Stocks fall for 3rd day as financial scrips take hammering

Staff Correspondent | Published: 03:13, Jan 09,2018

 
 

Dhaka stocks slumped on Monday, extending the losing streak to the third session, as investors kept selling shares amid a Bangladesh Bank’s move to cut advanced deposit ratio of banks that might hit fund flow to the capital market.
DSEX, the key index of Dhaka Stock Exchange, lost 0.92 per cent, or 57.91 points, to close at 6,210.50 points on the day.
The DSEX lost 107.75 points in the last three sessions after two weeks of rise.
The market began to fall sharply from the beginning of the session that continued until the end of the session as investors kept selling shares to avoid losses, market operators said.
They said that the share prices of most of the companies continued declining from January 4 after the media reported on the day that the central bank was planning to reduce the advance deposit ratio of banks to check their aggressive lending.
Investors apprehended that the move could reduce the fund flow to the capital market, they said.
After a meeting with the managing directors of the commercial banks at the BB’s headquarters in the city on January 3, BB deputy governor SK Sur Chowdhury said that the ADR was likely to come down to 85 per cent for the Islamic banks from the existing 90 per cent and for other banks to 80 per cent from 85 per cent.
Immediate past Merchant Bankers Association president Sayadur Rahman said that the recent money market tightening moves including cutting of ADR and the media reports on various scams and scandals in the financial sector made investors confused.
As a result, the share prices of all the sectors except services declined on the day.
Banks led the nosedive of the day, declining by 1.7 per cent while telecommunication, non-bank financial institutions and energy dropped by 1.2 per cent, 0.9 per cent and 0.5 per cent respectively.
Among the prominent scrips, Grameenphone, British American Tobacco and BRAC Bank were the worst losers on the day.
Market operators also said many investors remained cautious and preferred to be on the sidelines to watch next direction of the market.
As a result, the turnover at the DSE declined further to Tk 477.55 crore compared with that of Tk 485.00 crore in the previous session.
Bangladesh Bank’s plan to cut the advance deposit ratio has put a negative impact on the scrips from the bank sector, said EBL Securities in its daily market commentary.
‘The market remained negative throughout the day’s session as investors adopted cautions approach that resulted in the selling pressure,’ it said.
Of the 335 companies and mutual funds traded, 213 declined, 67 advanced, and 54 remained unchanged.
DS30, the blue-chip index of the DSE, shed 0.95 per cent, or 21.76 points, to finish at 2,261.45 points.
Shariah index DSES lost 0.58 per cent, 8.23 points, to close at 1,394.63 points.
Paramount Textiles led the turnover chart on the day with its shares worth Tk 17.52 crore changing hands.
City Bank, IFAD Autos, BRAC Bank, National Tubes, Alif Manufacturing Company, Dragon Sweater, Grameenphone, Lafarge Surma and Square Pharmaceuticals were the other turnover leaders.
Dragon Sweater increased most with a 6.40-per cent rise in its share prices, while Shyampur Sugar Mills was the worst loser, shedding 4.32 per cent.

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