Dhaka stocks sink for 2nd week on panic selling
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Dhaka stocks took a drubbing in the past week, extending losing streak to second week, amid cautious trading as investors grappled with a persistent bearishness on the market and gloomy macroeconomic outlook.
DSEX, the key index of the Dhaka Stock Exchange, lost 3.36 per cent, or 156.89 points, over the week to close at 4,514 points on Thursday, the last trading session of the week, after losing 60 points in the previous week.
The DSEX lost 257 points in last five weeks with one positive week.
The market started the week with a steep fall of 74 points on December 8 and maintained the vibe for the next couple of sessions to hit a 41-month low on December 10 as investors went for panic sales amid economic worries and prolonged bear run at the market, market operators said.
However, the market ended with slight gains in the last two sessions of the week as some institutional investors went for bargain hunting to halt the plunge, they said.
The DSEX lost more than 1,433 points in last 10 months, eroding Tk 75,800 crore in market capitalisation.
Market operators said the continuing plunges in share prices reduced investment capacity of the market intermediaries and high net worth investors.
They said many investors shied away from taking any investment move fearing further fall in share prices.
Besides, investors remained cautious about the sudden stagnant condition in some of the country’s economic indicators and they were assessing the possible impact of the economic position on the stock market, they said.
A decline in the private sector credit growth to nine-year low, negative export earnings for last four months, poor tax revenue collection and heavy government borrowing reflected the weak state of the country’s economy.
Moreover, the continuing surge in banks’ non-performing loans, high interest rate and pressure on exchange rate weighed heavily on the business growth.
Concerns over the country’s economy and prolonged bearishness at the market prompted foreign investors also to continue withdrawing funds from the capital market that had worsened the situation.
Foreign investors withdrew around Tk 970 crore in last 10 months.
The banks remained reluctant to invest on the capital market considering the overall market scenario.
On Thursday, the share prices of the debutant company Ring Shine Textiles soared by 50 per cent to end at Tk 15 each, the maximum limit allowed on the debut trading day.
The new circuit breaker rules allow the prices of a company’s shares to rise and drop by maximum 50 per cent on the first and second days of its trading.
EBL Securities, in its weekly market commentary, said that the news regarding several underperforming macroeconomic indicators had created panic amongst investors in last week.
‘However, the market sentiment slightly improved in the closing two sessions of the week as a section of investors showed interest in certain sector-specific lucratively priced stocks,’ it said.
Share prices of all the sectors except life insurance dropped in the week.
The average share prices of textile sector decreased by 3.7 per cent, telecommunication 3.5 per cent, non-bank financial institution 3.48 per cent and bank 3.0 per cent.
Out of the 356 scrips whose shares changed hands in the past week, the prices of 277 declined, 64 advanced, and 15 remained unchanged.
The daily average turnover on the DSE plunged to Tk 314.79 crore in the past week from Tk 462.19 crore in the week before.
Shariah index of the bourse, DSES, plunged by 3.72 per cent, or 39.25 points, in the past week to close at 1,016.60 points.
DS30, the blue-chip index of the DSE, lost 3.59 per cent, or 57.70 points, to close at 1,548.12 points.
Square Pharmaceuticals led the turnover chart for the third consecutive week with its shares worth Tk 41.57 crore traded in last week.
Sinobangla Industries, Khulna Power Company, Sonar Bangla Insurance, Paramount Insurance Company, LafargeHolcim Bangladesh, Daffodil Computers, National Tubes, Zaheen Spinning and Beacon Pharmaceuticals were the other leaders on the turnover chart.
Anlima Yarn Dyeing performed the best in the week with a 12.76 per cent increase in its share prices while Maksons Spinning Mills had the poorest performance, shedding 18.18 per cent.
Source: http://www.newagebd.net
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