Stocks stay afloat riding on small

FE REPORT

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Stocks stayed afloat for the second straight session on Wednesday as investors chased rumour-based, low-performing junk shares once again in anticipation of quick gains.

Investors are turning to junk shares instead of fundamentals in hopes of higher returns from lower investments as the political tension eased to some extent, said a stockbroker.

CVO Petrochemical, which is suffering losses and failed to declare a dividend for 2022, occupied the top-gaining spot.

The stock of the Chattogram-based company, having a face value of Tk 10, surged 9.88 per cent to close at Tk 180.1 on Wednesday.

CVO Petrochemical suffered a loss of Tk 73 million in FY22, while the company incurred Tk 17 million in losses in the nine months of this fiscal year through March.

Another loss-making company, Libra Infusion, which had not published financial statements since March 2021, emerged as the second-highest gainer with a 6.76 per cent rise.

Some other low-performing companies such as GQ Ball Pen, Metro Spinning, Emerald Oil Industries, C&A Textile, Northern Jute Manufacturing, Meghna Pet Industries and Generation Next Faison were also on the list of the top advancers.

The market movement was led by particular small-cap and junk stocks as investors sought to take positions in quick rallies in anticipation of quick gains.

However, these stocks have little impact on the market index. Thus, DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), went up only 4.23 points and settled at 6,343. DSEX added more than 18 points in the past two trading days.

The market opened higher and the key index rose more than 10 points in the first half of the session, while the latter half eroded most of the early gains due to profit booking tendency among cautious investors.

Sea Pearl Beach Resorts, Square Pharma, CVO Petrochemical, Emerald Oil and Green Delta Insurance jointly added 7 points to the DSEX, according to amarstock.com, a market data analyst.

The DS30 Index, which consists of blue-chip companies, saw a fractional gain of 0.28 points to 2,161 and the DSES index, which represents Shariah-based companies, rose 1.94 points to 1,375.

The daily turnover rose 17 per cent to Tk 6.39 billion - up from Tk 5.46 billion the previous day.

The general insurance sector kept its dominance in the turnover chart, capturing 18.4 per cent of the day's total turnover, followed by food (13.5 per cent) and life insurance (12.7 per cent).

Market operators said the allure of potential quick gains prompted a section of investors to seize opportunities in specific junk stocks in anticipation of a quick gain.

"Stocks managed to stay afloat for the second consecutive session as opportunistic investors continued to seize quick-gain opportunities in sector-specific issues following the recent corrections in the market," said EBL Securities.

The market remained upbeat throughout the session, withstanding volatility owing to the continued buying interest in selective stocks, which investors perceived as lucrative for harnessing a short-term gain, said the stockbroker.

Sellers, however, ended up on the dominant side as investor confidence is yet to be regained across the trading floor due to the prevailing concerns regarding the market outlook, said the stockbroker.

Major sectors posted mixed performance. Pharmaceutical booked the highest gain of 0.13 per cent, followed by power 0.11 per cent, engineering 0.07 per cent, and food 0.04 per cent.

Banking and non-bank financial institutions witnessed 0.14 per cent and 0.03 per cent, respectively.

JMI Hospital Requisite Manufacturing Company was the most-traded stock, with shares worth Tk 303 million changing hands, following the news that the company has decided to form a new subsidiary named "JMI Specialized Hospital".

It was followed by Fu-Wang Food, Sea Pearl Beach Resorts, Bangladesh Shipping Corporation and Khan Brothers PP Woven Bag Industries.

Of the 329 issues traded, 87 declined, 78 advanced and 164 issues remained unchanged on the DSE trading floor.

The Chittagong Stock Exchange (CSE) also ended marginally higher with the CSE All Share Price Index - CASPI - gaining 11 points to settle at 18,721 and the Selective Categories Index (CSCX) rising 6 points to 11,191.

The port city's bourse traded 2.03 million shares and mutual fund units with a turnover value of Tk 83 million.

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