Junk stocks top DSE weekly gainer chart

Investors are turning to junk shares instead of fundamentals in hopes of higher returns from lower investments.

As a result, the Dhaka Stock Exchange's (DSE) top gainer chart was dominated by junk stocks.

In the last week, Khan Brothers PP Woven Bag shares, which failed to pay a dividend of at least 5% for the last five years, jumped over 30% throughout the last week without any valid reason.

The company also leads the DSE weekly top ten gainers chart, where other junk stocks are Olympic Accessories, Central Pharma, BD Thai Aluminum, Midas Finance, and Prime Islami Life Insurance.

But these companies are not able to pay dividends regularly due to losses over the last five years.

EBL Securities said in its weekly market review that investors' movement towards gaining territory was led by particular small-cap and junk stocks as they sought to take positions in the quick rallies in anticipation of quick gains.

Market insiders said, at this time, there is no chance of a massive correction in the stock market due to the imposition of a floor price, and daily traders seeking short-term success primarily focus on junk shares. Traders, in general, do not have long-term plans or a lot of capital, so they do not look to buy any fundamentally strong shares.

In the last week, the DSE key index DSEX rose 39 points to reach 6,319, and the Chittagong Stock Exchange all-share price index CASPI gained 0.52% to 18,657.

The daily average turnover of the DSE fell by 24% to Tk591 crore in the last week, where the insurance sector leads the turnover chart.

The review said that insurance sector stocks returning to positive territory after a sharp correction in the previous week have also contributed to the market ending on a positive note since the market turnover is still dominated by insurance sectors.