Stocks drop again as market turmoil drags on

Staff Correspondent | Published: 00:00, Oct 22,2019

 
 

Dhaka stocks dropped again on Monday as the regulators failed to take proper decisions to revive the country’s ailing stock market and the investors’ confidence in the market.

DSEX, the key index of the Dhaka Stock Exchange, lost 0.43 per cent, or 20.67 points, to end at 4,761.42 points on Monday after gaining 11.09 points in the previous session.

The DSEX fell by 175 points in last 13 trading sessions with just two positive sessions.

After a flat movement at the beginning on Monday, the market started falling and ended in the negative zone as investors went for share sales amid lack of confidence in the market, market operators said.

They said that investors remained cautious as the market scenario were not improving.

The market has been falling for last nine months, but the government and regulators couldn’t take any proper decision to revive the investors’ confidence.

The institutional investors were reluctant to inject funds in the ailing stock market as they already witnessed a sharp fall in their investments.

The DSEX plummeted by 1,190 points in the nine months’ rout with Tk 62,700 crore wiped off the DSE market capitalisation.

Share prices of the bank sector increased by 1.4 per cent on Monday as a number of banks called board meetings to declare the third quarter financial reports. The surge saved the market from further fall.

Out of 30 traded bank scrips, share prices of 24 advanced, three declined and three remained unchanged.

Some of the brokerage house continued conducting forced sales to avoid further erosion in value of margin loans.

The Investment Corporation of Bangladesh recently received Tk 200 crore from Sonali Bank and The City Bank received Tk 50 crore from the Bangladesh Bank. State-run ICB and private commercial bank The City Bank would invest the funds in the capital market but the moves failed to change the market situation.

Share prices of Grameenphone dropped by 1.25 per cent on Monday as the company declared that its profit fell by 13.92 per cent in the third quarter (July-September) period compared with that in the same period of the previous year.

Turnover on the DSE increased to Tk 350.49 crore on Monday from Tk 312.63 crore in the previous session.

Apart from lack of confidence in the regulators, investors have been grappling with a number of issues including rising non-performing loans and liquidity shortage in the financial sector, and Grameenphone’s ongoing dispute with the BTRC over an audit claim.

The average share prices of textile, telecommunication and non-bank financial institution sectors dropped by 2.9 per cent, 1.2 per cent and 0.6 per cent respectively.

EBL Securities in its daily market commentary said that the pessimist investors started the session on a negative note and went for selling of shares.

‘However, the turnover increased by 12 per cent over the previous session as investors showed their interest in earning disclosures of specific fundamental issues, especially in banks,’ it said.

Out of the 352 scrips traded on the day, 250 declined, 63 advanced, and 41 remained unchanged.

Blue-chip index DS30 declined by 0.62 per cent, or 10.45 points, to close at 1,675.49 points.

DSE Shariah index DSES shed 0.88 per cent, or 9.68 points, to end at 1,089.52 points.

United Power Generation Company led the turnover chart with its shares worth Tk 12.81 crore changing hands on the day.

National Tubes, Premier Bank, Wata Chemical, Square Pharmaceuticals, Monno Jute Stafflers, Paramount Textile, Continental Insurance, Summit Power and Eastern Insurance were the other turnover leaders.

UPGDCL gained the most on the day with a 7.20-per cent increase in its share prices while CVO Petrochemical Refinery performed the worst, losing 9.69 per cent.

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