Dhaka stocks edged up on Monday after a plunge in the previous session as some investors went for buying shares of pharmaceutical companies while others offloaded shares ahead of the beginning of Robi’s initial public offering subscription.
The subscription of Robi’s Tk 523.79-crore IPO will begin today. The IPO of the second largest mobile operator in the country is set to be the largest IPO in the country’s capital market.
Mutual fund and insurance sectors continued dominating the market as the two sectors occupied 50 per cent of Monday’s total turnover that destabilised the market, market operators said.
DSEX, the key index of the Dhaka Stock Exchange, added 0.07 per cent, or 3.68 points, to close at 4,871.41 points on Monday after losing 37.29 points in the previous session.
The core index was choppy throughout the session as investors were cautious, market operators said.
They said that many investors remained confused about the market trend as the market has been dominated by low-profile companies of insurance and mutual sectors for a couple of months.
Both the sectors drew huge amount of funds as a large number of investors, ditching other companies’ shares, moved to the sectors after observing surges in share prices of the companies of the sectors, they said.
They said that Bangladesh Securities and Exchange Commission chairman Shibli Rubayat-Ul-Islam said on several occasions that mutual funds would be better and would provide more than 10 per cent returns soon that contributed most to the recent surge in unit prices of mutual funds.
Mutual funds which have 1 per cent contribution to the total market capitalisation at the DSE now lead the turnover on the market.
Mutual fund and insurance sectors registered 33.17 per cent and 16 per cent of the day’s total turnover respectively.
However, both the sectors dropped on Monday for profit booking.
Due to the overflow of IPOs and dominance of just two sectors, the market has remained depressed as shares of large capitalised companies failed to attract the investors’ attention.
The recent downward trend on the market sent the share prices of around 70 companies to their floor prices.
The BSEC introduced the floor price system on March 19 to check free-fall on the market amid the COVID-19 outbreak in the country.
Average share prices of pharmaceutical, food and telecommunication sectors advanced by 1 per cent, 0.4 per cent and 0.1 per cent respectively that saved the market from fall.
EBL Securities in its daily market commentary said, ‘The volatility on the market was observed as most of the investors offloaded their holdings due to profit booking in major sectors while bargain hunters favoured new positions in the mutual funds’ units due to the rally since past few sessions.’
‘Such volatility might be frequent on the market until there is some clarity over the consequence of the novel coronavirus pandemic in the days ahead,’ it said.
The turnover on the DSE plunged to Tk 790.15 crore on Monday compared with that of Tk 1,197.72 crore in the previous trading session.
DSE blue-chip index DS30 gained 0.01 per cent, or 0.27 points, to close at 1,696.8 points on the day.
Shariah index DSES increased by 0.75 per cent, or 8.37 points, to settle at 1,122.97 points.
Of the 357 scrips traded on the DSE on Monday, 153 declined, 111 advanced and 86 remained unchanged.
Beximco Pharmaceuticals led the turnover chart with its shares worth Tk 45.65 crore changing hands on the day.
Square Pharmaceuticals, Asia Insurance, AB Bank 1st Mutual Fund, Eastern Insurance, Exim Bank 1st Mutual Fund, Grameen Scheme Two, Trust Bank 1st Mutual Fund, ADN Telecom and Quashem Industries were the other turnover leaders on the day.
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