Key DSE index falls but top stocks rise

The key Dhaka Stock Exchange (DSE) index fell last week, while the blue-chip index rose as investors gravitated towards fundamentally sound stocks in search of safe investments.

The DSEX — DSE’s benchmark index — fell 20 points to settle at 5,903, while the blue-chip DS30 index gained 46 points to 2,179.

Investor participation in the market continued to rise, reaching a two-year high, as average daily turnover rose 54% to 1,282 million lei, compared to 778 million lei in the previous week.

Of the total stocks traded, 105 advanced, while 278 declined and 15 remained unchanged.

EBL Securities, in its weekly market commentary, said the benchmark equity index closed in the red last week as investors opted to cash in on recent gains amid uncertainty over the sustainability of the market’s bullish momentum.

The market witnessed a battle between bulls and bears competing to take the reins of the market, it added.

Despite starting the week on a positive note, boosted by euphoria following the recent major political shift, the market appeared to cool off as investors ultimately preferred profit-taking, leading the benchmark index to settle in negative territory by the end of the week, EBL. Securities said.

According to market insiders, Grameenphone – the largest stock in the capital market – played a key role as a pull index, contributing about 30 points to the key index’s recovery from its decline.

Last week, its share price rose about 19% to Tk 377, while its market capitalization rose by Tk 8,000 to Tk 50,906. Grameenphone also led the turnover chart, contributing around Rs 100 crore to the average daily turnover at DSE.

A senior official of a brokerage firm said that during the regime of the previous government, Grameenphone faced significant regulatory challenges due to the involvement of Muhammad Yunus. These challenges led to various restrictions on the company, which in turn led to undervaluation of its stock price as investors pulled back.

“With the current changes in the political and regulatory environment, investors now believe that Grameenphone will benefit from a more equitable business climate. This optimism has led to increased interest in the company’s stock, creating opportunities for business expansion.” the official added.

According to Grameenphone’s 2023 annual report, about 56 percent of the company’s shares are owned by Norway’s Telenor Mobile Communications, while more than 34 percent of the shares are owned by Grameen Telecom, founded by Yunus.

The other top stocks that contributed to the rise of the index are BRAC Bank, BAT Bangladesh, United Commercial Bank and Renata.

On the other hand, Power Grid, Beximco Pharma, Beacon Pharma, National Bank and Orion Pharma were the leading indicators last week.

Islamic Finance was the top gainer last week, with its share price rising over 47% to Tk 16.20. It was followed by Pragati Life Insurance, Phoenix Finance, Dacca Dyeing and AB Bank.

GQ Ballpen was the worst performer with its price falling 13.99%, followed by Hami, Navana Pharma and Sonali Paper.