Market analysis: Will stocks rebound this week?

The key index of the Dhaka Stock Exchange fell nearly 100 points or 1.36 percent to end the week at 7,243 on Thursday, the last trading day of the week.

Weekly turnover and trade and market capitalisation all dropped in the week forcing some investors to panic as they hardly saw it in the last several months.

Is it an unusual situation?

Prof Abu Ahmed, a capital market expert and former chairman of economics department at Dhaka University, declined to term the trend in the capital market as abnormal.

“Our investors are more interested in the index. When the index goes down, their notion is that the market is getting worse,” said Ahmed.

“We have to get out of this idea,” Ahmed told the Business Insider Bangladesh on Saturday.

He said the transaction is still good. As a result, it is unreasonable to call the overall capital market bad just because of indices and transactions, he added.

DSE began the week on October 10 with Tk 582,124 crore market capitalisation. But the market lost Tk 2,012 crore at the end of the week on October 14.  

Daffodil Computers lost the most in the last week as the company’s share price fell by 12.93 percent, followed by 11.49 percent by Unique Hotel and Resorts.

Of the other stocks, prices of Envoy Textile, HR Textile, Silva Pharmaceuticals, Fareast Finance and Investment, Central Pharmaceuticals, Active Fine Chemicals and Matin Spinning dropped the most.

Shares worth Tk 9,062 crore were traded on the DSE in the last week, down by Tk 3,662 crore or 28.78 percent from that of a week ago.

Among other indices, the shariah-based DSES fell by 28.35 points or 1.78 percent and the blue-chip DSE-30 shed 48.25 points, or 1.74 percent in the last week.

AFC Capital’s Chief Executive Officer Mahbub H Mazumder said the market had some corrections in the week after a steady rise.

“The index has been rising for a long time. A slight fall from there is part of the market correction. There is no reason to worry about it,” he told the Business Insider Bangladesh.

Earlier, when the index started declining, ordinary investors panicked and sold their shares off, he said.

“But now the situation is not like that anymore. Many have held shares in this market for better profits. So, the turnover declined,” he added.