In the past week’s trading activities, the Dhaka Stock Exchange (DSE) saw a notable increase in its main index, accompanied by a rise in overall market transactions. These trends have been partially driven by a positive shift in the banking sector shares.
Over the five trading days till Thursday (Feb. 27), the DSE's main index rose by 46.93 points. Trading, which concluded on February 20 at 5,200 points, reached 5,247 points on February 27.
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Along with the main index’s growth, the average trading volume in Dhaka’s stock market saw an uptick. Last week, the average trading volume increased from Tk 470 crore to Tk 518 crore, marking a more than 10% rise over just five trading days. This surge is attributed to the growing confidence of investors in long-term investments, particularly in the banking sector. The collective share prices of 36 listed banks jumped by 19.55%.
Banking Sector Recovery
As the prices of shares in the banking sector have risen, transaction volumes have also increased. While brokerage houses and investors acknowledge that it is still uncertain whether the banking sector will fully recover within a week, the recent positive movements have sparked renewed hope for the sector.
When compared to last week, the volume of banking sector share transactions has surged by nearly 60%. Among the banking institutions that saw trading, 22 experienced price increases, 10 saw declines, and four remained unchanged.
Positive Movement in Financial Institutions
In addition to the banking sector, the share prices of financial institutions also witnessed positive movement. Of the 23 listed financial institutions, 15 saw their prices rise, five saw declines, and three remained stable.
Over the last five trading days, financial institution share prices have surged by over 105%, with the trading volume increasing by 86%.
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Meanwhile, while the general insurance sector’s share prices rose by over 68%, the life insurance sector experienced a 19.61% drop in prices.
Telco struggles
The telecom sector, on the other hand, witnessed significant price drops. During the week, telecom sector shares fell by more than 44%. On the final trading day, shares of the listed telecom company Grameenphone fell by 4.5%, while Robi’s shares saw a slight dip of 0.35%.
Blue-Chip Companies and SME Sector
Despite the rise in the main index, the index of selected blue-chip companies fell by 4 points. Conversely, the Shariah-based DSES index rose by 4 points, while the SME sector’s shares continue to struggle. The index of small and medium-sized enterprises, DSMEX, fell by 18 points.
Block Market Highlights
In the block market, the highest number of shares were sold by Bich Hatchery Limited, with each share currently priced at Tk 109.40. Coming in second for block market sales is Jamuna Bank, where each share is priced at Tk 19.60.
Most Active Stocks
The most active stock in the market last week was Orion Infusion Limited, with Grameenphone taking second place.
Top Performers and Decliners
S Alam Cold Rolled Steels Limited, a B-category company, secured the top spot on the DSE with an impressive 53.25% return. On February 20, its shares were traded at Tk 15.40, and by the final trading day, they had risen to Tk 23.60.
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On the other end of the spectrum, Sunlife Insurance Company Limited saw a nearly 10% drop, with its share price falling from Tk 75 on February 20 to Tk 68 by the end of the week.
Stock Market Shrinkage and Margin Loans
Between price fluctuations, a recent report from the DSE’s brokerage association, DBA, revealed that the size of the country’s stock market has shrunk by 37.6% over the past 16 years.
In addition, over the last 15 years, 134 new companies have been listed on the stock market, with 42 companies now in the Z-category. Of the 350 listed companies, 103 are now in the Z-category.
Investor Concerns: Margin Loans
In this volatile market, margin loans continue to be a major concern for investors. Although a task force has been formed to address this issue, a long-term solution remains elusive.
According to the combined reports from brokerage houses, the total margin loans in the stock market have surpassed Tk 20,000 crore, with Tk 9,700 crore of that amount attributed to negative equity.
With the current positive outlook of the index, market experts believe that if investors can be freed from margin loans, confidence in the market could be restored in the near future.