Panic sales keep hammering Dhaka stocks
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Dhaka stocks plunged on Monday, stretching the losing streak to the sixth day as panic-stricken investors continued selling shares to avoid pitfalls.
The DSEX, the key index of the Dhaka Stock Exchange, lost 1.06 per cent, or 50.67 points, to end at 4,711.30 points on Monday.
The market started falling from the very beginning on Monday and descended more firmly as the time progressed and finished deep into the negative trajectory as investors continued panic selling, market operators said.
The DSE key index shed 226.57 points in last six sessions and 1,238 points since January 24 this year. In the period, Tk 64,000 crore was wiped off the DSE market capitalisation.
Monday’s figure was the lowest after November 17, 2016 when the index was at 4,698.54 points.
Market operators said investors were rushing to withdraw investments from the market, fearing further fall in share prices.
Some brokerage houses went for ‘forced sales’ to reduce risks of margin loans, they said.
They said investors, who were waiting for a rebound at the market, became fed up with the relentless slump and went for selling shares.
The investors’ mood was dampened as the government failed to take any fruitful measure to recover the market, they said.
The average share prices of almost all the sectors dropped on the day.
Share prices of telecommunication decreased by 2.2 per cent, non-bank financial institution 2.0 per cent, textile 1.8 per cent and bank 0.6 per cent on the day.
Investors have been grappling with a host of reasons including bleak financial sector with huge amount of non-performing loans, dearth of liquidity and Grameenphone’s tussle with the telecom regulator.
Besides, lack of governance, approval of weak initial public offerings, increased manipulations, and absence of proper regulatory action against errant people rattled the capital market.
The investment capacity of the institutional and large-scale investors decreased significantly due mainly to the relentless fall in share prices and dearth of liquidity in the banking sector, market operators said.
Stock market analyst and United International University professor Mohammad Musa told New Age that the market had been suffering from lack of investors’ confidence in the market, rising unscrupulous elements and weak policies to develop the market.
He said that the government should provide loans at low-interest rate directly to the merchant banks and stockbrokers to invest in the capital market on condition that their investments would be mortgaged to the government.
Market experts said the country slipped two marks to 105th in economic competitiveness ranking in 2019 and its export earnings in the first quarter of the current fiscal year also fell that made investors worried about the country’s economy.
The government has taken several initiatives including increase in fund flow to the market to revive the market, but all the efforts were in vain.
The media reported that the banks were slow to get the Bangladesh Bank fund with low interest rate for the purpose of investing in the capital market.
And the government is yet to make any significant move towards resolving GP’s audit dispute with the Bangladesh Telecommunication Regulatory Commission.
GP dropped on Monday to extend the losing streak to six consecutive days.
The foreign investors have been pulling funds out of the market that worsened the situation, market experts said.
The media reported that the foreign investors at the DSE withdrew record Tk 680 crore in last seven months (March-September) from the country’s premier bourse.
EBL Securities in its daily market commentary said, ‘Issues like prevalence of junk stocks, lack of demonstrable long-term initiative from regulators and lack of listing of quality IPO kept investors worried in last couple of months.’
‘This depressed market outlook causing «forced sales», which has been a curse to the market’s performance in recent times,’ it said.
Turnover on the bourse inched up to Tk 299.89 crore on Monday from Tk 298.19 crore in the previous session.
Out of the 352 scrips traded on the day, 231 declined, 80 advanced and 41 remained unchanged.
Blue-chip index DS30 decreased by 1.14 per cent, or 19.27 points, to close at 1,669.89 points.
DSE Shariah index DSES shed 1.62 per cent, or 17.81 points, to close at 1,081.79 points.
National Tubes led the turnover chart with its shares worth Tk 17.14 crore changing hands on the day.
Square Pharmaceuticals, Wata Chemical, Bangladesh Shipping Corporation, Summit Power, Bangladesh Submarine Cable Company, JMI Syringe, Standard Ceramics, Monno Jute Stafflers and Atlas Bangladesh were the other turnover leaders.
ML Dyeing gained the most on the day with a 6.14-per cent increase in its share prices while Evince Textiles was the worst loser, shedding 14.78 per cent.
Source: http://www.newagebd.net
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