Business News

Stocks fall on cautious trading ahead of monetary policy

Dhaka stocks inched down on Sunday with plunge in turnover as many of the investors, especially institutional ones, opted to go slow ahead of the announcement of the monetary policy by Bangladesh Bank on Wednesday. The key index of Dhaka Stock Exchange, DSEX, finished at 5,775.59 points, shedding 0.11 per cent or 6.87 points. Turnover on the bourse dropped to Tk 477.96 crore on Sunday compared with that of Tk 636.63 crore in the previous trading session on Thursday. Average daily turnover on the bourse was above Tk 1,000 crore in the past week. Market in line with the previous trading session started positive with the key index of the bourse increasing by 15 points within 45 minutes of trading, stockbrokers said. After remaining positive till the mid trading session, the market started to lose ground gradually as majority of the investors opted to go slow, they said.
Investors became cautious on the trading floor as the Bangladesh Bank is scheduled to declare monetary policy statement for the next six months on Wednesday this week, stockbrokers said. ‘Investors usually become cautious ahead of half-yearly monetary policy announcement by BB. They want to see whether the central bank goes for a contractionary, expansionary or a cautious monetary policy. The money flow in the capital market has a link with the monetary policy,’ said a stockbroker. He said that institutional investors became particularly inactive resulting in slump in turnover. Besides, profit booking by a section of investors during the second half of the session was among other reasons behind the negative ending of the session, he said. All the major sectors finished almost flat during the trading session against negative ending of majority of the sectors. Telecommunication, energy and bank registered marginal positive movement of 0.1 per cent and 0.1 per cent and 0.05 per cent respectively. On the other hand, cement, non-bank financial institutions and real-estate sectors declined 0.70 per cent, 0.50 per cent and 0.10 per cent respectively.
Of the 328 companies and mutual funds traded, 110 advanced, 163 declined and 55 remained unchanged. ‘Market continued to move side-ways as investors opted for cautious stance,’ IDLC Investments said in its market commentary. ‘As a result, overall activities remained dull, causing total turnover to decline further by 24.9 per cent to Tk 4.8 billion from that of on Thursday last week,’ it said.
‘Index went through minor fluctuation up to 12pm,’ said LankaBangla Securities in its market report. ‘After that, index fell at a steady manner and closed red at 5,775.60 points,’ it said. DS30, the blue-chip index of DSE, finished almost flat at 2,121.17 points, declining just 0.02 per cent or 0.62 points. The Shariah index of the bourse, DSES, fell by 0.17 per cent or 2.35 points, to close at 1,311.33 points. IFAD Autos led the turnover chart on the day with its shares worth Tk 22.48 crore changing hands. Mercantile Bank, Navana CNG, LankaBangla Finance, Ratanpur Steel Re-Rolling Mills, Paramount Textile, Aman Feed, Confidence Cement, Simtex Industries and ACI Formulations were other turnover leaders. Safko Spinnings Mills gained the most, adding 5.96 per cent, while Sonargaon Textiles was the worst loser, shedding 5.22 per cent.

Source: The New Age, 24.07.2017