Stocks fall for 5th day on PLFS woes

Staff Correspondent | Published: 00:00, Jul 12,2019


Dhaka stocks dipped on Thursday, extending the losing streak to the fifth session as investors remained worried about the government’s decision to wind up People’s Leasing and Financial Services (PLSF).

DSEX, the key index of Dhaka Stock Exchange, lost 0.15 per cent, or 8.32 points, to close at 5,222.30 points on Thursday. The index lost 158 points in last five sessions.

After a slight gain at the beginning on Thursday, the market started falling and finished the session in the negative zone as many investors remained concerned about the financial sector following PLFS liquidation move, market operators said.

The government recently approved a Bangladesh Bank proposal to liquidate PLFS considering fragile state of the non-bank financial institution.

The central bank on Wednesday said that it had started the process of liquidation immediately after getting approval from the finance ministry.

If performed, the liquidation would be the first of its kind in the country.

The shareholders of PLFS, mostly general shareholders (67.10 per cent), anticipated that they would be the worst losers if the company winds up.

According to the liquidation process, the shareholders would be paid after paying back all the liabilities of the company to the claimants.

On Thursday, there was no buyer for the shares of PLFS for the third day.

The shares of the company were traded at its lowest possible prices under circuit breaker for the third day to finish at Tk 3.0 per share on Thursday.

Investors have also been grappling with the penalty tax on the listed companies, gas price hike and Grameenphone woes in recent days, market operators said.

The market fell nine out of 10 trading sessions since the budget passage. In the budget for this fiscal year (2019-20), the government imposed new taxes on the listed companies.

Market operators said investors feared that more financial companies might face liquidation due to their bleak financial situation.

The Bangladesh Telecommunication Regulatory Commission on July 4 reduced the bandwidth for Grameenphone by 30 per cent, which triggered share sales of the company and it lost 8 per cent in last five sessions.

EBL Securities in its daily market commentary said, ‘Investors’ confidence in financial ecosystem is going down with the news of liquidation of People’s Leasing and Financial Services and the BTRC’s move regarding GP contributed to this bleeding.’

Besides, many institutional investors were waiting to see what changes the market regulator brings to the public issue rules as their business depends on the issue, market operators said.

The average share prices of textile, non-bank financial institution, telecommunication and cement dropped by 1.8 per cent, 1.1 per cent, 0.7 per cent and 0.69 per cent respectively.

The average share prices of life insurance, general insurance, energy and bank added 2.0 per cent, 0.4 per cent, 0.3 per cent and 0.2 per cent respectively on bargain hunting.

Out of the 353 scrips traded on the day, 219 declined, 108 increased and 26 remained unchanged.

Turnover on the bourse plunged to Tk 351.08 crore on the day from Tk 408.88 crore in the previous session.

DS30, the blue-chip index of DSE, shed 0.17 per cent, or 3.19 points, to close at 1,857.71 points.

DSE’s Shariah index DSES decreased by 0.30 per cent, or 3.66 points, to close at 1,194.60 points.

National Life Insurance led the turnover chart with its shares worth Tk 18.89 crore changing hands.

Federal Insurance Company, Grameenphone, Rupali Insurance, Monno Ceramics, United Power Generation Company, Asian Tiger Sandhani Life Growth Fund, Runner Automobiles, Sino Bangla Industries and National Tubes were the other turnover leaders.

SEML FBLSL Growth Fund gained the most on the day with a 10-per cent increase in its share while United Air was the worst loser, shedding 10 per cent.   

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