Stocks slump for 3rd day as pessimism grips market

Staff Correspondent | Published: 00:00, Apr 10,2019 | Updated: 00:15, Apr 10,2019

 
 

Dhaka stocks slumped for the third day on Tuesday amid panic selling as relentless fall at the market in recent weeks shattered the investors’ confidence, market operators said.
DSEX, the key index of Dhaka Stock Exchange, plummeted by 0.99 per cent, or 53.48 points, to close at 5,318.75 points on Tuesday. It lost 146 points in last three sessions.
DSEX on Tuesday hit its lowest after December 24 when it was at 5,300.09 points.
In line with the previous session, the market began to fall from the very beginning of the day but rebounded briefly in the middle of the session amid regulatory intervention to halt panic sales, market operators said.
They said that the positive momentum did not sustain for long due to the mounting sales pressure from panicked investors.
Investors, finding no clue behind the prolonged downward trend at the market, preferred to withdraw funds to avoid further losses, they said.
The market has been falling for eleven consecutive weeks, dipping the key index by 630 points that wiped out Tk 22,483 crore in market capitalisation.
The scenario spurred nervous sell-offs, market operators said.
After gaining 732 points in a month before and after the December 30 general election, the market suddenly started falling due mainly to a liquidity crisis in the financial sector that resulted in a rise in the interest rate.
Some other issues fuelled the capital market volatility.
Market operators said declaring Grameenphone as significant market power by Bangladesh Telecommunication Regulatory Commission and the government’s recent demand of Tk 12,579 crore in dues from the mobile phone operator continued hammering the share prices of the largest capitalised company at the market.
The share prices of Grameenphone fell by 13.18 per cent in last six sessions including 2.39 per cent on Tuesday.
The mobile phone operator, however, said that it did not accept the demand issued by BTRC, and had a responsibility to its shareholders to defend the company against all unacceptable claims.
Besides, the recent talks of possessing tax identification number by all investors, random issuance of placement shares, government proposal of hike in gas prices, and doubt over banks’ ability to provide better dividends vitiated the investors’ confidence severely.
The average share prices of all the sectors dropped again on Tuesday.
Grameenphone and United Power Generation Company were among the hardest hit. The plunge in share prices of UPGDCL and GP contributed 42 points to the DSEX’s fall.
The share prices of food sector plunged by 5.2 per cent, energy 3.5 per cent, telecommunication 2.4 per cent, bank 0.81 per cent and non-bank financial institution 0.8 per cent that weighed on the index.
The share prices of Esquire Knit Composite Limited, which made its debut on the bourse on Tuesday, increased slightly by 1.56 per cent to close Tk 45.90 when its cut-off price was determined at Tk 45 per share.
EBL Securities in its daily market commentary said, ‘The broad index observed a nosedive amid selling pressure as investors has lost confidence and eventually the DSEX settled below 5,400 points. Moreover, the enhancement of interest rate against deposits might have influenced many investors to keep funds in banks, rather than investing at the stock market.’
Of the 345 issues traded at DSE on the day, 231 declined, 57advanced and 59 remained unchanged.
The turnover on the bourse declined to Tk 365.91 crore on Tuesday from that of Tk 418.00 crore in the previous trading session.
DSE blue-chip index DS30 also slumped by 1.24 per cent, or 23.99 points, to close at 1,900.53 points.
Shariah index DSES shed 0.61 per cent, or 7.61 points, to finish at 1,232.99 points.
Esquire Knit led the chart of turnover leaders with its shares worth Tk 32.80 crore changing hands on the day.
United Power Generation Company, British American Tobacco Company, Eastern Cables, Grameenphone, Bangladesh Submarine Cable Company, Fortune Shoes, Monno Ceramic Industries, Reckitt Benckiser and Square Pharmaceuticals were the other turnover leaders.
Agrani Insurance Company gained the most on the day with a 6.21-per cent increase in its share prices while RN Spinning Mills was the worst loser, shedding 9.85 per cent.

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