Stocks keep slumping as pessimism grips market
Image: Bizbangladesh.net
Dhaka stocks plummeted in the past week, stretching the negative run to the second week, as panic-stricken investors accelerated share sales to offset further losses amid worries over the country’s economy.
The DSEX, the key index of the DSE, plunged by 2.58 per cent or 127.60 points over the past week to close at 4,810.22 points on Thursday, the last trading session of the week after losing 30.65 points in the previous week.
The key index ended in the red zone in all the trading sessions in the shortened week. Trading on the bourse remained closed on October 8 due to a public holiday on the occasion of Durga Puja.
The DSEX sank to a 34-month low on Thursday because of due to the relentless fall in the stock prices.
The daily average turnover on the DSE dropped to Tk 319.21 crore last week from Tk 391.77 crore in the previous week.
Market operators said that investors became more panicked in the past week and went for exit fearing further losses.
Most of the general and institutional investors remained reluctant to inject funds in the ailing capital market.
The capital market has been tumbling for the last nine months with the core index slumping by 1,100 points and hitting almost a three-year low on Thursday. The bourse lost Tk 55,000 crore in market capitalisation in nine months.
The investors’ worry intensified in the past week due to the sorry state of the financial sector, fall in export earnings in the first quarter of the current fiscal year and the country’s slippage by two notches in the economic competitiveness ranking 2019 of the World Economic Forum.
The country’s export earnings in July September of FY 2019-20 decreased to $9.64 billion from $9.94 billion during the same period of FY19. Export earnings had dropped in Q1 for the first time after more than a decade.
The government has taken several initiatives in recent times, including increasing of fund flow to the capital market to recover investors’ confidence, but the efforts have so far failed.
Market experts said that the government had not taken the right approaches to restore investors’ confidence.
They blamed the volatility in the financial market, which had been struggling for liquidity, approval of weak initial public offerings, prevalence of unscrupulous practices in the market and Grameenphone’s tussle with the telecom regulator for the current state of the capital market.
Therefore, foreign investors, finding no sign of a rebound, continued to withdraw their investments from the market, making the situation worse.
The foreign investors at the DSE had withdrawn a record Tk 680 crore in the last seven months (March-September) from the country’s premier bourse.
EBL Securities, in its weekly market commentary, said, ‘Investor participation in the market keeps dwindling as the net foreign investment remained negative for seven months at a stretch and institutional and retail investors’ interest keeps shrinking.’
A large section of the investors exerted selling pressure throughout the week to avoid further losses while another section remained engaged in rebalancing portfolio ahead of earnings declaration by June-ending companies, it said.
Average share prices of all the sectors dropped during the week.
Share prices of the energy sector plunged by 5.1 per cent, textile by 4.7 per cent, non-bank financial institution by 4.1 per cent, telecommunication by 3.5 per cent and banking sector by 1.8 per cent over the past week.
Out of the 355 issues traded in the week, 302 declined, 36 advanced and 15 remained unchanged.
DS30, the blue-chip index of DSE, dropped 2.89 per cent or 50.70 points to close at 1,704.54 points.
Shariah index DSES shed 2.20 per cent or 25.01 points to finish at 1,111.36 points.
National Tubes led the turnover chart with shares worth Tk 94.70 crore changing hands in the week.
Standard Ceramic Industries, Wata Chemicals, Summit Power, Square Pharmaceuticals, Monno Jute Stafflers, Atlas Bangladesh, Beacon Pharmaceuticals, Bangladesh Shipping Corporation and Stylecraft were the other turnover leaders.
ML Dyeing gained the most in the week with a 20.17-per cent increase in its share price while Al-Haj Textile Mills performed the worst, losing 19.88 per cent.
Source: http://www.newagebd.net
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