The cement sector witnessed the highest gain in prices on the Dhaka Stock Exchange in the first half of this year.
The prices of the cement companies soared 68.5 percent on average mainly due to sharp price appreciation of heavyweight Lafarge Surma Cement, according to an analysis by BRAC EPL Stock Brokerage Ltd.
Nine sectors out of 19 that trade on the Dhaka bourse advanced in the first half, while 10 sectors saw a fall in their prices.
The price of Lafarge Surma soared 148 percent during the period as the multinational cement company announced 5 percent interim cash dividend at the end of May after it covered up accumulated losses.
Lafarge Surma's consolidated net profit in the first five months this year was Tk 114.41 crore, enough to offset the accumulated loss of Tk 94 crore last year.
The news of a merger plan with Holcim, another cement giant, also pushed up the prices of Lafarge.
In April, France's Lafarge and Switzerland's Holcim announced plans to merge into a company with a stockmarket value of more than $50 billion in the industry's biggest ever tie-up.
The telecom sector that accounts for 18.2 percent of the total equity market capitalisation posted the second highest gain of 46.3 percent in the first half as Grameenphone saw price appreciation of 49.5 percent during the period.
Among other major sectors: foods gained 33.6 percent and pharma 32.5 percent.
DSEX, the benchmark general index of the Dhaka bourse, gained 5 percent to 4,480.52 points during the period.
However, the return was much higher at the beginning of the year as the market gauge gained 11.4 percent in January following the parliamentary elections, the stockbroker said. The DSEX reached a peak of 4,845.09 points on February 6 and declined 5.7 percent in the following five months.
The financial sector went down in the first half: banks, the second largest sector that accounts for 16.5 percent of the total equity market cap, lost 7.9 percent followed by non-bank financial institutions 3.9 percent, life insurance 12.7 percent, general insurance 16.4 percent and textile 16.1 percent.
The pharmaceutical sector achieved good earnings growth as profit was up by 26.3 percent in the first quarter, compared to the same period in the previous year.
NBFIs, telecoms and power posted better performance but the cement sector's earnings went down in the first quarter.
“Banks' earnings skyrocketed in the first quarter following relaxation of provisioning requirement and loan rescheduling facility,” BRAC EPL said. The top 10 largest stocks, accounting for 45.9 percent of the total equity market cap as on June 30, outperformed the market significantly.
Among the largest stocks, Renata registered the second highest gain of 60.8 percent after Lafarge Surma. Islami Bank is the only stock among the large companies which went down 19.6 percent during the period. Most of the large cap stocks posted staggering returns which resulted in positive movement of the broader market indices, the stockbroker said.
Out of 256 equity issues that have been trading from the beginning of the year, 80 gained with four of them posting triple digit return during the period. The remaining 176 issues declined.
Paper and printing was the worst performer during the first half, declining 26 percent.
Seven new issues commenced trading on the DSE floor during the period.