Stocks fall on weak corporate declarations

Staff Correspondent | Published: 22:42, Feb 01,2020


Dhaka stocks slid in the past week after gaining significantly in the week before as investors went for share sales amid disappointing corporate declarations by a number of companies, including the Investment Corporation of Bangladesh, Grameenphone, ACI and MI Cement.

DSEX, the key index of the Dhaka Stock Exchange, lost 0.98 per cent or 44.24 points, to close at 4,469.66 points on the last trading session of the past week on Thursday, after gaining 364.06 points in the week before.

Before the gain in the week before the past week, the DSEX plunged by 309.5 points in two weeks.

The core index lost in most of the sessions as the investors became cautious after a number of large capitalised companies reported poor financial results.

Over the past week, the Investment Corporation of Bangladesh, ACI Limited, MI Cement and Standard Ceramics declared losses in the quarter ending in December 2019.

ACI Limited and ICB declared losses worth Tk 12.2 per share and Tk 1.96 per share respectively for the July-December 2019 period against slim profits reported in the same period of the previous year. 

MI Cement declared a loss of Tk 1.80 per share in the September-December 2019 period against Tk 0.31 earnings per share in the same period in the previous year.

Share prices of ICB, MI Cement and ACI plunged by 12.51 per cent, 10.10 per cent and 8.5 per cent respectively over the past week.

Share prices of Grameenphone sank by 5.2 per cent in the week as the company announced a total of 130-per cent cash dividend for 2019 against the 280-per cent cash dividend declared for the previous year.

Profits of Meghna Petroleum, Padma Oil, Jamuna Oil, Bangladesh Steel Re-Rolling Mills and BSRM Steel plunged in the July-December 2019 period compared with earnings reported for the same period in 2018.

EBL Securities in its weekly market review said, ‘Most of the companies’ earnings have failed to meet investors’ expectations. Consequently, a section of investors liquidated their holdings which had an adverse effect on the index.’

Moreover, the investors were yet to see any progress of the recent government initiatives taken to stabilise the market which dampened the investors’ enthusiasm seen in the week before.

A policymakers’ meeting in presence of prime minister Sheikh Hasina at her office in Dhaka on January 16 proposed that the government should create mechanisms to ensure increased participation of financial institutions and to provide funds to market intermediaries.

The government became active after the core DSE index hit a 56-month low on January 14 due to relentless falls in share prices in the last 12 months.

Average share prices of non-bank financial institutions, telecommunication, energy and bank sectors dropped by 7.4 per cent, 5.1 per cent, 2.4 per cent and 1.8 per cent respectively.

Out of the total 358 scrips traded over the past week, the prices of 218 declined, 118 advanced and 22 were unchanged.

The daily average turnover on the DSE dropped to Tk 445.09 crore last week compared to Tk 453.15 crore in the week before.

Shariah index of the bourse DSES declined by 0.7 per cent, or 7.21 points, in the past week and closed at 1,028.29 points.

DS30, the blue-chip index of the DSE, shed 1.26 per cent, or 19.38 points, and closed at 1,524.04 points.

LafargeHolcim Bangladesh led the turnover chart with shares worth Tk 188.55 crore changing hands last week.

ADN Telecom, Square Pharmaceuticals, Paramount Textiles, SS Steel, Bangladesh Submarine Cable Company, Grameenphone, British American Tobacco, Khulna Power Company and Pioneer Insurance Company were the other turnover leaders.

VFS Thread Dyeing scored the most in the past week with its share prices increasing by 18.13 per cent while BSRM Steel lost the most with a 13.22-per cent decline in its share prices.

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