Dhaka stocks slumped on Monday after a four-day gain as investors went for profit-taking share sales amid concerns over the existing liquidity crisis at the financial market and the uncertainty surrounding the DSE’s share sales to a strategic partner.
The Dhaka Stock Exchange’s key index, DSEX, lost 0.81 per cent, or 48.05 points, to finish at 5,835.33 points after gaining 108 points in the previous four sessions.
The market started flat that dropped sharply soon as investors went for profit-taking share sales, market operators said.
Some of the investors apprehended that the Bangladesh Securities and Exchange Commission might not give approval to a DSE proposal in favour of a Chinese consortium as its strategic partner as the commission raised questions about the selection of the consortium, they said.
A commission meeting is scheduled to be held tomorrow but the commission officials could not confirm whether the issue of DSE’s strategic partner is on the agenda of the meeting.
The DSE on Sunday sent the replies to the queries made by the BSEC about rules ‘violations’ in the proposal of the Chinese consortium.
Although the Chinese group has expressed its willingness to amend a number of clauses the BSEC highlighted in its letter to the DSE, investors were still sceptical about the commission’s plan over the issue, market operators said.
DSE sources said the group agreed to sign the share purchase agreement under the Bangladesh law instead of the UK law. It also excluded the condition of waiver from the contribution to the bourse’s settlement guarantee fund, they said.
They said the stock market regulator had earlier favoured an India’s National Stock Exchange-led group.
Besides, a section of investors also assumed that the government might not support any selection of strategic partner ahead of the national elections, likely to be held at the end of this year, market operators said.
Moreover, investors remained worried over the current liquidity shortage at the financial market that was feared to get worse ahead of the elections.
The average share prices of all large capitalised sectors except food declined on the day.
The share prices of bank, non-bank financial institution, cement and telecommunication declined by 1.6 per cent, 1.3 per cent, 1.2 per cent and 0.6 per cent respectively that weighed most on the index.
Out of the 30 traded bank scrips, 25 declined, just one advanced and four remained unchanged while out of the 22 traded NBFIs, 18 declined, three advanced and one remained unchanged.
Among the prominent scrips, BRAC Bank, City Bank and Grameenphone declined most on the day.
Investors have remained concerned over the DSE’s share sales to a strategic partner and liquidity shortage at the financial market for more than a month although the market witnessed buying pressure in the previous four sessions amid the government move to stabilise the market situation.
The turnover at the DSE, however, inched up to Tk 389.53 crore on Monday compared with that of Tk 363.43 crore in the previous session.
‘The core index displayed negative movement throughout the session as investors seemed to spur panic sales,’ said EBL Securities in its daily market commentary.
Out of the 337 companies and mutual funds traded, 209 declined, 90 advanced, and 35 remained unchanged.
DS30, the blue chip index of the DSE, also dropped by 0.92 per cent, or 20.04 points, to close at 2,152.36 points.
Shariah index DSES declined by 0.44 per cent, or 6.05 points, to finish at 1,367.72 points.
IBN Sina led the turnover chart on the day with its shares worth Tk 16.61 crore changing hands.
Monno Ceramics, National Tubes, Gemini Sea Food, Unique Hotel, Anwar Galvanizing, Nahee Aluminum Composites Panel, Alif Industries, LankaBangla Finance and IFAD Autos were the other turnover leaders.
Gemini Sea Food was the top gainer with a 6.35-per cent rise in its share prices, while Beximco Synthetics was the worst loser shedding 5.30 per cent.
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