Dhaka stocks dropped in volatile trading on Monday, extending their losing streak to the fifth trading session, as investors kept selling shares amid political jitters and liquidity crisis fears.
The key index of Dhaka Stock Exchange, DSEX, lost 0.31 per cent, or 18.50 points, to finish at 5,869.78 points on Monday.
The market exhibited a rough session with few ups and downs and the DSEX lost 116 points within 20 minutes of the day’s trading, market operators said.
The market, however, started recovering in late trading and ended up with a marginal loss as a section of investors went for bargain hunting, they said.
On Sunday, the DSEX crash-landed, losing 133 points, which was the biggest single-day fall in last four and a half years. The DSEX shed 307 points in last five trading sessions.
Market operators said investors’ tensions were growing ahead of the verdict against Bangladesh Nationalist Party chairperson Khaleda Zia in a graft case.
A special court will deliver the verdict on February 8.
The media reported that BNP activists would go for tough movement if Khaleda was sent to jail while ruling Awami League were making preparations to counter the movement that made investors worried.
The continued fall at the market also prompted many investors to take out their funds from the market, stockbrokers said.
Furthermore, the Bangladesh Bank’s decision to cut banks’ advance-deposit ratio by 1-1.5 percentage points has created a fear among investors that the cut would result in a liquidity crisis at the financial market, they said.
They also said that intervention by some of the financial institutions by injecting funds helped the market recover some points lost in the morning session on Monday.
DSE Brokers Association and Bangladesh Merchant Banks Association and top-30 brokerage houses of the DSE held an emergency meeting on Sunday to find a solution to the market slump and they urged financial institutions including Investment Corporation of Bangladesh to support the market in the situation.
DSE director Rakibur Rahman said, ‘The exposure limit set by the BB has adversely affected the capital market as financial institutions cannot invest freely due to the limit. The central bank should discuss with other regulators before making any policy that affects other areas of the financial market.’
The average share prices of food, bank and cement declined by 1.4 per cent, 1.0 per cent and 0.3 per cent respectively that contributed most to the market fall on Monday.
On the other hand, the share prices of pharmaceuticals, non-bank financial institutions and energy increased by 0.5 per cent, 0.4 per cent and 0.2 per cent respectively.
Out of the 337 companies and mutual funds traded, 186 declined, 111 advanced and 38 remained unchanged.
The turnover at the bourse, however, increased to Tk 440.42 crore from that of Tk 364.90 crore in the previous session.
‘Steady bearish streak at the market along with liquidity crisis and political uncertainty kept investors worried while another group of investors opted to take fresh position in stocks that
witnessed heavy price fall in recent period,’ said EBL Securities in its daily market commentary.
DS30, the blue-chip index of the DSE, also lost 0.01 per cent, or 0.29 points, to close at 2,191.29 points.
Shariah index DSES, however, added 0.0003 per cent, or 0.004 points, to close at 1,377.21 points.
Beximco Pharmaceuticals led the turnover chart on the day with its shares worth Tk 21.08 crore changing hands.
Square Pharmaceuticals, LankaBangla Finance, Grameenphone, BRAC Bank, City Bank, Monno Ceramics, Renata, Alif Industries and BD Finance were the other turnover leaders.
Islami Insurance Bangladesh was the top gainer with a 4.33-per cent rise in its share prices, while Progressive Life Insurance was the
worst loser, shedding 5.89 per cent.
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