Only pharma, telecom sectors gain market capital during sellers’ week

The stock market has passed another week under sellers' control, and each of the sectors, except for pharmaceuticals and telecom, has lost market capital. 

Following the previous week's price fall due to a show-cause notice served by the telecom regulator on Grameenphone, this week saw the telecom sector recover a part of its lost share prices, helping it to stay in the green zone. 

The pharmaceuticals sector managed to add 0.2 percent to its total market capital due to its positive outlook.   

Otherwise, the four-day trading week would have been all red. 

Stock indices at both bourses of the country lost over 1 percent over the week, but the Chittagong Stock Exchange (CSE) witnessed a bigger week on week fall because its major indices kept losing points till Thursday. 

Despite Wednesday's 1.51 percent fall of the broad-based DSEX index, the Dhaka Stock Exchange (DSE) found all its indices going green on the closing day of the week. 

Ultimately, the DSEX lost 1.6 percent over the week, while its counterpart at the port city bourse, CSCX, lost 1.8 percent. 

DS30, the blue-chip index of Dhaka's bourse lost 1.2. percent over the week, closing at 1,737. 

At the DSE, average daily trading volume increased 6.8 percent to reach Tk421 crore in the down days. Analysts said that this indicates aggressive selling pressure. 

Against weekly gains of only 60 scrips, 281 lost value at the DSE, while the prices of 14 listed securities remained unchanged. The number of winners and losers at the CSE stood at 54 and 232, respectively. 

Overall, the fuel and power sector lost 8.85 percent market capital, followed by 5.02 percent in the textile sector, 4.67 percent in general insurance, and 4.63 percent in mutual funds and others. 

Among the losers, no sector lost less than 1 percent of its market capital. 

Broad market indicators suggest the market is getting cheaper as the average price earnings (PE) ratio of the DSE, based on annual earnings per share, has come down to 14.37. 

Trailing PE, that uses average earnings of companies in the last four quarters, has come down to 13.55. 

On the other hand, average price to book value ratio of the market is now at 1.96, meaning securities are priced at less than double the rate of their net asset values. 

Speaking to The Business Standard, Rakibur Rahman, a director at the DSE said: "It was a bad week for stock market investors. We need to strengthen investors' confidence, increase fund flow and supply of high quality stocks to come out of the downward spiral."

The Bangladesh Securities and Exchange Commission, along with the finance ministry and other relevant authorities, are planning to sit together on Monday to discuss the stock market. 

Rakibur, along with thousands of other investors and market professionals, hope that something good may come out of the meeting.