Dhaka stocks slumped on Monday with the share prices of Grameenphone taking a heavy beating as the Appellate Division on the day ordered the mobile operator to pay Tk 1,000 crore more in audit claim to the telecom regulator by three months.
DSEX, the key index of the Dhaka Stock Exchange, extended its losing streak to the third day on Monday due to the GP woes and weak financial earnings disclosures by a number of companies.
DSEX lost 1.02 per cent, or 48.00 points, to close at 4,650.89 points on the day taking its total losses in three days to 107 points.
After a slight uptrend at the beginning of the day, the key index started to fall and finished the session deep into the negative zone on mounting GP woes, said market operators.
The Appellate Division on Monday morning ordered GP to pay the remaining Tk 1,000 crore to the Bangladesh Telecommunication Regulatory Commission within three months after the operator paid Tk 1,000 crore to the regulator on Sunday.
Following a year-long dispute between the BTRC and GP over the regulator’s audit claim of Tk 12,579 crore, the AD recently asked the operator to make an initial payment of Tk 2,000 crore, which would be adjusted once the legal process ends.
Share prices of GP plunged by 6.6 per cent or Tk 21 to close at Tk 298.4 on Monday after a massive gain of Tk 24 on Sunday.
Market operators said that GP share prices surged on Sunday as the investors hoped that the operator-regulator dispute would come to an end as GP paid the BTRC Tk 1,000 on the day.
The company’s share prices plunged on Monday following the fresh AD order as the investors became concerned over the financial implications of a payment of Tk 2,000 crore to the BTRC on the company’s balance sheet this year.
The company posted a net profit of Tk 3,450 crore last year against revised net profits of Tk 3,336 crore in 2018.
Apart from the GP issue, a section of the investors were disappointed to see no visible progress in the formation of a special fund for the stock market by the schedule banks even after two weeks they were granted the permission.
The central bank on February 10 issued a circular allowing each schedule bank to borrow up to Tk 200 crore from it at low interest rate to invest in the stock market that created a lot of hype in the market.
Besides, some companies declared poor earnings for the year ended on December 31, 2019 which also disheartened the investors.
Profits of the British American Tobacco Company, IDLC Finance and United Finance dropped in the year ended December 30, 2019 compared to earnings in the previous year while Prime Insurance was sent to the ‘Z’ category for declaring no dividend.
EBL Securities in its daily market commentary said, ‘GP, the large-cap stock took a beating today on the court’s order to pay the remaining Tk 10b in 90 days over its disputed audit claim that led the market to fall today (Monday) while many nervy investors continued to sell shares to opt for safer and more profitable securities.’
Average share prices of telecommunication, non-bank financial institutions, banks and energy sectors dropped by 6.4 per cent, 1.6 per cent, 1.02 per cent and 1 per cent respectively.
The turnover on the DSE dropped to Tk 600.5 crore on Monday from Tk 668.45 crore in the previous trading session.
Out of the 356 scrips traded on Monday, 201 declined, 103 advanced and 51 remained unchanged.
VFS Thread Dyeing led the turnover chart with shares worth Tk 26.93 crore changing hands on the day.
VFS Thread Dyeing gained the most on the day with a 9.96-per cent increase in its share prices while Northern Jute Manufacturing Company fared the worst, shedding 8.74 per cent.
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