Stocks plunge as banks whipped over CPD comments, MPS fear

Staff Correspondent | Published: 23:10, Jan 14,2018

 
 

Dhaka stocks plummeted on Sunday as investors felt jittery due to the Centre for Policy Dialogue’s damning observations about the country’s banking sector and concern over the upcoming monetary policy.
The think tank at a briefing on Saturday said that 2017 was a year of bank scams as the banking sector was plagued by financial scams, non-performing loans, inefficiency and slack monitoring and supervision.
DSEX, the key index of Dhaka Stock Exchange, lost 0.99 per cent, or 61.42 points, to close at 6,117.89 points on Sunday after gaining 6.87 points in the previous session.
A stockbroker said Bangladesh Bank hinted at tightening the upcoming monetary policy statement (MPS) that also made investors cautious.
As a result, the turnover at the bourse hit a seven-month low to Tk 328.08 crore on Sunday from that of Tk 381.51 crore in the previous session. The turnover was Tk 317.89 crore on May 30, 2017.
The DSEX lost 200 points in last seven trading sessions despite a slight gain on January 11.
On Sunday, the market began to fall sharply from the morning session that continued till the end of the session amid concerns over the country’s financial sector, market operators said.
They said that all the sectors except miscellaneous declined on the day.
The CPD raised concern that the government would not intend to make the required reform in the banking sector in the election year, 2018.
Immediate past DSE Brokers Association president Ahmed Rashid Lali said that the CPD mirrored the ongoing crisis of the country’s financial sector that might dishearten investors.
‘Bangladesh Bank also hinted at tightening the upcoming monetary policy due to the rise of food inflation that also made investors cautious on the trading floor,’ he said.
As a result, the financial sector led the nosedive as the average share prices of bank and non-bank financial institution sectors plunged by 1.6 per cent and 1.1 per cent respectively.
Out of the 30 traded bank scrips, 26 declined, just three advanced and one remained unchanged while out of the 23 NBFI issues, 20 declined, just two advanced and one remained unchanged.
Among the prominent scrips, BRAC Bank, City Bank and Lafarge Surma were the worse losers on the day.
Besides, cement, pharmaceuticals and energy sectors joined the downward trend of the financial sectors, declining by 1.2 per cent, 0.5 per cent and 0.4 per cent respectively.
‘Prior to the monetary policy announcement for the second half of fiscal year of 2017-2018, many investors remained cautions and preferred to be on the sidelines to watch the next direction of the market,’ said EBL Securities in its daily market commentary.
Of the 335 companies and mutual funds traded, 253 declined, 48 advanced, and 34 remained unchanged.
DS30, the blue-chip index of the DSE, also shed 0.78 per cent, or 17.74 points, to finish at 2,242.50 points.
Shariah index DSES declined by 0.51 per cent, 7.21 points, to close at 1,384.33 points.
BD Thai led the turnover chart on the day with its shares worth Tk 13.89 crore changing hands.
IFAD Autos, National Tubes, Keya Cosmetics, Square Pharmaceuticals, Alif Manufacturing Company, United Power Generation Company, Islami Bank, LankaBangla Finance and National Bank were the other turnover leaders.
Bangladesh Autocars increased most with a 7.25-per cent rise in its share prices, while Alif Manufacturing Company was the worst loser, shedding 22.96 per cent. 

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