The Dhaka Stock Exchange (DSE) witnessed sluggish trading activity, leading to a decline in the benchmark index in the first week of the new year.
Market sentiment has yet to rebound from its prolonged depressed state in the absence of any strong positive catalyst to revive investor confidence.
Despite a cautious sense of optimism among investors surrounding the finance adviser's meeting with capital market stakeholders, such optimism failed to sustain due to a lack of any concrete commitments that can restore the market's waning momentum.
Moreover, concerns over higher inflation following the potential increase of VAT on certain goods and services also triggered further caution over the market's momentum.
DSEX index gains 4.7 points in early trading
Investors remained largely reluctant to make new investments in stocks due to the bleak market outlook amid the confidence crisis, said a leading stockbroker.
Consequently, the market witnessed a dominant sell pressure and three trading days ended lower while two sessions managed to close positive.
DSEX, the broad index of the Dhaka Stock Exchange, lost 5.2 points, or 0.1%, to settle at 5,194 points. Investor participation in the market also declined by 0.4% to Tk 3,466 million as compared to Tk 3,481 million in the previous week.It gained 15 points in the week before.
DSEX index down by 5.77 points, prices of 214 stocks drop
The blue-chip DS30 index, a group of 30 prominent companies, also fell nearly 7 points to 1,924. However, the DSES index, which represents Shariah-based companies, rose almost 7 points to close at 1,162.
Investors were mostly active in the Bank sector (17.9%), followed by the Pharma sector (13.7%) and the Engineering sector (9.1%). Sectors ended in mixed with the IT sector (4.3%) being the highest gainer and the Ceramic sector (2.8%) being the biggest loser.
This week, the blue-chip stocks having significant influence on the DSE broad index experienced correction. Price erosion of selective stocks such as Islami Bank, Al-arafah Islami bank, BAT Bangladesh, BRAC bank and LafargeHolcim jointly accounted for a 22-point fall in the key index.
Islami Bank, which plunged 3.54 percent this week, contributed a 12.9-point fall to the key index alone. The bank's stock closed at Tk 49.10 on Thursday.
Al-Arafah Islami Bank, another blue chip stock, also accounted for 3.10 point fall of the prime index while BAT Bangladesh and Brac Bank accounted for 3.1 points and 2.5 points respectively to the key index.
Turnover, a crucial indicator of the market, stood at Tk 1733 crores this week, up from Tk 1392 crores the previous week, as this week saw five trading days instead of previous week's four.
Consequently, the average daily turnover dropped by 0.44 percent to Tk 346 crores, down from Tk 348 crores in the previous week
Saiful Islam, president of DSE Brokers Association of Bangladesh (DBA), told UNB that the regulator has to take effective initiatives to boost investors’ trust.
He said the general investors lost the trust in the market due to the long negligence of building a sustainable stock market.