Stocks keep falling on sharp rise in COVID-19 cases

Staff Correspondent | Published: 22:45, Jun 02,2020

 
 

Dhaka stocks on Tuesday continued bleeding as a sharp rise in the coronavirus infection cases in the country confirmed the investors’ fear that the pandemic would linger and consequently the country’s economy would have to wait more days to make a recovery from the pandemic fallout.

DSEX, the key index of the Dhaka Stock Exchange, dropped by 0.74 per cent, or 29.91 points, to close at 3,969.58 points on Tuesday after losing 60.95 points in the previous session.

Before the two-day losses, the DSEX had gained 83.86 points in two sessions that included March 25.

The country’s stock market reopened on Sunday after remaining closed since March 26 due to the coronavirus pandemic-induced general holidays.

Market operators said that share prices continued falling amid selling pressure as the surge in coronavirus infection cases and death toll worried investors about the early recovery of the affected economy.

Investors also feel uncertain about when the business activities would be normal, they said.

The country reported record 2,911 virus-infection cases and 37 deaths on Tuesday.

The COVID-19 has so far infected 52,445 people and killed 709 people across the country.

Business activities of almost all the companies were either shut or limited in April and May, and demand for products dropped drastically due to the pandemic.

Bangladesh Bank governor Fazle Kabir and Bangladesh Securities and Exchange Commission’s newly appointed chairman Shibli Rubayat Ul Islam on Monday held a meeting at the BB headquarters in the capital and discussed the market situation.

The BB governor said that the central bank was likely to allow banks to disburse cash dividend only to the general shareholders before September this year.

Amid the coronavirus pandemic in the country, the BB on May 3 asked all the scheduled banks not to disburse any cash dividend before September 30 this year with a view to ensuring adequate cash in the banking system to support the economic rebuilding process when the epidemic is over.

The regulator-enforced floor price mechanism also limited trading activities on the market as share prices of two-thirds scrips remained unchanged, market operators said.

Only the pharmaceutical companies showed movements as the sector logged 65 per cent of the total turnover on average in the last three trading sessions.

Telecommunications, bank and energy sectors accounted for 15-20 per cent of the total turnover while shares of companies of the other sectors were rarely traded in the last three days.

Of the 356 scrips traded on the bourse on Monday, 70 declined, just 27 advanced and 230 remained unchanged.

The turnover on the DSE decreased to Tk 155.24 crore on Tuesday compared with that of Tk 197.76 crore in the previous trading session.

The average share prices of pharmaceutical, telecommunication and energy sectors dropped by 1.7 per cent, 1.5 per cent and 0.4 per cent respectively.

EBL Securities in its daily market commentary said, ‘Investors are expecting further economic contraction and reduced earnings of the listed stocks due to the COVID-19 crisis, which has fuelled the index’s downturn.’

The current floor price limitation is impeding many investors’ willingness of liquidating their portfolios, which is causing liquidity shortage on the market.

DSE blue-chip index DS30 shed 1.23 per cent, or 16.67 points, to close at 1,330.50 points on Tuesday.

Shariah index DSES also lost 1.04 per cent, or 9.79 points, to end at 920.20 points.

Square Pharmaceuticals led the turnover chart with shares worth Tk 17.25 crore changing hands on the day.

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