NBFI’s 2014 earning was the best as interest income contributed 50% to its operating profit.