Stocks drop as surge in banks’ bad loans dampens investors’ mood

Staff Correspondent | Published: 00:00, Dec 07,2018

 
 

Dhaka stocks dropped on Thursday after a four-day gain as the non-performing loan situation in the country’s banking sector dampened the investors’ mood, market operators said.
The media on the day reported that the defaulted loans in the banking sector reached Tk 99,370 crore, rising by 11.23 per cent or Tk 10,030 crore in July-September from the previous quarter ending in June.
DSEX, the key index of Dhaka Stock Exchange, lost 0.52 per cent, or 28.30 points, to close at 5,332.80 points on Thursday after gaining 74 points in the previous four sessions.
After a flat beginning, DSEX moved downward that descended more firmly as the time progressed as investors went for heavy selling, market operators said.
They said investors were worried as the non-performing loans were the key reason for profit fall of most of the banks in recent times.
Market experts blamed political pressure, bank owners’ influence and lack of regulatory monitoring and transparency for the continuous surge in bad loans in the banking sector.
The financial sectors led the plunge on Thursday with a decline in average share prices of non-bank financial institution and bank by 0.85 per cent and 0.49 per cent respectively.
A section of investors also remained cautious amid rising political activities surrounding the national election, stockbrokers said.
The 11th national polls are scheduled for December 30.
The turnover on DSE plunged to Tk 514.04 crore on Thursday compared with that of Tk 679.59 crore in the previous trading session.
Moreover, investors were disappointed at pulling out funds by foreign investors from the Bangladesh capital market.
According to media reports, the foreign investors sold shares worth Tk 346.35 crore in November against their buying of shares worth Tk 323.84 crore with the net investment standing at Tk 22.51 crore negative.
Average share prices of textile, cement and pharmaceuticals declined by 1.44 per cent, 1.12 per cent and 0.36 per cent respectively on Thursday.
Average share prices of energy and telecommunication advanced by 0.71 per cent and 0.57 per cent respectively.
The textile sector continued leading the turnover chart on Thursday by holding 29 per cent of the day’s turnover.
Share prices of GlaxoSmithKline Bangladesh soared by 51.81 per cent in last nine sessions. The company on Tuesday declared to sell 82 per cent of its total stakes to Unilever for Tk 1,604 crore. GSK Bangladesh advanced by 6.25 per cent on Thursday.
Of the 336 companies and mutual funds traded on Thursday, 202 declined, 112 advanced, and 29 remained unchanged.
DSE blue-chip index DS30 also dipped by 0.53 per cent, or 9.95 points, to close at 1,862.48 points.
Shariah index DSES shed 0.57 cent, or 7.06 points, to finish at 1,224.19 points.
Dragon Sweater led the turnover leaders with its shares worth Tk 19.61 crore changing hands.
Saiham Cotton, ML Dyeing, United Power Generation Company, Intech Limited, BBS Cables, Shepherd Industries, Sonali Aansh, Western Marine Shipyard and Indo-Bangla Pharmaceuticals were the other turnover leaders.
Prime Islami Life Insurance gained the most on the day with a 9.97-per cent increase in its share prices, while Delta Spinners was the worst loser, shedding 6.94 per cent.

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