Stocks plunge again as Kamal’s comment triggers sell-offs

Staff Correspondent | Published: 00:00, Apr 24,2019 | Updated: 22:34, Apr 23,2019

 
 

Stock investors protest at the prolonged downward trend at the market, in front of the Dhaka Stock Exchange building at Motijheel in Dhaka on Tuesday. — New Age photo

Dhaka stocks plunged again on Tuesday as investors went for selling shares heavily after the finance minister in the previous day commented that the recent slump at the stock market was not unusual, rubbing salt into the wound.
Of the 345 issues traded at Dhaka Stock Exchange on the day, 267 declined, 34 advanced and 41 remained unchanged.
DSE’s key index, DSEX, plunged by 1.18 per cent, or 62.87 points, to close at 5,260.85 points on Tuesday after gaining 74.50 points in the previous three sessions.
The market began to fall from the very beginning of the day’s session and descended more sharply as the time passed as investors increased share sales following the finance minister AHM Mustafa Kamal’s comments on the stock market, market operators said.
Kamal on Monday said that he found no problem with the prevailing situation at the country’s stock market saying that ups and downs in the market were normal.
‘I don’t see that the market is in bad shape,’ he said while talking to reporters after a meeting with officials of Bangladesh Securities and Exchange Commission in capital Dhaka.
Kamal made the comments in a situation when the DSEX lost 630 points in a 13-week bear run, its longest ever, and wiped out Tk 24,824 crore from the market capitalisation in the period.
The statements drew criticisms from every corner and investors questioned what the bottom line of the index was that would make the government worried about the market.
Asked whether there was any impact of the finance minister’s comments on Tuesday’s market movement, former adviser to an interim government AB Mirza Azizul Islam declined to comment on the issue.
Mirza Aziz, also a former BSEC chairman, said, ‘The finance minister on Monday also said that the economy and the stock market were interconnected and when the economy grew, the capital market also advanced.’
‘According to the finance minister himself, the county’s GDP growth would be 8.13 per cent. Then, why is the capital market not improving?’ he said.
He said that there was no reason for the continuous plunge at the market.
He urged investors not to get panicked and to invest in the undervalued stocks.
Share market analyst and United International University professor Mohammad Musa told New Age that the finance minister would not have made such statement.
He said that if the current situation worsened, it would be tougher for the market to recover.
EBL Securities in its daily market commentary said, ‘The recent meeting of the finance minister with the officials of Bangladesh Securities and Exchange Commission failed to revive confidence among investors under an environment of liquidity crunch in the money market.’
Investors appreciated the finance minister’s emergency meeting with market regulator BSEC that was convened one day after his arrival in the country from the USA against the backdrop of continuous volatility at the market.
But, investors were disheartened by the comments made by Kamal over the market situation, market operators said.
They said investors also felt insulted as Kamal said that most of the investors in the country were not well-informed.
Investors on Tuesday took to the streets against the relentless fall in share prices at the market.
They demanded an immediate resignation of BSEC chairman M Khairul Hossain for his failure in regaining investors’ confidence during his 8-year tenure.
They also urged the government to find out the manipulators in the market and bring them to book.
Market operators said the commission with the support of some institutional investors including state-run Investment Corporation of Bangladesh kept the market afloat in the previous three sessions.
Investors lost confidence over the market as the regulator continuously failed to address manipulations and wrongdoings and introduce new products, and it approved weak companies’ IPO with huge amount of placement shares, they said.
Besides, the liquidity shortage in the financial sector was also a concern among investors.
The Grameenphone’s tussle with the telecom regulator over Tk 12,500 crore in dues added fuel to the volatility.
The average share prices of non-bank financial institution decreased by 2.6 per cent, textile 2.3 per cent, energy 1.8 per cent, telecommunication 1.4 per cent and bank 0.7 per cent.
Among the large capitalised scrips, the share prices of Grameenphone, United Power Generation Company, Square Pharmaceuticals and ICB plunged most on the day.
The turnover on the bourse dropped to Tk 298.62 crore on Tuesday from that of Tk 351.84 crore in the previous trading session.
DSE blue-chip index DS30 also plunged by 1.06 per cent, or 20.20 points, to close at 1,872.74 points.
Shariah index DSES shed 1.28 per cent, or 15.80 points, to finish at 1,215.41 points.
Fortune Shoes led the chart of turnover leaders with its shares worth Tk 34.54 crore changing hands on the day.
Monno Ceramic Industries, Bangladesh Submarine Cable Company, United Power Generation Company, Bangladesh Shipping Corporation, National Tubes, Monno Jute Stafflers, Jamuna Bank, Esquire Knit and Doreen Power were the other turnover leaders.
National Life Insurance Company gained the most on the day with a 7.56-per cent increase in its share prices while Monno Ceramic Industries was the worst loser, shedding 8.72 per cent.

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