Profit taking, GP push stocks down

[ Last Page ] 2010-07-03

Profit taking, GP push stocks down

Profit taking and fall in Grameenphone shares took shines off Dhaka stocks in the shortened week that ended Wednesday, the last week of just concluded financial year. The benchmark DSE (Dhaka Stock Exchange) General Index (DGEN) closed the week at 6153.68, shedding 0.58 per cent or 36.17 points. The broader All Shares Price Index (DSI) was down by 0.45 per cent or 22.89 points to 5111.63, while the DSE-20 blue chip index gained slightly 0.10 per cent or 3.67 points to 3650.04. Investors took profit on some banking stocks ahead of half-yearly closing, contributing to fall of the market, according to the stockbrokers. Other major factors that had an adverse impact on investor sentiment during the week included sliding in share prices of GP and reaction to the changes in the margin lending rules, an investment bank executive said. But the trading activity was higher as the average daily turnover was recorded at Tk 16.63 billion, showing an increase of 12.50 per cent despite shortening trading days to four from five due to the bank holiday Thursday. Financial stocks, including banks and leasing or non-banking financial institutions (NBFIs) dominated the week both in value and volume. GP, the lone listed company of the telecommunications sector, came down Tk 240. Its slide started in April, with a short respite around the dates of the company's annual general meeting. Ones the issue traded at Tk 395. "GP's pre-IPO placement of shares, which is equal to the size of the current public float, enters into trading from fourth quarter of this year after expiry of the lock-in period. This anticipation led the selling pressure by institutional investors," said BRAC-EPL, an investment bank, in its weekly market commentary. It said, another important development during this week was the reaction to the changes in the margin lending rules. On June 20, the Securities and Exchange Commission ordered merchant banks and stockbrokers not to lend to purchase equities with PE ratio above 40. But volumes in the market went up as sectors with lower PE ratios benefited from the securities regulator's price curbing measures. Out of four trading sessions, the market closed positive in the first session Sunday defying a nationwide strike called by the main opposition party with investors executing trade over mobile phones. Rahima Food was the largest gainer posting a rise of 36.18 per cent during the week. It was followed by Kohinoor Chemicals, Prime Textile, 4th ICB Mutual Fund, Exim Bank, United Leasing, Miracle Industries, City Bank, and Peoples Leasing and Financial Services. Progressive Life, Eastern Lubricants, Modern Industries, Rupali Life Insurance Company Limited, Quasem Silk, Purabi General Insurance, Samata Leather, Prime Islami Life Insurance and Meghna Life Insurance were the week's prominent losers. Titas Gas was the top turnover leader with shares worth Tk 4.38 billion changing hands. Other turnover leaders were Beximco Limited, AB Bank, Shahjalal Islami Bank, Premier Bank Ltd, Lankabangla Finance Company, Standard Bank Limited, NBL, Peoples Leasing & Fin Services and Islami Bank.