Stocks keep falling on lack of confidence

Staff Correspondent | Published: 00:00, Oct 18,2019


Dhaka stocks kept dropping on Thursday despite efforts of some of the institutional investors to lift the market from the ongoing slump.

The DSEX, the key index of the Dhaka Stock Exchange, dropped by 0.22 per cent, or 10.63 points, to end at 4,770.99 points on Thursday after losing 40.01 points in the previous session.

The market opened with a falling trend, with the DSEX losing 40 points within one hour as investors went for panic-driven share sales to avoid further losses.

The DSEX, however, recovered some losses at the end of the session as some institutional investors in particular went for buying shares to recover investors’ confidence.

The relentless fall in the market hit the investors’ confidence, especially on the market regulators, who were also blamed for the ongoing market turmoil.

The investors were nervous about the on-going cold relationship between the Bangladesh Securities and Exchange Commission and the Dhaka Stock Exchange regarding some issues.

Therefore, they preferred to withdraw investments to avoid further losses, they said.

Some brokerage houses have expressed dissatisfaction over the recent comments of a BSEC commissioner blaming market stakeholders for the market turmoil, instead of shouldering any responsibility.

Although market had gained 110 points in the third trading session of the week following a couple of moves taken by the Bangladesh Bank and the Investment Corporation of Bangladesh after a 6-day rout, market again came back to losing track because of investors’ lack of confidence on the regulators, market operators said.

On Monday, the BB released Tk 50 crore in loans in favour of The City Bank to invest in the capital market in line with the central bank’s move to support the ailing stock market.

The ICB also announced on the same day that it had received Tk 200 crore from state-owned Sonali Bank which would be invested in the secondary market.

Market operators said that investors’ participation continued to stay poor in last trading session of the week as many of the investors preferred to remain on the side-lines.

Turnover on the DSE decreased to Tk 313.14 crore on Thursday from Tk 324.57 crore in the previous session.

Apart from lack of confidence on the regulators, panic-stricken investors were still grappling with a number of issues including the huge rise in non-performing loans in the ailing financial sector, which is also suffering from liquidity crisis, and Grameenphone’s ongoing dispute with the Bangladesh Telecommunication Regulatory Commission.

Grameenphone share prices plunged by 3 per cent on Thursday after the media reported that the government would appoint administrator to the operator over the non-payment of Tk 12,580 crore in audit claims.

EBL Securities in its daily market commentary said, ‘Regulators’ short-term support measures have failed to create any sustainable impact on the DSEX index as after a winning session of 110 points, the index of the prime bourse has returned back to its losing track.’

‘The news of the government appointing administrators to GP and Robi has compelled a section of investors to dispose of GP shares as the conflict between GP and regulators is likely to be dragged around for some time more. Overall, the investors were in a dampened mood and participation was low due to the current instability of the capital market,’ it said.

Average share prices of telecommunication, textile, energy and non-bank financial institution dropped by 3.0 per cent, 1.8 per cent, 0.8 per cent and 0.2 per cent respectively.

Out of the 352 scrips traded on the day, 162 declined, 145 advanced and 43 remained unchanged.

Blue-chip index DS30 also declined by 0.38 per cent, or 6.44 points, to close at 1,679.02 points.

DSE Shariah index DSES shed 0.52 per cent, or 5.71 points, to end up at 1,094.03 points.

National Tubes led the turnover chart with shares worth Tk 18.09 crore that changed hands on the day.

Monno Jute Stafflers, Square Pharmaceuticals, Sonar Bangla Insurance, Bangladesh Shipping Corporation, Grameenphone, Beacon Pharmaceuticals, Paramount Textiles, Wata Chemicals and Monno Ceramic Industries were the other turnover leaders.

Golden Harvest Agro Industries gained the most on the day with a 9.83-per cent increase in its share prices while Meghna Condensed Milk Industries performed the worst, losing 9.49 per cent.  

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