Stocks end year's first week in black

Dhaka stocks ended the first week of 2018 with a gain of over 58 points from the previous week to close at 6,302.84 points.

However, the turnover continued to show a downtrend because of a sudden demand for liquidity from the banks in the last couple of weeks, market insiders said.

Investors also became cautious because of the upcoming monetary policy to be announced by the central bank this month, they said.

Turnover decreased by 10.03 percent to Tk 518.76 crore yesterday from the previous day.

Hike in interest rate on deposits due to sudden demand for liquidity from the banking sector prompted big investors to shift their money to the banks from the stockmarket, putting a negative impact on the daily turnover, market insiders said.

Investors adopted a wait-and-see policy because of the dividend declaration season for banks and non-bank financial institutions, said Mohammed Rahmat Pasha, managing director of UCB Capital Management.

The upcoming monetary policy also kept investors in the observation mode to see how the money market impacts stocks, he said.  The liquidity crisis gave a message to the stockmarket that the deposit rate will go up again, Pasha said.

In a recent meeting with bankers, Bangladesh Bank's Governor Fazle Kabir asked banks to focus more on collecting deposits instead of lending, a senior executive of a merchant bank said. In the week, United Power Generation was the most active scrip with Tk 124 crore in turnover followed by Dragon Sweater and Spinning with Tk 67.91 crore.

Jute Spinners became one of the week's top gainers, although the company's production remained suspended since June 2016.

Each share price of the company gained 34.17 percent to close at Tk 138.60 on Thursday.

The share price of the company increased by 75 percent in the last two months despite incurring a loss of Tk 8.39 crore in the year ending on June 2017, according to DSE.

Last week, DSE queried Jute Spinners of the unusual price hike.

“We have no undisclosed decision information relating to our company's operation regarding unusual price hike in the market and the reason behind the unusual price of shares is fully unknown to us,” the company said in its reply.