Dhaka stocks plummeted on Sunday, a day before the announcement of monetary policy by the central bank, as anxious investors went for selling shares following the finance minister’s comment that Bangladesh Bank would take initiative to control banks’ excessive loan disbursement ahead of the national elections.
Finance minister AMA Muhith made the comment while addressing the annual programme of Rupali Bank at the Osmani Auditorium in Dhaka on the day.
DSEX, the key index of Dhaka Stock Exchange, lost 1.14 per cent, or 71.07 points, to close at 6,144.72 points on Sunday after gaining 15.11 points in the previous trading session.
The market started falling from the very beginning of the day, losing 74 points within an hour that proceeded with the negative momentum until the end of the session amid lower investors’ participation.
Stockbrokers said investors felt jittery after the media reported that Muhith said the BB would take initiative to control money flow as banks could provide excessive loans ahead of the national polls likely to be held at the end of this year.
The BB will announce today the monetary policy statement for the second half (January-June) of this fiscal year (2017-18).
A couple of days before, the central bank hinted that banks’ advanced deposit ratio would not be curtailed following pressures from the bankers that put a brake on the continued fall in the share prices, but the Muhith’s remark made investors anxious again, stockbrokers said.
They said investors feared that a cut in banks’ ADR would result in liquidity crisis at the market.
Bangladesh Merchant Bankers Association president Nasir Uddin Chowdhury told New Age, ‘Uncertainty regarding banks’ ADR and possibility of a contractionery monetary policy kept investors jittery on the trading floor.’
A senior official of a DSE brokerage house said that investors were also looking anxiously at the political front before the verdict on a corruption case against Bangladesh Nationalist Party chairperson Khaleda Zia.
The Special Court in Dhaka set February 8 to deliver the verdict in the corruption case against Khaleda, her son Tarique Rahman and four other people.
The turnover at the bourse also declined further to Tk 359.28 crore from that of Tk 412.90 crore in the previous session.
The share prices of all the sectors except food fell on the day while financial sectors declined most.
The average share prices of non-bank financial institutions and bank slumped by 1.7 per cent and 1.3 per cent respectively.
Pharmaceuticals, telecommunication and cement sectors also declined more than one per cent each.
A plunge in share prices of Square Pharmaceuticals, Grameenphone, Islami Bank and Lafarge Surma fuelled the volatility on the day.
The share prices of non-bank financial institutions, cement and pharmaceuticals declined by 0.98 per cent, 0.24 per cent and 0.17 per cent respectively on the day.
‘The market started with negative tune and continued till the end as investors adopted cautious approach prior to the announcement of monetary policy statement for second half of FY 2017-18,’ said EBL Securities in its daily market commentary.
Of the 333 companies and mutual funds traded, 268 declined, 35 advanced, and 30 remained unchanged.
DS30, the blue-chip index of the DSE, slumped 1.02 per cent, or 23.54 points, to close at 2,281.14 points.
Shariah index DSES also lost 1.24 per cent, 17.89 points, to close at 1,413.54 points.
Square Pharmaceuticals led the turnover chart on the day with its shares worth Tk 21.88 crore changing hands.
IFAD Autos, Shahjibazar Power, Grameenphone, Paramount Textiles, Islami Bank, United Commercial Bank, BBS cables, BD Finance and Monno Ceramics were the other turnover leaders.
GSP Finance Company was the top gainer with a 2.86-per cent rise in its share prices, while National Polymer Industries was the worst loser, shedding 5.58 per cent.
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