Stocks halt 3-week losing streak as regulators intervene

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Dhaka stocks inched up in the past week, after losing in the previous three weeks, as institutional investors went for injecting funds in the last three days of the week to revive investors’ confidence.

DSEX, the key index of Dhaka Stock Exchange, added 0.05 per cent, or 2.56 points, over the week to close at 5,133.26 points on Thursday, the last trading session of the week after losing 299.36 points in the previous three weeks.

The market dropped significantly in the first two sessions of the week as investors maintained panic-driven share sales to avoid further losses.

The first two days’ plunge of 164 points instigated the market regulator Bangladesh Securities and Exchange Commission to hold a number of meetings with the market intermediaries to find out reasons behind the continuous plunge in recent weeks.

BSEC also on Monday formed an inquiry committee to investigate into the role of market intermediaries in the last six months of sluggish market.

The BSEC’s move eased sell-offs in the market as institutional investors came forward to support the market to revive the investors’ confidence.

Besides, the Bangladesh Bank on Monday evening advised 19 banks to support the capital market that encouraged some investors.

The DSEX lost in three sessions on the week as investors’ sentiment towards the market was mostly negative.

Investors lost their trust and confidence over the market regulators as the market didn’t witness stability yet after nine years of market crash, said market operators.

The investors went for share sell-off in July after the government, in the name of incentives, had levied tax on the listed companies of the struggling capital market.

The analysts said that the decision would squeeze companies’ business expansion and would eventually lessen dividend giving capability.

As the investors were digesting the shock of the penalty tax, the government move to wind up the crisis-hit People’s Leasing Financial Services triggered panic sales.

Investors and depositors feared that more financial companies might face liquidation considering the fragile state in the market.

The tussle between Grameenphone and Bangladesh Telecommunication Regulatory Commission over unpaid audit claim also fuelled the volatility in the market.

The DSEX lost 288 points in July.

The affected investors staged demonstration in front the DSE building and demanded an immediate resignation of its chairman M Khairul Hossain and overhaul of the commission.

The EBL Securities in its weekly market commentary said, ‘The constant losing of points in the last three weeks had dented the investors’ confidence heavily which resulted in a selling spree at the first two sessions of the week which resulted in DSEX losing 164 points caused prime index to reach its 31 months’ low.’

‘After that, in an effort to reduce sell pressure, BSEC had asked all stock brokers to ensure legal authorisation of all sell orders. Central bank has asked banks to invest in the stock market if they have the scope within limit,’ it said.

Average share prices of mutual funds, energy, non-bank financial institutions and bank advanced by 14.4 per cent, 2 per cent, 1.3 per cent and 0.8 per cent respectively in the past week.

Share prices of textile, telecommunication and engineering dropped by 2 per cent, 1.4 per cent and 1.1 per cent respectively.

Share prices of most of multinational companies increased in the week due to better earnings disclosures by a number of companies including GlaxoSmithKline and Marico Bangladesh.

The daily average turnover on DSE increased to Tk 399.68 crore in last week from Tk 327.35 crore in the previous week.

Out of the 354 issues traded in the week, 185 declined, 153 advanced and 16 remained unchanged.

DS30, the blue-chip index of DSE, gained 0.36 per cent, 6.61 points, to close at 1,836.19 points.

Shariah index DSES however shed 0.21 per cent, or 2.41 points, to finish at 1,173.73 points.

Fortune Shoes led the turnover chart with its shares worth Tk 82.03 crore changing hands in the week.

United Power Generation Company, Square Pharmaceuticals, Bangladesh Shipping Corporation, National Life Insurance Company, Beacon Pharmaceuticals, Sinobangla Industries, Sea Pearl Beach Resort, Monno Ceramic Industries and Federal Insurance Company were the other turnover leaders.

SEML FBLSL Growth Fund gained the most in the week with a 59.71-per cent increase in its unit prices while Meghan Pet Industries was the worst loser, shedding 17.70 per cent.
Source: http://www.newagebd.net

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