Stocks recover as gas supply concerns ease

Textile sector dominates weekly turnover of DSE

Stocks edged higher this week, reversing the previous week’s sharp decline, as government assurances on resolving industrial gas supply constraints and renewed regulatory engagement with leading brokers offered some relief to battered investor sentiment.

Market operators said the market finally got some breathing space after a prolonged downturn, with bargain hunting emerging across the board as investors regained confidence following the prime minister’s assurance that the industrial gas supply problem would be resolved immediately.

The benchmark index of the Dhaka Stock Exchange (DSE) staged a notable turnaround in the latter half of the week, rising for three consecutive sessions as investors picked up beaten-down stocks despite lingering concerns over the market’s near-term outlook.

Investor sentiment was also buoyed by the DSE’s move to meet the country’s top 30 brokers to discuss the reasons behind the recent market plunge and explore measures to stabilise the market.

“The government’s assurances over industrial gas supplies, coupled with the regulatory engagement with leading brokers, helped restore some confidence following the recent sell-off,” said a leading stockbroker.

However, he said, the broader market sentiment remained subdued as lingering domestic economic challenges and renewed geopolitical tensions in the Gulf region continue to cloud the outlook for a sustained recovery.

In recent months, prolonged shortages of gas and electricity have weighed heavily on investor sentiment, as factory shutdowns, production disruptions and rising reliance on costly alternative energy sources have raised concerns over industrial output and corporate profitability.

The pressure pushed the DSEX below the 5,400-point mark earlier in the week, its lowest level in nearly four months. However, signs of improved gas supplies to industrial areas offered some relief, helping the market recover in the latter part of the week.

The five-session week saw sharp declines in the first two sessions, followed by a strong recovery over the final three sessions as policy-level developments helped restore some confidence among investors.

The DSEX, the benchmark index of the DSE, rose 17 points, or 0.31 per cent, over the week to close at 5,532, after shedding around 147 points in the previous week.

In its weekly market analysis, EBL Securities said investor sentiment improved following government assurances on resolving industrial gas supply constraints, while regulatory engagement with top brokers also helped restore some confidence among investors.

The market staged a notable turnaround in the latter half of the week as policy-level developments eased some concerns among investors. Broad-based buying interest resurfaced, particularly in beaten-down stocks, allowing the benchmark index to regain momentum for three consecutive sessions, it added.

Despite the recovery, the overall market sentiment remained subdued as domestic economic challenges and geopolitical uncertainties continued to weigh on investor confidence, limiting the scope for a sustained market rebound, said the stockbroker.

The DS30 index, which tracks blue-chip shares, rose 6 points to 2,101, while the Shariah-based DSES index gained 2 points to 1,107.

Price gains in several banking stocks, including BRAC Bank, Pubali Bank, IFIC Bank, Dutch-Bangla Bank and LafargeHolcim, contributed more than 21 points to the weekly rise in the DSEX.

Trading activity remained virtually unchanged, with total turnover amounting to Tk 27.74 billion, compared with Tk 27.71 billion in the previous week.

Average daily turnover edged up 0.1 per cent to Tk 5.55 billion as against Tk 5.54 billion in the week before, indicating little change in overall trading activity.

The textile sector accounted for the largest share of the week’s total turnover at 25.7 per cent, followed by general insurance at 15.6 per cent and banking at 11.1 per cent.

Market breadth remained negative, with 213 issues declining against 147 advancing, while 26 remained unchanged on the DSE.

Most major sectors posted gains, with the banking sector registering the highest rise of around 1 per cent. It was followed by food, power, telecommunications and engineering sectors.

Envoy Textiles emerged as the most-traded stock of the week, with shares worth Tk 990 million changing hands. Sharp Industries, Saiham Textile, Eastern Bank and Paramount Textile followed in terms of turnover.

The Chittagong Stock Exchange (CSE), however, remained in the red. Its All Share Price Index (CASPI) plunged 130 points to close at 14,736, while the Selective Categories Index (CSCX) lost 52 points to 9,021.

Source: The Business Standard