DSE slips as cautious investors remain on sidelines

Weak participation and uncertainty over utility shortages, corporate earnings and regulatory issues kept investors cautious.

The Dhaka Stock Exchange (DSE) edged lower today (9 September) as cautious investors remained on the sidelines amid uncertainty over the market’s direction, while concerns over the country’s ongoing gas and electricity crisis continued to weigh on sentiment.

The DSEX, the broad index of the DSE, fell 1 point to settle at 5,538. The blue-chip DS30 index shed 5 points to close at 2,103, while the Shariah-based DSES index gained 1 point to settle at 1,111.

Turnover fell nearly 12% to Tk520 crore from Tk590 crore in the previous session, reflecting subdued investor participation. Of the 387 securities traded, 165 advanced, 150 declined and 72 remained unchanged.

Market participants said uncertainty over the economy and corporate operations has kept investors cautious, particularly as ongoing gas and electricity shortages continue to disrupt industrial production. Concerns over the impact of the utility crisis on corporate earnings have discouraged investors from taking fresh positions.

Many investors are instead waiting for clearer signals on the market’s direction and upcoming corporate earnings before increasing their exposure, market participants said.

Recent intervention by the stock exchange in large buy and sell orders has also unsettled some major individual investors, they said. Uncertainty over such interventions has prompted some investors to adopt a wait-and-see approach.

Meanwhile, recent inspections and investigations by the stock exchange at several brokerage houses have further weighed on market sentiment, according to market participants.

The DSE Brokers Association of Bangladesh (DBA) has urged the stock exchange to avoid unnecessary harassment of brokerage houses during such exercises and maintain a balanced approach so that inspections and investigations do not disrupt their normal operations.

EBL Securities, in its daily market commentary, said the capital market remained range-bound, with the indices showing largely flat momentum throughout the session. Large-cap stocks remained under pressure amid subdued participation as investors stayed cautious about the market outlook.

The brokerage also said investors were closely watching for fresh positive catalysts that could support a sustained recovery, while uncertainty over the upcoming earnings season continued to weigh on sentiment.

Despite more stocks advancing than declining, weakness in several large-cap stocks kept the benchmark index in negative territory.

On the sectoral front, Textile stocks accounted for the largest share of turnover at 31.2%, followed by General Insurance at 13% and Banking at 11.9%.

Textile stocks posted the highest sectoral gain, rising 2%, followed by Mutual Funds at 1.6% and Jute at 1.1%. On the other hand, Ceramic stocks declined 1.4%, Life Insurance fell 0.7% and Financial Institutions lost 0.3%.

ICB AMCL Sonali Bank Limited 1st Mutual Fund was the top gainer, rising 10%. Sena Insurance gained 9.98%, while Saiham Textile Mills advanced 9.76%.

SK Trims & Industries was among the biggest losers, falling 5.11%. Metro Spinning declined 3.81%, while Golden Son lost 3.73%.

Envoy Textiles led the turnover chart, followed by Sharp Industries and Saiham Textile Mills.

The Chittagong Stock Exchange (CSE) also ended lower on Wednesday. The CASPI index fell 59.1 points to settle at 14,869, while the CSCX declined 42.9 points to close at 9,088. Turnover at the CSE stood at Tk87.27 crore.

Market observers said the DSE may continue to see cautious trading in the near term unless concerns over utility shortages, corporate earnings and market-related regulatory issues begin to ease.

Source: The Business Standard