Stocks at 54-week high amid increased turnover
Turnover chart was dominated by pharmaceuticals, banking, and engineering
Investors' optimism coupled with inflow of fresh funds fuelled the major stock indices to close at a 54-week high on Sunday.
DSEX, the benchmark index at the Dhaka Stock Exchange (DSE), began the week with 1.65% gain to reach 5,094 – highest since September 2 last year.
Investors' increased participation helped the premier bourse register a 30% rise in daily turnover to Tk1,330 crore on Sunday.
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Like many other market research teams, brokerage firm EBL Securities said the key demand was for sector-specific stocks.
Investors' confidence in the securities regulator's positive actions along with favourable economic indicators helped the market go up, the review added.
Sideliner investors are also pouring fresh money into the bullish stock market and the forthcoming year-end profit disclosure is in their minds, observed analysts at the top-tier brokerage firm.
The Bangladesh stock market began to rise in June from its multi-year low following leadership change in the Bangladesh Securities and Exchange Commission, monetary easing, and better than expected economic recovery from the pandemic shock.
DSEX has risen more than 35% in the last four months to net a year-to-date gain of 14.5%, which is more than 16% for the blue-chip index DS30 and more than 17% for Shariah index DSES.
According to the daily market review of brokerage firm UCB Capital Ltd, average price to earnings (PE) ratio of DSE touched 15.0 on Sunday while United Securities Ltd calculated DSE average PE at 13.46 as they eliminated loss making companies.
PE ratio is the most commonly used valuation indicator that indicates how pricey a stock is compared to its annual profit per share. The lower the ratio is, the cheaper is the stock considered by investors.
At the extreme of the last market trough in May-June, DSE average PE ratio bottomed at below 10.
DSE stocks are trading at a price level 1.77 times higher than their average net asset value, calculates United Securities.
DSE's average dividend yield is 2.97% that indicates investors are getting annual cash dividends equal to nearly 3% of their current investment value.
In the DSE, against the gain of 226 securities, 106 lost price and 25 remained unchanged on Sunday.
Turnover chart was dominated by pharmaceuticals, banking and engineering sectors that combinedly contributed over 40% to the day's trades.
Banks topped the chart of gaining sectors with nearly 4% rise in market capitalisation while fuel and power, non-banking financial institutions, service and real estate, ceramic, mutual funds, and textile sectors followed through.
Paper and printing, miscellaneous, and IT stocks faced correction after the recent positive price movement.
The port city bourse Chittagong Stock Exchange also registered a winning session on Sunday.
