Stocks fall for fourth week on concern over banks’ Q2 earnings

Staff Correspondent | Published: 01:14, Jul 22,2018

 
 

Dhaka stocks dropped in the past week, extending the losing streak to the fourth consecutive week, as banking sector scrips continued to plunge on concern over their second quarter earnings results.
DSEX, the key index of Dhaka Stock Exchange, lost 0.40 per cent or 21.48 points over the week to finish at 5,337.42 points on Thursday, the last trading session of the week.
The core index lost 104 points in the last four consecutive weeks.
The gloom in the market was once again on the back of bank and non-bank financial institute sectors as the investors were still concerned over their financial health.
So far two banks, United Commercial Bank and ICB Islami Bank, and three NBFIs, Delta Brac Housing, National Housing Finance and Investment and Peoples Leasing and Financial Services, unveiled their earnings reports for the second quarter on DSE web site in last few days.
Of them, profit of UCBL fell and loss of ICB Islami Bank increase while profit of DBH and NHFIL fell and PLFSL incurred loss in the quarter.
Investors are expecting lower earnings of most of the banks and NBFIs in April-June quarter (second quarter) because of the rising defaulted loans in the sectors.
Average share prices of bank declined for the six consecutive weeks due to the ongoing crisis in the sector.
The media was continuously exposing miserable situation in the financial sector that lessened investors’ expectation ahead of second quarter (April-June) financial results.
Average share prices of cement, bank and non-bank financial institutions dropped 3.1 per cent, 2.8 per cent and 1.8 per cent respectively that triggered the volatility.
Meanwhile, DSE board on Wednesday afternoon delisted Rahima Food Corporation and Modern Dying as the companies were not in operation for many years, but share prices of the companies were continuously rising.
The share prices of almost all the ‘Z’ category companies declined on Thursday as investor went for jittery share sales from those of junk companies to save their fund.
Investors were disappointed after some of the multinational companies declare profit fall for the April-June period.
The share prices of RAK Ceramics, Berger Paints Bangladesh and Heidelberg Cement plunged over the week as the companies declared quarterly profit fall for the April-June period.
On the other hand, the share prices of Grameenphone soared 3 per cent on the week as the company on July16 declared profit growth for the second quarter and announced 125 per cent interim cash dividend for the shareholders.
Besides GP, the share prices of Marico Bangladesh surged by 2.1 per cent as the company also made profit in the April-June period and announced 150 per cent interim cash dividend.
Average share prices of engineering, telecommunication and miscellaneous sectors advanced 4.3 per cent, 3.2 per cent and 2.8 per cent respectively that saved the market from further fall.
‘This week the market opened with bullish vibe but slowed down after a number of companies declared earnings below expectation for the April-June quarter,’ said EBL Securities in its weekly market commentary.
‘The share prices of the small cap stocks continued soaring as investors opted for short term gain throughout the week,’ it said.
The daily average turnover of the bourse, dropped to Tk 878.18 crore in the past week from Tk 970.04 crore in the previous week.
Out of the 343 traded issues, 199 declined, 131 advanced and 12 issues remained unchanged.
DS30, the blue chip index of the DSE, also shed 0.12 per cent, or 2.31 points, to close at 1,904.47 points over the week.
Shariah index DSES, however, gained 0.45 per cent, or 5.71 points, to close at 1,273.09 points.
BBS Cables led the turnover chart for the second weeks with its shares worth Tk 165.93 crore changing hands.
KDS Accessories, United Power Generation & Distribution Company, Bashundhara Paper Mills, Khulna Power Company, Monno Ceramic Industries, The Peninsula Chittagong, Legacy Footwear, Singer Bangladesh and SK Trims Industries were the other turnover leaders.
KDS Accessories gained the most in the week with a 39.86 -per cent increase in its share prices, while Asia Pacific General Insurance Company was the worst loser shedding 13.36 per cent.

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