Poor earnings results pull down Dhaka stocks despite Grameenphone surge

Staff Correspondent | Published: 23:00, Feb 23,2020


Dhaka stocks dropped for the second day on Sunday despite a substantial gain in the share prices of Grameenphone as investors continued selling most of the other shares to book profits amid poor earnings reports by a number of heavyweight companies.

DSEX, the key index of Dhaka Stock Exchange, lost 0.72 per cent, or 34.24 points, to close at 4,698.89 points on the day after losing 24.86 points in the previous session.

Before the two-day decline, the index had gained 373 points in the previous nine sessions.

The core index gained 30 points within a minute on Sunday as the shares of Grameenphone opened the session with the maximum allowable surge on a single day, market operators said.

However, the index started falling soon after and ended the day in the negative territory as investors kept selling shares amid poor annual disclosures by a number of large capitalised companies, they said.

The media reported that the largest capitalised company, Grameenphone, on Sunday paid Tk 1000 crore to the Bangladesh Telecommunication Regulatory Commission over a disputed audit claim in line with its earlier decision made on Saturday.

Market operators said that investors felt relief as they anticipated that prolonged tussle between the Bangladesh Telecommunication Regulatory Commission and the mobile company over the BTRC audit claim involving Tk 12,579.95 crore would be mitigated soon.

GP closed the session near to the upper limit of the circuit breaker, by 8.11 per cent or Tk 24 to Tk 319 per share on Sunday.

The audit dispute reduced GP’s share price to Tk 231.4 each on January 15 this year from Tk 500 per share in April, 2018, sending its investors on the edge.

The massive gain in the share prices of the largest capitalised company could not save the key index from negative ending as the share prices of more than two-thirds of the traded companies declined on the day.

Market operators said that a section of investors continued selling shares for profit taking or moving to safer and profitable securities.

A number of large capitalised companies declared poor annual earnings that also disheartened investors, they said.

Prime Insurance declared no dividend for 2019. The DSE on Sunday sent the company to the ‘Z’ category that groups low-profile companies.

Profits of British American Tobacco Company, IDLC Finance and United Finance dropped in the year ended December 30 last year compared with that in the previous year.

Banks will declare dividend and annual financial reports soon, market operators said.

Moreover, investors might be concerned about the banks’ business growth after implementation of single-digit lending rate from April 1.

The market witnessed some momentum in recent days after the initiative from the Bangladesh Bank to stabilise it.

The central bank on February 10 issued a circular allowing each schedule bank to borrow up to Tk 200 crore from it with low interest rate to invest in the stock market.

EBL Securities in its daily market commentary said that banks, financial institutions and individuals did not feel secure to pour money into the market despite the BB’s special fund declaration.

GP, the largest stock by capital, gained Tk 3,240.7 crore in market capitalisation on Sunday, it said.

The average share prices of all the sectors except telecommunication dropped on the day.

Share prices of textile, energy, bank and non-bank financial institution declined by 1.6 per cent, 1.0 per cent, 0.8 per cent and 0.1 per cent respectively.

The turnover on the DSE dropped to Tk 668.45 crore on Sunday from Tk 770.60 crore in the previous trading session.

Out of the 356 scrips traded on Sunday, 263 declined, 70 advanced and 23 remained unchanged.

DSE blue-chip index DS30 shed 0.06 per cent, or 1.04 points, to close at 1,591.75 points.

Shariah index DSES lost 0.34 per cent, or 3.81 points, to end at 1,085.99 points.

Grameenphone led the turnover chart with its shares worth Tk 47.02 crore changing hands on the day.

Orion Pharmaceuticals, SK Trims, Summit Power, Orion Infusions, Confidence Cement, Golden Harvest Agro Industries, Bangladesh Steel Re-Rolling Mills, VFS Thread Dyeing and LafargeHolcim Bangladesh were the other turnover leaders.

Orion Infusions gained the most on the day with a 10-per cent increase in its share prices while Prime Insurance Company performed the worst, losing 22 per cent.

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