Dhaka stocks dropped for the third day on Tuesday with the turnover hitting a 14-month low as investors’ worries over banks’ liquidity crisis intensified.
DSEX, the key index of Dhaka Stock Exchange, declined by 0.56 per cent, or 29.91 points, to close at 5,217.91 points on Tuesday. The index lost 58 points in last three sessions.
After a brief gain at the beginning, the market began to fall sharply and finished the session in the negative zone as investors remained worried over the ongoing liquidity crisis in the country’s financial sector, market operators said.
They said that the media in recent days repeatedly exposed banks’ liquidity crisis that weakened investors’ risk-taking appetite.
Market operators said investors were reluctant to make investments as the media reported that the dearth of liquidity in the financial sector was getting worse.
A number of media reports in past few days highlighting the banks’ woes in collecting deposit and maintaining liquidity position stable have made investors concerned, they said.
Many investors especially the institutional investors do not have enough funds to invest in the market, they said.
They said investors also lost huge amount of funds in recent plunges at the market and were reluctant to sell shares at lower prices.
Therefore, trading on the bourse became slow on Tuesday with the total executed trades and average turnover hitting fresh 14-month lows.
The turnover on bourse plunged to Tk 251.36 crore on Tuesday from Tk 305.03 crore in the previous session. Tuesday’s turnover was the lowest after March 25 last year when it was at Tk 224.53 crore.
The total number of executed trades was 72,470 on Tuesday, which was the lowest number of total trades after March 28, 2018 when it was 69,725.
Officials of a number of brokerage houses also said that many of the investors were also reluctant to take fresh positions in the month of Ramadan when trading on the bourse usually becomes slow.
They also said that the government and the market regulator Bangladesh Securities and Exchange Commission had recently taken a number of initiatives to prop up the market but investors were yet to regain confidence over the market.
Bangladesh Bank is yet to give Investment Corporation of Bangladesh Tk 856 crore to be distributed as loans among the small-scale investors affected by the recent plunge and yet to increase the banks’ investment limit in the capital market, they said.
EBL Securities in its daily market review said, ‘The index went down below 5,300-point mark as worried investors continued their selling spree amid concern over the prevailing liquidity crunch in the financial sector. Moreover, investors’ sentiment regarding the market remained shaky due to the ongoing earnings declarations.’
The average share prices of all the sectors except jute dropped on the day.
The share prices of non-bank financial institutions, textile, bank and telecommunication sectors decreased by 0.8 per cent, 0.6 per cent, 0.5 per cent and 0.5 per cent respectively.
Out of the 343 issues traded on Tuesday, 219 declined, 76 advanced and 52 remained unchanged.
DSE blue-chip index DS30 shed 0.59 per cent, or 10.88 points, to close at 1,825.51 points.
Shariah index DSES lost 0.57 per cent, or 6.99 points, to finish at 1,203.36 points.
Shenzhen Stock Exchange and Dhaka Stock Exchange launched the Bangladesh Window on the V-Next Alliance Platform on May 6 in China under the strategic investor agreement signed in 2018 between DSE and the Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange, said a DSE press release issued on Tuesday.
V-Next platform is designed to facilitate Chinese investment into prospective companies in Bangladesh through information dissemination, online live road shows and face-to-face business seminars.
Through specialised online information management and road show system, the platform displays information about Bangladeshi companies/projects in search of funding from Chinese and other investors from 38 countries and regions looking for suitable projects.
The Bangladesh Window will facilitate Bangladeshi listed and unlisted companies to explore equity and strategic partnership, seek business collaboration, and diversify business and technology channels in China.
DSE and SZSE will play their roles as capital market organisers to promote Bangladeshi and Chinese market participants to jointly build cooperation network and share resource channels.
Around 20 Bangladesh enterprises from sectors such as information, communication and modern manufacturing conducted road shows on the V-Next Platform via ‘onsite meeting + live broadcasting’ on the inaugural day.
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