*WEEKLY COMMENT, Oct 21- Oct 25*

*UCB INSTITUTIONAL SALES*

*Short Term Rating (1-4 weeks) – flat*

*Mid Term Rating (1-3 months) – FLAT*

We consider DSEX still in a bullish territory, although slightly intercepted by some political
developments last week resulting from court’s verdict on the 21 August case. Verdicts of the
Court Case caused some weakness in sentiment but market maintained the poise as the
major index DSEX closed the week moderately positive. From activities at both retail and
institutional level, it was apparent to us that the verdict was well anticipated and didn’t
bother participants much rather investors have been more concerned about continuation of
gains in some of the recently active stocks such as KPCL, UPGD, IFAD etc. We believe that
market is likely to consolidate around current level in the coming week. Market maintained
healthy turnover level, although concentrated in very few stocks. We believe such
concentration in handful of stocks will be seen throughout rest of 2018.

On Saturday a new political alliance was formed connecting Dr Kamal and other smaller
factions to BNP (while B. Chowdhury declined to join). The new alliance has come up with a
7point demand some of which might contradict with ruling party’s well publicised policies.
In coming days, it can be expected that this new alliance might stage some activities to
realize their demands from the govt. It is still unclear if this movement will gain ground,
nevertheless as market is currently dominated by sentiments rather than fundamentals, as
polls approaches, greater support from institutions like ICB is anticipated ahead of polls.

Although Fundamental wise we are unsure about banking stocks, some of the names such as
TRUST, UTTARA, and ONE have continued to remain more resilient. We see some demands
form strategic buyers in some banking names as well. Coming week will certainly see
dominance of Power stocks in the turnover board. SUMMIT is expected to post some more
gains in the coming week while BARAKA might also post moderate gains. On the other hand,
KPCL and UPGD might see some consolidation around their new recent highs.

US market experienced sharp correction during last week and as per Frontier market analyst
Dan Keeler of Wall Street Journal plunge in various liquid frontier markets followed a sharp
decline on Wall Street on Wednesday and was driven in part by nervous foreign investors
pulling cash out. In Bangladesh market also, we saw moderate sell pressure from foreign
investors in certain stocks such as BRAC and SQUARE last week.

#3 positives from last week-

- ICB to invest Tk 1,500cr in capital market from bond proceeds
- Inflation drops to 18-month low
- Banks can lend more due to change in CRR calculation

*Disclaimer:*
The content is personal opinion of the author(s) and does not reflect the views of the
company. The color is published for Institutional Investors only to present our views of the
market drivers. Thus, readers are requested not to make any investment decisions solely
based on the information provided in this write-up without verifying the information
presented here. *The content is not for redistribution*.

UCB Capital Management Ltd makes no representation or warranty as to the accuracy or

completeness of such information. All opinions and estimates included in this report
constitute our judgment as of this date and are subject to change without notice. The writer,
UCB Capital, or its clients might have holdings in some or all of the stocks mentioned above.

*Kindly let us know if you decide to unsubscribe from this distribution list.*