Dhaka stocks fell for the fourth session on Thursday with the turnover hitting a 13-year low as investors were unwilling to buy shares even at the lowest possible prices under the regulator-enforced floor price system due to their growing concerns over the COVID-19 pandemic situation in the country.
DSEX, the key index of the Dhaka Stock Exchange, shed 0.25 per cent, or 10.01 points, to close at 3,953.38 points on Thursday.
The DSEX lost 107 points in the last four sessions.
Prolonged bearishness on the market and the Bangladesh Securities and Exchange Commission-enforced floor price system in the wake of pandemic have left investors reluctant to be active on the trading floor, plunging the trade volume.
The turnover on the DSE slumped to Tk 42.97 crore on Thursday compared with that of Tk 152.63 crore in the previous trading session.
Thursday’s turnover was the lowest after April 24, 2007 when it was Tk 40.39 crore.
The country’s stock market reopened on Sunday after remaining closed since March 26 due to the coronavirus pandemic-induced general holidays.
Stock market analyst and United International University economics department professor Mohammad Musa told New Age that the market should be free from any intervention.
The floor price system is not bringing any good to the market, rather it has hindered the natural flow of the market, he said.
Even though the market may face a sharp fall after the withdrawal of the restriction, the regulator should withdraw it as the market would rebound on its own after falling to a certain level, said Musa.
Market operators said that the number of COVID-19 infection cases in the country continued surging, raising fears that the epidemic would wipe out corporate profits.
Many companies have been reducing wages, cutting jobs, or laying off employees to save their business, they said.
With new 2,423 infection cases and 35 deaths on Thursday, the COVID-19 has infected 57,563 people and killed 781 people across the country.
Most of listed companies have already been severely affected by the shutdown in April and May, and they continue struggling to run their business normally due to lack of demand for products and services and fears of virus spread, market operators said.
It is uncertain when everything would be normal again, they said.
Around 90 per cent of the listed companies have already hit the floor prices set by the regulator and the system does not allow the prices to fall beyond the ceiling, market operators said.
On March 29, the BSEC imposed the floor price system to arrest free fall of share prices on the market amid the coronavirus outbreak.
United Securities in its daily market commentary said, ‘Investors aggressively placed sale orders but buyers were not induced to absorb the sales as the floor prices were above their psychological fair prices.’
Of the 309 scrips traded on the bourse on Thursday, 36 declined, 11 advanced and 262 remained unchanged.
DSE blue-chip index DS30 lost 0.52 per cent, or 7.01 points, to close at 1,321.49 points on Thursday.
Shariah index DSES also decreased by 0.33 per cent, or 3.03 points, to end at 915 points.
Beximco Pharmaceuticals led the turnover chart with its shares worth Tk 6.8 crore changing hands on the day.
Grameenphone, Central Pharmaceutical, Linde Bangladesh, Square Pharmaceuticals, Indo-Bangla Pharmaceuticals, Bangladesh Export Import Company, Bangladesh Submarine Cable Company, Acme Laboratory and ReckittBenckiser were the other turnover leaders.
Linde Bangladesh gained the most on the day with a 2.63-per cent increase in its share prices while Beximco Pharmaceuticals performed the worst, shedding 7.28 per cent.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Stocks