Stocks drop on poor earnings reports

Staff Correspondent | Published: 00:00, Jan 28,2020


Dhaka stocks dropped on Monday after gaining in the previous three sessions as investors went for selling shares after disappointing financial declarations by a number of companies including Investment Corporation of Bangladesh and Bangladesh Steel Re-Rolling Mills.

DSEX, the key index of the Dhaka Stock Exchange, lost 0.77 per cent, or 35.18 points, to close at 4,493.01 points on Monday after gaining 120 points in the previous three sessions.

The core index had gained 490 points in the previous eight sessions amid the government moves to stabilise the ailing market.

The core index started falling from the very beginning of Monday’s session and maintained the trend until the end of the session as investors went for share sales amid poor financial reports of a number of companies, market operators said.

State-run Investment Corporation of Bangladesh, which was formed to support the capital market, made loss for the second consecutive quarters in the financial year 2019-20.

The ICB declared loss of Tk 1.96 per share in the period of July- December, 2019 compared with that of profit by Tk 0.57 per share in the same period in the previous year.

The ICB said that the profits of the company were declining due to a decrease in capital profit and an increase in loan interest.

The company’s net asset value decreased due to a fall in market price of share investment portfolio.

The share prices of the ICB decreased by 3.7 per cent on Monday. The poor financial declaration by the ICB also raised concern about the NBFI sector, market operators said.

Profits of Bangladesh Steel Re-Rolling Mills dropped to Tk 1.53 per share in the July-December period in 2019 from that of Tk 2.61 per share in the same period in the previous year while profits of BSRM Steel plunged to Tk 0.45 per share in the July-December period against Tk 2.10 per share in the same period in the previous year.

Share prices of all the seven steel manufacturing companies dropped on the day while BSRM and BSRM Steel declined to the lowest possible marks.

The average share prices of non-bank financial institution, engineering, energy and bank sectors dropped by 3.2 per cent, 3.2 per cent, 1.7 per cent and 0.8 per cent respectively.

Besides, some investors went for profit taking share sales after the recent rally.

Moreover, a section of investors might be waiting to see how the government implemented its various initiatives taken in recent times to recover the market.

The central bank may create a Tk 10,000-crore refinancing fund for providing loans on easy terms to address the liquidity dearth on the capital market.

The BB took the initiative after a meeting of policymakers in presence of prime minister Sheikh Hasina at her office in Dhaka on January 16 made a six-point proposals, emphasising an increase in fund flow to the market.

Besides, top brasses of four state-run banks at a meeting held on January 16 agreed to increase investment on the capital market following the government directions to do so.

Share prices of Grameenphone advanced by 1.6 per cent on Monday as the telecom operator on Sunday petitioned the Appellate Division to allow it to pay Tk 575 crore in instalments to the telecom regulator instead of Tk 2,000 crore the court earlier directed the company to pay to settle part of a BTRC audit claim.

EBL Securities in its daily market commentary said, ‘Followed by the previous day’s choppy session, the DSE opened lower on Monday and the downward trend continued throughout the mid-session. However last moment buoyancy registered a slight rise in the index as many investors took position on sector-specific issues.’

The turnover on the DSE dropped to Tk 404.58 crore on Monday from Tk 474.14 crore in the previous trading session.

Out of the 356 scrips traded on Monday, 255 declined, 66 declined and 33 remained unchanged.

DSE blue-chip index DS30 dropped by 0.77 per cent, or 35.18 points, to close at 1,541.23 points.

Shariah index DSES shed 0.33 per cent, or 3.5 points, to end at 1,031.72 points.

LafargeHolcim Bangladesh led the turnover chart with its shares worth Tk 35.08 crore changing hands on the day.

Square Pharmaceuticals, Bangladesh Submarine Cable Company, British American Tobacco, SK Trims, SS Steel, Paramount Textiles, New Line Clothings, ADN Telecom and Khulna Power Company were the other turnover leaders.

Northern Jute Manufacturing Company gained the most on the day with a 8.27-per cent increase in its share prices while Bangladesh Steel Re-Rolling Mills performed the worst, losing 9.72 per cent.

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