Dhaka stocks continued bleeding, hitting record lows on Thursday despite share prices of heavyweight Grameenphone increasing to its highest possible limit for the day, as the government’s moves to restore investors’ confidence in the market were in vain.
DSEX, the prime index of Dhaka Stock Exchange, dropped by 0.65 per cent, or 32.03 points, to close at 4,855.98 points on Thursday. The DSEX lost 103 points in last three sessions.
The index hit its lowest after December 6, 2016 when it was at 4,846.09 points.
The market started with positive vibe on Thursday as Grameenphone, the largest capitalised company at the market, reached the upper limit of the circuit breaker within minutes following the news that the government would soon solve the mobile operator’s dispute with the Bangladesh Telecommunication Regulatory Commission over an audit claim, market operators said.
But the core index began to fall sharply after half an hour of the session to end the session in the negative zone as investors, depressed about the market situation, continued offloading their holdings, they said.
They said the country’s financial market remained volatile for an increase in non-performing loans, various scams and liquidity dearth that spilled over into the capital market.
Besides the financial sector woes, a rise in unscrupulous elements at the market, lack of product diversity and secured products, approval of weak companies’ initial public offerings pummelled the market, they said.
The Bangladesh Securities and Exchange Commission allegedly favoured an influential quarter that hampered the interest of the stock market.
Market experts said the regulator failed to establish rule of law at the market.
They said that the current commission made several rules that apparently upheld the interest of a small quarter.
The approval of IPOs with anomalies in the financial statements became regular topics among the stakeholders that hit investors’ trust in other financial documents of the listed companies.
Coppertech Industries set an example as the BSEC directed the DSE to enlist the company on the bourse, ignoring allegations of financial statement engineering by the company.
The foreign investors withdrew around Tk 619 crore in last seven months that also became a heavy drag on the index, market operators said.
Stock market expert and United International University professor Mohammad Musa told New Age that prolonged bearishness at the market lowered the investors’ confidence.
Lack of diversity of products at the market was also a reason for poor participation of investors, he said.
Issuing huge number of placement shares right before IPO approval has become a regular phenomenon in last four years that made the market more volatile as the placement shares holders dumped the shares on the general investors after the end of lock-in period.
The general investors were the ultimate victims of the market manipulation.
On Monday, finance minister AHM Mustafa Kamal held a meeting with the market regulators and stakeholders to ensure them that the government would provide all supports for the capital market development, but investors found no solution to the existing problems in his statement.
Share prices of all the sectors except telecommunication dropped on the day.
Share prices of textile dropped by 2.08 per cent, energy 1.88 per cent, pharmaceuticals 1.50 per cent and bank 0.28 per cent.
Kamal on Wednesday said that the government would solve the audit claim dispute of Grameenphone through discussion.
GP closed the day at Tk 335.3 per share, rising from Tk 308.4 per share in the previous session. The surge moved the index 57 points positive on the day, saving the index from further fall.
Out of the 352 scrips traded on Thursday, 269 declined, 46 advanced and 38 remained unchanged.
Turnover on the bourse increased slightly to Tk 384.96 crore on Thursday from Tk 371.53 crore in the previous session on heavy share sales.
DSE Shariah index DSES shed 0.65 per cent, or 7.42 points, to close at 1,123.21 points.
Blue-chip index DS30, however, added 0.004 per cent, or 0.07 points, to close at 1,735.93 points.
National Tubes led the turnover chart with its shares worth Tk 19.28 crore changing hands on the day.
Fortune Shoes, Square Pharmaceuticals, Monno Jute Stafflers, Beacon Pharmaceuticals, JMI Syringe, United Power Generation Company, Legacy Footwear, Monno Ceramics and National Polymer were the other turnover leaders.
Grameenphone gained the most on the day with an 8.72-per cent increase in its share prices while Bangladesh Industrial Finance Company was the worst loser, shedding 10 per cent.
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