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Dhaka Tribune

Rising political tension breaks four-week bull-run

Update : 30 Nov 2013, 06:57 PM

Bearish sentiment gripped the stock market in the past week after four consecutive weeks of bull-run as investors worried again over the deepening political chaos.

During the week ended Thursday, the benchmark DSEX dropped 165 points or 3.7% to 4,231 from previous week’s highest level since its introduction on January 28 this year.

The DS30 Index comprising blue chips lost 40 points or 2.6% to close at 1,504.

The Chittagong Stock Exchange (CSE) Selective Category Index fell sharply 317 points or 3.7% to 8,282.

Investor presence on the trading floor was thin throughout the past week due to opposition’s blockade programme.

The daily turnover averaged Tk6.2bn, down by 11% over the previous week’s average turnover of Tk7bn.

“Sudden drop in turnover in last three trading sessions of the week indicates that investors are still staying on the sidelines and observing market movement,” said Lanka Bangla Securities in its weekly market analysis.

It said investors were more confused about the direction of the market. On the political front, confusion still remains about imminent national election, it said.

“Investors turned a bit bearish due to severe clashes that took place in the three-day nationwide blockade enforced by opposition parties.”

Currently, money market is flooded with liquidity. Call money rate is hovering around 6.5% to 7%. Credit demand is low as uncertainty prevails over peaceful transition of political power.

“The last week of November made a depressive end. Negative vibe was prevalent as the week started, and persisted throughout the week,” said IDLC Investments.

“Investors’ confidence continued to evaporate over political gloom and the investors naturally were rather disappointed since this Week’s correction wiped out the previous weeks’ gain entirely,” it said.

Consequently, investors went back to the sideline causing diminishing turnover in the final sessions of the week.

The market breadth remained negative, as out of 296 issues traded during the week, 247 declined, 45 advanced and 4 remained unchanged on the premier bourse.

All the major sectors ended in red in the week. Banks lost the most by 5.5%, followed by non-banking financial institutions 4% and telecommunications 3.5%.

Textile and fuel & power were at the center of activities throughout the week, accounting for 23% and 14% of total turnover respectively.

RN Spinning became the week’s top turnover leaders with shares worth Tk1bn changing hands followed by Generation Next Fashion, Paramount Textile, Delta Life Insurance and Bengal Windsor Thermoplastic.

Central Pharma was the week’s top gainer, posting a rise of 23% and Olympic Industries was the week’s worst loser, plunging 32%.  

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