Dhaka stocks plunged on Sunday, extending the losing streak to the third day, as investors went for panic selling of shares especially the financial scrips after BRAC Bank and Bank Asia declared lower-than-expected dividends.
DSEX, the key index of Dhaka Stock Exchange, slumped by 1.04 per cent, or 58.07 points, to close at 5,512.07 points on Sunday. The index lost 119 points in last three sessions.
In line with the previous session, the market began to fall from the very beginning of Sunday’s session and descended more firmly as the session progressed to close at dip into the red zone as investors went for panic selling, market operators said.
They said that investors were caught off guard by the continuous fall in the market and declaration of lower-than-expected dividends by two banks.
The benchmark index, DSEX, plunged on Sunday to extend its recent decline to about 7.36 per cent or 437 points and bring the loss in value to Tk 7,967 crore till Sunday.
Therefore, the turnover on the bourse plunged further to Tk 354.35 crore from that of Tk 390.99 crore in the previous trading session.
Sunday’s turnover was the lowest after December 23 last year when it was Tk 353.63 crore.
Share prices of BRAC Bank plunged by 7.2 per cent as the bank declared 15 per cent stock dividend for the year ended on December 31, 2018 despite a 6-per cent year-on-year profit growth. The bank had declared 25 per cent stock dividend for the year 2017.
Bank Asia was the worst loser on the day, losing by 10.52 per cent, as the bank declared 5 per cent cash and 5 per cent stock dividend for the year ended on December 31, 2018. The bank had declared 12.5 per cent bonus dividend for the year 2017.
Non-bank financial institution Prime Finance declared no dividend for the year 2018.
Lower-than-expected dividend declarations by the banks and the NBFI fuelled the share sales at the market, said market operators.
Former DSE Brokers’ Association president Ahmed Rashid Lali told New Age that banks’ corporate declarations failed to attract investors.
He also blamed increased deposit rate in the financial sector and random share sales by sponsor-directors of listed companies for the liquidity crisis at the market.
EBL Securities in its daily market commentary said that the investors’ participation in the market remained sluggish due to the ongoing pessimism.
‘Meanwhile, corporate declarations from several issues in recent times failed to entice investors to inject fresh funds in the market,’ it said.
The average share prices of banks and NBFIs declined by 2.4 per cent and 0.9 per cent respectively.
The share prices of pharmaceutical, food and textile also declined on the day.
The share prices of the textile sector have been falling recently as the government proposed fresh gas price hike that could increase the production cost in the sector, market operators said.
The share prices of Grameenphone surged by 1 per cent on Sunday to extend the gaining streak to six consecutive days as Bangladesh Telecommunication Regulatory Commission on March 19 withdrew the four conditions it imposed on leading mobile phone operator as significant market power.
The average share prices of telecommunication and energy advanced by 1.0 per cent and 0.1 per cent respectively.
Out of the 345 issues traded on the day, 206 declined, 94 advanced and 43 remained unchanged.
DSE blue-chip index DS30 dropped by 1.04 per cent, or 20.73 points, to close at 1,972.25 points.
Shariah index DSES shed 0.20 per cent, or 2.59 points, to finish at 1,281.83 points.
BRAC Bank led the turnover leaders with its shares worth Tk 21.85 crore changing hands on the day.
United Power Generation Company, Dutch-Bangla Bank, Grameenphone, BATBC, Shurwid Industries, Monno Ceramic Industries, JMI Syringes & Medical Devices, National Polymer and Legacy Footwear were the other turnover leaders.
JMISMDL gained the most on the day with an 8.74 -per cent increase in its share prices while Bank Asia was the worst loser, shedding 10.52 per cent.
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