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Stocks snap 4-day surge on profit taking

Staff Correspondent | Published: 00:00, Jan 22,2020

 
 

Dhaka stocks dropped on Tuesday after a substantial gain in the previous four sessions as a section of investors rushed to take profits after the price appreciation.

DSEX, the key index of the Dhaka Stock Exchange, lost 0.58 per cent, or 26.13 points, to close at 4,408.10 points on Tuesday after gaining 398 points in the previous four sessions.

The main index fell sharply at the beginning of Tuesday’s session but regained some ground at the middle of the session before ending in the negative trajectory as investors went for profit taking, market operators said.

Referring to the four-day gain, they said that the market had been declining in the last 12 months, and it was the first time in the period that the index gained nearly 400 points in a spell.

The share prices had risen sharply in the four sessions before Tuesday amid moves from the government, the Bangladesh Bank and market intermediaries to stabilise the ailing market, they said.

A meeting of policymakers in presence of prime minister Sheikh Hasina at her office in Dhaka on January 16 made a six-point proposals including increasing of investment of financial institutions on the capital market and providing loan facility to the intermediaries to halt the turmoil on the country’s stock market.

Market operators said the PM’s concern about the stock market powered the rally.

Besides, Bangladesh Bank governor Fazle Kabir on a couple of occasions said that the central bank would extend whatever support it needed to stabilise the stock market while 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.

Market operators said investors were now waiting to see what sort of actions the government would take to revive the market and many investors were still very nervous about investing on the stock market.

The market stabilising moves from the government and the BB came following 12 months of relentless fall in the share prices that caused the DSEX to fall to a 56-month low on January 14.

The turnover on the DSE decreased to Tk 406.80 crore on Tuesday from Tk 494.79 crore in the previous trading session.

EBL Securities in its daily market commentary said, ‘The market started with a declining trend as many investors kept on liquidating their holdings to bag quick profits due to recent price appreciation. However, the index, witnessed a zigzag trend during midsession as investors became active on both sides of the fence.’

Share prices of Square Pharmaceuticals started to fall heavily from the beginning of the day, but the sell-offs lessened shortly after two of its directors declared to buy 6 lakh shares from the public market.

The average share prices of telecommunication, textile, energy and bank sectors dropped by 2.1 per cent, 2.01 per cent, 0.32 per cent and 0.3 per cent respectively.

The average share prices of non-bank financial institution and cement advanced by 3.5 per cent and 1.1 per cent respectively.

Out of the 356 scrips traded on Tuesday, 237 declined, 79 declined and 40 remained unchanged.

DSE blue-chip index DS30 declined by 0.51 per cent, or 7.74 points, to close at 1,507.14 points.

Shariah index DSES shed 0.71 per cent, or 7.30 points, to end at 1,007.64 points.

LafargeHolcim Bangladesh led the turnover chart with its shares worth Tk 27.34 crore changing hands on the day.

Grameenphone, Khulna Power Company, SS Steel, ADN Telecommunication, Beacon Pharmaceuticals, Paramount Textiles, SK Trims and Singer Bangladesh were the other turnover leaders.

Investment Corporation of Bangladesh gained the most on the day with a 9.94-per cent increase in its share prices while Silco Pharmaceuticals performed the worst, losing 9.79 per cent.

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