Stocks dip as virus brings economy near standstill

Staff Correspondent | Published: 22:28, Mar 24,2020


Dhaka stocks decreased on Tuesday with the shares of two-thirds of the scrips were being traded at the lower limit of the recently introduced circuit breaker as the government put various restrictions on public movement to curb the spread of coronavirus, bringing economic activities in the country to a virtual standstill.

DSEX, the key index of the Dhaka Stock Exchange, lost 0.2 per cent, or 8.18 points, to close at 3,976.56 points on the day after gaining 24.57 points in the previous session.

After a hike at the beginning, the key index started falling and lost 24 points within an hour as panicked investors tried to sell off shares within the regulatory ceiling on the companies’ price fall, market operators said.

The index, however, recovered some losses later to end the session with a marginal loss as some institutional investors went for buying shares at lower prices, they said.

They said that share prices of two-thirds of scrips were traded at the lower limit of the circuit breaker as there was no buyer for the companies due to the growing fear over coronavirus pandemic.

The Bangladesh Securities and Exchange Commission on March 19 set the lowest prices for all equities to save the market from a plunge.

The number of coronavirus infected people was rising globally as well as in Bangladesh. The Institute of Epidemiology Disease Control and Research confirmed on Tuesday that the novel coronavirus had so far killed four people and infected 39 in Bangladesh.


Therefore, investors were reluctant to continue trading activities due to the fearful situation in the country, market operators said.

The government declared public holidays from March 26 to April 4, shut public transports, and extended closing period for educational institutions to contain the spread of the highly contagious virus. It also deployed the army to check public gathering and maintain social distancing.

Market operators said that the measures had brought the business activities to a near standstill and people were more concerned about their lives rather than other activities.

Business organisations are constantly warning that the country’s economy is under threat due to the COVID-19 epidemic and the scale of the impact depends on the extent of the spread and the duration of the outbreak.

Around 3.82 lakh people across the world became infected with the deadly virus and 16,587 deaths were reported globally till Tuesday.

Before the regulatory ceiling on index fall was introduced, the DSEX lost 1,164 points in 22 trading sessions and hit a seven-year low mainly due to the global outbreak of the COVID-19.

The Bangladesh Bank on Monday reduced the mandatory cash reserve ratio for the banks to 5 per cent from 5.5 per cent and rate of repurchase agreements (REPO) to 5.75 per cent from 6 per cent in order to keep enough liquidity in the financial market during the coronavirus pandemic that might influence some banks to invest in the market.

Of the 356 scrips traded on the bourse on Tuesday, 85 declined, 25 advanced and 242 remained unchanged.

EBL Securities in its daily market commentary said that the Dhaka bourse had come to a stagnant situation with very low market participation as investors were reluctant to buy stocks in the current economic situation.

The turnover on the DSE dropped to Tk 139.54 crore on Tuesday compared with Tk 254.30 crore in the previous trading session.

The average share prices of bank, pharmaceutical and energy sectors dropped by 0.4 per cent, 0.2 per cent and 0.19 per cent respectively.

DSE blue-chip index DS30 shed 0.002 per cent, or 0.03 points, to close at 1,323.77 points on the day.

Shariah index DSES also lost 0.16 per cent, or 1.54 points, to end at 917.27 points.

Linde Bangladesh led the turnover chart with shares worth Tk 14.43 crore changing hands on the day.

LafargeHolcim Bangladesh, Monno Ceramics, Mercantile Bank, Renata Limited, Orion Pharmaceuticals, Apex Footwear, Square Pharmaceuticals, Silva Pharmaceuticals and Central Pharmaceuticals were the other turnover leaders.

Premier Cement Mills gained the most on the day with a 5.43-per cent increase in its share prices while Popular Life Insurance Company performed the worst, shedding 8.09 per cent.

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