Bank stocks drive down the market

|| Published: 2020-02-25 14:57:14 || Updated: 2020-02-25 14:57:14

Banks took a beating of 1.7 percent in the sector return board yesterday riding on the central bank’s circular

Stocks continued to tumble yesterday as banking stocks were in free-fall after the central bank issued a circular on capping the lending rate to single digit.

DSEX, the prime index of the Dhaka Stock Exchange, dropped 30 points or 0.6 percent to close the day at 4,621 points.

The Shariah-based DSES index also slid 4 points or 0.3 percent to settle at 1,070 points, while the blue-chip index DS30 lost 20 points or 1.3 percent to stand at 1,551 points.

At the Chittagong Stock Exchange, the benchmark index Caspi gave up 115 points or 0.8 percent to close at 14,149 points.

The market was downbeat at the beginning of trade, but faced a sharp growth after an hour passed. However, this sudden pick up in momentum did not sustain, and the market kept on losing points till the end of the trading session.

Indices fell as banks, one of the large-cap sectors, faced havoc on Bangladesh Bank’s directive to set a maximum 9 percent interest rate on all loans except credit cards from April 1 this year, according to the Daily Market Review of EBL Securities Ltd.

Investors were doubtful about the sectoral giant’s business growth in the near future, and ended up selling off their holdings which resulted in the market fall yesterday, the review added.

Out of the 20 sectors in the DSE, 10 faced price appreciation yesterday while 9 faced correction and 1 remained unchanged.

Among the large-cap sectors, telecom faced the highest loss of 1.9 percent in price, explained by the 2 percent decline of the largest telecom service provider Grameenphone.

The company’s share price has been declining since the Appellate Division ordered Grameenphone to pay the remaining Tk1,000 crore out of Tk2,000 crore from its previous order within the next three months.

Among the other large-cap sectors, banks took a beating of 1.7 percent in the sector return board yesterday, riding on the central bank’s circular. The pharmaceuticals sector lost 0.4 percent and financial institutions lost 0.3 percent price.

Turnover at the DSE rose 5 percent to Tk600.6 crore yesterday, from Tk629.7 crore in the previous session.

On the other hand, turnover at the port city bourse decreased 16 percent from Tk26 crore to Tk21.8 crore yesterday.

The pharmaceuticals sector contributed the highest, 19.4 percent, to the total turnover value, followed by textile stocks adding 16.9 percent, and engineering sector adding 12.2 percent.

BRAC Bank Ltd led the turnover chart with a turnover value of Tk20.1 crore, closing the day at Tk43 per share. The stock was also the worst performer on the losers’ table, shedding 7.7 percent price, following the sector’s overall price fall.

CVO Petrochemical Refinery Ltd was the day’s top gainer after advancing 9.9 percent and closing at Tk112.7 per share, said the DSE website.

Among the company specific news, GlaxoSmithKline (GSK) Bangladesh Ltd has declared 530 percent cash dividend for the year ended on December 31, 2019, according to DSE news.

The company has also reported EPS of Tk81.83 for the year ended on December 31, 2019 as against negative EPS of Tk52.75 for the same period in 2018.

Consequently, GSK Bangladesh Ltd exhibited a 2 percent price appreciation closing at Tk1,881.4 per share yesterday.

Gainers outnumbered the losers as out of the 355 issues traded, 179 advanced, 125 declined, and 51 remained unchanged on the DSE trading floor.

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