DSE Weekly review

Stocks fall for 3rd week as investors see no hope

Staff Correspondent | Published: 00:00, Oct 20,2019

 
 

Dhaka stocks kept dropping in the past week, extending the losing streak to the third week, as shaky investors continued selling shares to avoid further losses.

DSEX, the key index of the Dhaka Stock Exchange, lost 0.82 per cent, or 39.22 points, over the past week to close at 4,771.00 points on Thursday, the last trading session of the week.

The index shed 198 points in last three weeks. Out of last 13 sessions, the market had 11 negative sessions.

The relentless sell-offs sank the DSEX to almost a three-year low on October 14.

The market rebounded in the very next day following the news state-run Investment Corporation of Bangladesh got Tk 200 crore from Sonali Bank and The City Bank received Tk 50 crore from the Bangladesh Bank and the entities would invest the funds in the stock market.

But, the surge failed to improve the investors’ dampened mood and the market returned to the negative zone on Wednesday as investors lacked confidence in the market regulators who were also blamed for the ongoing market turmoil, market experts said.

They said investors were nervous about the current cold relationship between the Bangladesh Securities and Exchange Commission and the Dhaka Stock Exchange.

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

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

The daily average turnover on the DSE dropped to Tk 312.77 crore in last week from Tk 319.21 crore in the previous week as investors preferred to be on the sidelines.

Market operators said that investors became more panicked in the past week and went for the exit, fearing further losses.

Most of the general and institutional investors remained reluctant to inject funds in the ailing capital market.

On top of that, some of the brokerage houses kept conducting ‘forced sales’ to avoid risk in the margin loans.

The capital market has been tumbling for last nine months with the core index slumping by 1,180 points in the period. The bourse lost Tk 62,000 crore in the market capitalisation in the nine months.

A section of investors took to the streets on October 15 to protest against the relentless fall in the share prices.

Apart from lack of confidence in the regulator, volatility in the financial market that has been struggling for liquidity, approval of weak initial public offerings, prevalence of unscrupulous practices at the market and Grameenphone’s tussle with telecom regulator Bangladesh Telecommunication Regulatory Commission over an audit claim were responsible for the current state of the country’s capital market, market experts said.

They said the sales pressure from the foreign investors made the situation worse.

The foreign investors at the DSE had withdrawn record Tk 680 crore in last seven months (March-September) from the country’s premier bourse.

EBL Securities, in its weekly market commentary, said that last week witnessed investors’ confidence sliding further amidst the deepening of GP-BRTC conflict, taka depreciation against the US dollar and overall instability at the capital market.

‘However, ICB and City Bank’s decision to invest Tk 100 crore and Tk 50 crore respectively has propped up the market for one trading session but failed to create any notable impact as the market slid into red in the following two trading sessions,’ it said.

Share prices of the telecommunication sector plunged by 4.6 per cent, textile by 3.6 per cent, non-bank financial institution by 1.4 per cent, and energy by 0.7 per cent over the past week.

Out of the 355 issues traded in the week, 209 declined, 128 advanced and 18 remained unchanged.

DS30, the blue-chip index of the DSE, lost 1.50 per cent, or 25.52 points, to close at 1,679.02 points.

Shariah index DSES shed 1.56 per cent, or 17.33 points, to finish at 1,094.03 points.

National Tubes led the turnover chart with shares worth Tk 86.53 crore changing hands in the week.

Bangladesh Shipping Corporation, Square Pharmaceuticals, Wata Chemicals, Monno Jute Stafflers, Summit Power, Standard Ceramic Industries, Bangladesh Submarine Cable Company, Beacon Pharmaceuticals and Grameenphone were the other turnover leaders.

Mercantile Insurance gained the most in the week with a 18.15-per cent increase in its share price while Standard Ceramic performed the worst, losing 29.03 per cent.

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