Stocks plunge after 2-week rise over BB move jitters

Staff Correspondent | Published: 21:58, Jan 13,2018 | Updated: 00:43, Jan 14,2018

 
 

Dhaka stocks plunged last week after a two-week gain as investors felt jittery following a Bangladesh Bank move to lower banks’ advance deposit ratio, stockbrokers said.
Investors apprehended that a cut in the ADR ratio could reduce the fund flow to the capital market, they said.
DSEX, the key index of Dhaka Stock Exchange, lost 1.96 per cent, or 123.52 points, over the week to close at 6,179.32 points on Thursday after gaining 120 points in the previous two weeks.
Market operators said the market fell in the first four trading sessions of the week as investors preferred to take out their investment from the market to avoid any unexpected losses.
The market, however, gained on Thursday, the last trading session of the week, on bargain hunting, they said.
Market operators said investors became cautious following a January 4 media report that the central bank was planning to curtail the advance deposit ratio of banks to check their aggressive lending.
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.
All the sectors except pharmaceuticals declined over the week.
Bank and non-bank financial institution sectors led the nosedive, with a fall of 3.9 per cent and 3.1 per cent respectively.
Among the prominent scrips, the share prices of United Power Generation Company, Lafarge Surma and Investment Corporation of Bangladesh plunged by 6.5 per cent, 6.4 per cent and 4.2 per cent respectively.
The daily average turnover on the bourse declined to Tk 446.32 crore last week compared with that of Tk 519.13 crore in the previous week.
‘Bangladesh Bank’s proposed cut in advance deposit ratio has raised concern regarding scrips from the bank sector as it may put negative impact on banks’ earnings. So, investors remained cautious throughout the week.’ said EBL Securities in a weekly market commentary.
Of the 338 companies and mutual funds traded, 242 declined, 78 advanced, and 18 remained unchanged.
DS30, the blue chip index of the DSE, shed 1.82 per cent, or 41.71 points, over the week to close at 2,253.50 points on Thursday.
Shariah index DSES declined by 1.14 per cent, or 16.05 points, to close at 1,391.55 points.
IFAD Autos led the turnover chart over the week with it shares worth Tk 96.09 crore changing hands.
United Power Generation Company, Paramount Textiles, National Tubes, Square Pharmaceuticals, Dragon Sweater, Lafarge Surma, City Bank, Alif Manufacturing Company and BRAC Bank were the other turnover leaders.
BD Autocars gained the most in the week with a 10.95-per cent increase in its share prices, while Alif Manufacturing Company was the worst loser, shedding 15.38 per cent.

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