Dhaka stocks kept plunging for third consecutive week in the past week as investors were grappling with the concern over liquidity crisis in the banking sector due to a number of government moves.
DSEX, the key index of the DSE, plunged 1.58 per cent, or 79.13 points, over the week to close at 4,933.89 points on Thursday, the last trading session of the shortened week.
The core index lost 303 points in the last three weeks, losing Tk 19,000 crore in market capitalisation.
The market gained in the first session of the week on Sunday as institutional investors went on bargain hunting amid regulator’s intervention.
The market began to slide on Monday as concern over liquidity crisis in the financial market began to intensify following government move to divert funds of state-owned enterprises to exchequer. Trading remained closed on September 10 on the occasion of Ashura.
The market plunged in the next session, causing the key index hitting 32-month low on Wednesday as the investors went on panic driven share sales, market operators said.
The selloffs, however, eased in the last session amid regulator’s intervention.
The overall market scenario was gloomy over the week as investors lost confidence on the market that has been struggling for months, they said.
The new concern of liquidity crisis following a number of government moves ignited share sales in recent days.
The government decision to divert the idle funds of Tk 2,12,100 crore of state-owned corporations to exchequer feared to deteriorate the current liquidity condition.
The funds withdrawal may also hit profit making ability of the listed government entities as the companies earned huge profits from the fixed deposits.
The government borrowing from the banking channel suddenly surged in recent days and that became another concern for the businesses.
The government borrowed Tk 26,248.52 crore from the banking system in between July 1 to August 20 of the current fiscal year 2019-20.
On top of that, The Bangladesh Bank has recently directed the banks to maintain cash reserve ratio and statutory liquidity ratio for their exposure through offshore banking operations.
Share prices of large capitalised United Power Generation Company plummeted by 17.7 per cent on the week while British American Tobacco and Square Pharmaceuticals dropped by 2.9 per cent and 1.0 per cent respectively that fuelled the volatility in the market.
EBL Securities in its weekly market commentary said, ‘Investors’ confidence was shattered going into this week which was exacerbated by the news of export slump in August. Several large cap stocks had suffered large slump which contributed to the fall in index.’
Average share prices of all the sectors except telecommunication dropped over the week.
Share prices of textile, energy, non-bank financial institution and bank dropped by 4.6 per cent, 3.8 per cent, 1.7 per cent and 1.5 per cent respectively.
The daily average turnover on DSE inched up to Tk 421.54 crore in last week from Tk 394.66 crore in the previous week.
Out of the 355 issues traded in the week, 276 declined, 66 advanced and 13 remained unchanged.
DS30, the blue-chip index of DSE, dropped by 1.2 per cent or 21.14 points, to close at 1,737.06 points.
Shariah index DSES shed 0.88 per cent, or 10.28 points, to finish at 1,156.79 points.
National Tubes led the turnover chart with its shares worth Tk 101.72 crore changing hands in the week.
JMI Syringe, Beacon Pharmaceuticals, Monno Ceramic Industries, Monno Jute Stafflers, Stylecraft Limited, Wata Chemicals, United Power Generation Company, Silco Pharmaceuticals and the IBN SINA Pharmaceuticals were the other turnover leaders.
National Tubes gained the most in the week with a 30.87-per cent increase in its unit prices while United Power Generation Company was the worst loser, shedding 17.39 per cent.
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