Stocks slump as DSE announces Runner debut

Staff Correspondent | Published: 00:00, May 21,2019

 
 

Dhaka stocks slumped on Monday, reversing the surge in the previous session as investors went for selling shares after Dhaka Stock Exchange on the day announced that Runner Automobiles would make its debut on the bourse today.
Market operators said a section of investors cashed their holdings to buy Runner shares while others got panicked as they had little appetite for any new scrip at the volatile market.
DSEX, the key index of DSE, fell by 1.11 per cent, or 59.56 points, to close at 5,276.14 points on Monday after surging by 104.91 points on Sunday.
Market operators said investors went for selling shares from the very beginning of Monday’s session following media reports that Runner would make its debut on Tuesday (today).
The sell-offs intensified after DSE in a web post after half an hour of the day’s trading announced the date of Runner’s debut, they said.
‘The market usually goes down before and during the debut of any scrip because of fund diversion. But, this time some investors also got panicked because of the ongoing volatility at the market which lacked demand for shares,’ said a stockbroker.
He said the investors’ enthusiasm over the Bangladesh Bank’s move to hike banks’ capital market exposure limit that fuelled DSEX’s gain on Sunday fizzled on Monday because of the Runner news and the ongoing liquidity crisis.
Despite concerns over financial sector which remains plagued with liquidity shortage, defaulted loans and scams, investors on Sunday had gone for heavy buying following the BB move.
Because of heavy sell-offs, all the sectors finished in the negative zone on Monday.
Some investors also booked short-term profits on Monday as DSEX rose around 140 points in the previous two sessions.
Asked about the DSE’s decision on Runner’s debut, DSE managing director Majedur Rahman said that when a new good company’s shares got approval for trading on the secondary market, a section of investors moved to adjust their portfolios to invest in the company’s shares.
He also said that the bourse had to ensure supply of new companies in the capital market.
DSE director Minhaj Mannan Emon told New Age that the bourse had earlier decided that trading of the shares of any new company would remain held up before the market revived.
But, the IPO subscription of Runner Automobiles closed long before and it became an obligation to let the shares of the company traded on the bourse.
‘We have to protect the interest of investors on both sides of primary and secondary markets,’ he said.
Former Bangladesh Securities and Exchange Commission chairman Mirza Azizul Islam said that trading of the shares of new companies should not be stopped for a downward trend at the market as such suspension would not be good for the market in the long run.
DSE officials said the subscription of Runner Automobiles’ IPO shares closed on February 10 this year. The company got approval for its IPO from BSEC on November 6 last year.
Runner raised Tk 100 crore from the capital market by issuing its shares at Tk 67-75 each, they said.
Out of the 344 issues traded, 262 declined, 50 advanced and 30 remained unchanged.
Among the major sectors, bank scrips fell by 1.2 per cent, general insurance by 1.2 per cent, textile by 1 per cent, pharmaceuticals by 0.9 per cent, non-bank financial institution by 0.8 per cent and life insurance fell by 0.8 per cent.
Turnover at the bourse also fell to Tk 387.73 crore from Tk 443.55 crore in the previous session.
DSE blue-chip index DS30 dropped by 0.89 per cent, or 16.48 points, to close at 1,833.36 points.
Shariah index DSES shed 1.31 per cent, or 15.96 points, to finish at 1,199.16 points.
BRAC Bank led the chart of turnover leaders with its shares worth Tk 40 crore changing hands on the day.
SK Trims Ltd, Fortune Shoes, Bank Asia, IFIC Bank, Doreen Power, Premier Bank, Rupali Life Insurance, Monno Ceramics and Esquire Knit Composite were the other turnover leaders.
SK Trims Ltd gained the most on the day with a 4.54-per cent increase in its share prices while Al-Arafah Islami Bank was the worst loser, shedding 9.25 per cent.

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