Dhaka stocks plummeted for the second consecutive trading session on Monday as investors continued selling shares, fearing that Bangladesh Bank might declare a tightened monetary policy later this month.
DSEX, the key index of Dhaka Stock Exchange, lost 0.98 per cent, or 60.04 points, to close at 6,117.89 points on Monday after losing 61.42 points in the previous session.
The DSEX lost 262 points in last eight trading sessions despite a slight gain on January 11.
Market operators said the market opened positive, but after 20 minutes of trading it moved downward sharply as panic selling continued.
The BB may announce monetary policy statement for the second half of the financial year 2017-18 at the end of January, tightening money flow in the financial sector.
The central bank may consider the upward trend in food inflation and the election year when declaring the MPS that could hamper the fund flow to the capital market, market experts said.
The BB has already taken a step to curtail the advanced deposit ratio of the banks that may cause liquidity crisis in the stock market, they said.
The Centre for Policy Dialogue’s damning observations about the country’s banking sector also dampened the investors’ mood.
The think tank at a briefing on Saturday said that the country’s banking sector was plagued by financial scams, non-performing loans, inefficiency and slack monitoring and supervision in 2017.
On Monday, all the sectors except pharmaceuticals declined.
Financial sectors led the nosedive as the average share prices of bank and non-bank financial institution sectors dropped by 1.8 per cent and 1.7 per cent respectively.
Out of the 30 traded bank scrips, 26 declined, just two advanced and two remained unchanged while out of the 23 NBFI issues, 18 declined, just one advanced and four remained unchanged.
Cement, energy and telecommunications also declined by 1.6 per cent, 1.00 per cent and 0.5 per cent respectively on Monday.
Among the prominent scrips, BRAC Bank, City Bank, Beximco Pharmaceuticals and Grameenphone were the worse losers on the day.
The turnover at the bourse, however, increased to Tk 406.14 crore on Monday from that of Tk 328.08 crore in the previous session.
‘The capital bourse of the country witnessed another session of notable price correction today [Monday] as liquidity shortage has made the market lose its vibrancy,’ said EBL Securities in its daily market commentary.
‘Stocks from the bank sector have continued taking the brunt,’ it said adding that investors’ selling pressure was spurred on stocks from bank, NBFI and fuel and power sectors.
Of the 335 companies and mutual funds traded, 256 declined, 40 advanced, and 40 remained unchanged.
DS30, the blue-chip index of the DSE, also shed 0.78 per cent, or 17.63 points, to finish at 2,224.86 points after losing 17.74 points in the previous session.
Shariah index DSES declined by 0.78 per cent, 7.93 points, to close at 1,376.39 points.
Grameenphone led the turnover chart on the day with its shares worth Tk 39.50 crore changing hands.
Square Pharmaceuticals, IFAD Autos, Merchant Bank, National Tubes, City Bank, United Power Generation Company, BD Thai, Dragon Sweater and BRAC Bank were the other turnover leaders.
Popular Life Insurance Company increased most with a 3.79-per cent rise in its share prices, while Jute Spinners Limited was the worst loser, shedding 8.81 per cent.