Stocks slump as bad loans rise further
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Dhaka stocks slumped on Monday, stretching the losing trend to the second session, as investors became worried about the continuous rise in defaulted loans in the country’s banking sector.
DSEX, the key index of the Dhaka Stock Exchange, plunged by 1.1 per cent, or 57.96 points, to close at 5,165.76 points on Monday after losing 13.12 points on Sunday.
Market operators said that although investors had remained cautious in the previous two weeks with a little movement of the index, they went for selling shares heavily on Monday following newspaper reports exposing a further rise in defaulted loans in the banking sector.
As per Bangladesh Bank data, the amount of defaulted loans rose by Tk 18,513.17 crore in January-June to reach Tk 1.12 lakh crore by the end of June.
After subdued opening of the trading on Monday, the key index started sliding after 15 minutes and lost more than 65 points in two and a half hours of trading.
DSEX tried to crawl back but ultimately ended in deep in the red zone because of relentless selling pressure, said market operators.
‘Before Monday’s trading, there was concern among the investors, especially institutional ones, about the liquidity situation in the financial market following the central bank move over banks’ cash reserve requirement for their offshore banking operations. The concern deepened on Monday because of the further rise in the defaulted loans,’ said a stockbroker.
The BB in the past week directed the banks to maintain cash reserve ratio and statutory liquidity ratio for their exposure through offshore banking operations.
He said that the increased defaulted loans meant more pressure on liquidity situation of the banks, which were already facing shortage of fund.
Market operators said that a continuous fall in the share prices of Grameenphone, the largest capitalised scrip, was also affecting the DSEX’s movement.
The mobile phone operator has been at loggerheads with the Bangladesh Telecommunication Regulatory Commission over unpaid audit and other claims.
Out of the 353 scrips traded on Monday, 276 declined, 55 advanced and 22 remained unchanged.
Turnover on the bourse declined further to Tk 447.11 ctore on Monday from Tk 468.99 crore on Sunday. It was Tk 478.90 crore on Thursday.
Share prices of companies of all the sectors excepting two declined on the day.
Among the major sectors, bank declined by 0.8 per cent, non-bank financial institution 1.6 per cent, general insurance 2 per cent, fuel and power 2 per cent, textile 2.1 per cent and telecommunication 1.1 per cent.
Share prices of life insurance sector rose by 2.3 per cent and IT 1.3 per cent.
DS30, the blue-chip index of the DSE, dropped by 1.19 per cent, or 22.09 points, to close at 1,819.67 points.
DSE Shariah index DSES lost 0.88 per cent, or 10.67 points, to close at 1,193.05 points.
United Power Generation Company led the turnover chart with its shares worth Tk 21.92 crore changing hands.
Silco Pharmaceuticals, Orion Infusion, Monno Ceramic Industries, Bangladesh Shipping Corporation, Beacon Pharma, Monno Jute Stafflers, JMI Syringe, VFS Thread Dyeing and Advent Pharma were the other turnover leaders.
Standard Ceramics gained the most on the day with a 5.71-per cent increase in its share prices while SEML FBLSL Growth Fund was the worst loser, shedding 9.80 per cent.
Source: http://www.newagebd.net
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