Dhaka stocks on Sunday fell again, after a two-day pause, with the key index dropping below 4,500 points for the first time in 41 months as investors resumed sales.
DSEX, the key index of the Dhaka Stock Exchange, on Sunday lost 0.35 per cent or 15.95 points to close at 4,498.49 points, breaching another psychological limit of 4,500 points.
The DSEX gained by only 7.5 points in the previous two sessions following a four-day rout that had resulted in 197-point loss.
On Sunday, the index hit its lowest since July 10, 2016, when it was at 4,495.18 points.
Market operators said that many investors, muddled by the consistent volatility in the market and gloomy macro economic outlook, resumed share sales on the day.
A series of record lows for the DSEX with elevated volatility and falls in valuation of major companies had made the investors jittery, they said.
The DSEX had lost more than 1,451 points in the last 10 months, eroding funds worth Tk 75,000 crore from the capital market.
The investors were seen losing their appetite for risks as they seldom saw any signs of recovery from the record making plunges.
Some institutional investors went for bargain hunting to keep the market afloat, but heavy sell-offs by other investors continued to drag the market down.
Decline in the private sector credit growth to a nine year low, negative export earnings for the last four months, poor tax revenue collection and heavy government borrowing were adding to the waning investors’ confidence.
Besides, continued sale of shares by foreign investors and forced sales by the brokerage houses were keeping the market from recovering.
Foreign investors had withdrawn around Tk 970 crore in funds in the last 10 months.
Approval of fundamentally weak companies by the Bangladesh Securities and Exchange Commission, prevalence of market manipulations, absence of governance and poor regulatory control kept threatening the confidence of investors, they said.
As a result, the regulatory relaxations and incentives offered by the BSEC to the market intermediaries had failed to bring about any change in the market scenario, they said.
Despite being in possession of idle funds, banks remained reluctant to invest in the capital market, given its ailing condition.
Share prices of Ring Shine Textiles failed to shine on the very next day after its debut trading as investors became cautious about its entry with a whopping paid up capital of Tk 435 crore.
The company’s paid up capital was set to hit Tk 500 crore soon as it had declared 15 per cent stock dividends.
Ring Shine performed the worst, losing 10.66 per cent to close at Tk 13.4 per share on Sunday, after closing at Tk 15 per share on its debut day on Thursday.
EBL Securities in its daily market commentary said, ‘Sceptical investors continued dampening their holdings amidst depressed macro outlook, which added further woes to the overall performance of the capital market of the country.’
Average share prices of cement, textile, non-bank financial institution and bank sectors dropped by 2.1 per cent, 1.2 per cent, 0.8 per cent and 0.3 per cent respectively.
Average share prices of telecommunication, food and pharmaceutical sectors gained by 1.0 per cent, 0.3 per cent and 0.1 per cent respectively.
Turnover on the DSE plunged to Tk 306.54 crore on Sunday from Tk 349.59 crore on the previous trading session.
Out of the 343 scrips traded on Sunday, 201 declined, 100 advanced and 51 remained unchanged.
The DSE blue-chip index, DS30, shed 0.61 per cent or 9.5 points to close at 1,538.62 points.
Shariah index DSES lost 0.15 per cent or 1.54 points to end at 1,015.05 points.
Ring Shine Textiles led the turnover chart with its shares worth Tk 30.65 crore changing hands on the day.
Beacon Pharmaceuticals, Northern Insurance, Khulna Power Company, Paramount Textiles, City General Insurance, Progress Life Insurance, Bangladesh National Life Insurance Company, Shurwid Industries and Sinobangla Industries were the other turnover leaders.
Monno Jute Stafflers gained the most on the day with a 7.49-per cent increase in its share prices while Ring Shine Textiles performed the worst, losing 10.66 per cent.
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