Political instability takes a toll on stocks
Stocks suffered last week, as investors sold shares after being prompted by the political uncertainties over the election-time government.
The Dhaka bourse's key index plunged below 3,800 points level after five months.
DSEX, the benchmark general index of Dhaka Stock Exchange, closed the week at 3,799 points, after dropping 44 points, or 1.15 percent.
Instability in political frontier around imminent political issues played an important role throughout the week, IDLC Investments said in its analysis.
The volatile vibe amid the investment community resulted in a waning tone stretched after the long closure of Eid-ul-Azha, it said.
“Besides, investors seemed to remain much cautious and focused on short-term positioning as political phenomenon was changing frequently,” the merchant banker said.
The week started with a slide in indices as investors focused on upcoming political situation. Additionally, panic sales dragged down the market sentiment for the first two sessions immediately after the Eid-ul-Azha.
But, the third session reversed back and ended positive in the next sessions over political hopes and expectations.
But, the market returned to its negative mindset with further decline in both the indices and turnover in the next session.
“However, imminent quarterly earnings continued creating hope amid investors, and fundamental investments taking place over the week,” IDLC Investments said.
As general investors were on a selling frenzy, these were the best time for value investors to buy their picks cheaply, LankaBangla Securities, a leading stockbroker, said.
“Economic variables are now favourable for the market. Export growth is very high along with slowly picking up import growth,” it said.
The country's forex reserve has hit $17 billion and the domestic money market is also very liquid with the call money rate hovering around 7 percent, it said.
Among the major sectors, bank's gained the most this week with a 3 percent rise. Conversely, food and allied lost the most with a 17.1 percent drop, IT fell 5.4 percent, cement 5 percent and general insurance 3.8 percent.
Apart from the indices, the total turnover on the premier bourse also declined by 16.57 percent to Tk 993 crore last week from the previous week's Tk 1,190 crore.
Losers beat gainers 211 to 72, with nine securities remaining unchanged in the last week.
The Chittagong Stock Exchange also ended in the red with its Selective Category Index losing 0.69 percent to close the week at 7,442 points.