Stocks slump as investors await Robi IPO

Staff Correspondent | Published: 23:23, Nov 15,2020


Dhaka stocks slumped on Sunday after a gain in the previous session as investors offloaded shares ahead of the beginning of Robi’s Tk 523-crore initial public offering subscription.

Many investors also rushed to buy mutual funds, ditching other companies’ shares.

DSEX, the key index of the Dhaka Stock Exchange, lost 0.76 per cent, or 37.29 points, to close at 4,867.73 points on Sunday after gaining 21.33 points in the previous session.

The key index started falling from the very beginning of Sunday’s session and continued to sink until the of the session as investors went for heavy share sales to collect funds as the subscription of Robi’s IPO begins tomorrow, market operators said.

The IPO subscription of Crystal Insurance Company will end today and that of Robi Axiata Limited, the second largest mobile operator in the country, will begin tomorrow.

Due to the overflow of the IPOs on the market, the market has remained depressed in recent weeks as investors gave their attention to the primary market to buy IPOs, they said.

The current commission led by Shibli Rubayat-Ul-Islam approved 11 companies’ IPOs and the subscription of most of the IPOs have already finished.

They said that the subscription of a number of IPOs had stuck a large amount of fund on the primary market.

The recent downward trend on the market sent the share prices of around 70 companies to their floor prices.

The Bangladesh Securities and Exchange Commission introduced the floor price system on March 19 to  check free-fall on the market amid the COVID-19 outbreak in the country.

Many investors rushed to buy units of mutual funds that also destabilise the market, market operators said.

Mutual funds which have 1 per cent contribution to the total market capitalisation at the DSE now lead the turnover and gaining chart on the market.

The sector ranked the second on turnover chart by logging 23.18 per cent of the day’s total turnover.

Unit prices of all mutual funds advanced and almost 13 MFs hit the upper limit of the circuit breaker. The sector gained 7.8 per cent on Sunday.

The pharmaceutical sector seemed to return to rhythm after more than three months as the sector led the turnover chart by capturing 32.79 per cent of the day’s total turnover.

Market analysts said that a number of pharmaceutical companies reported better earnings for the July-September quarter that attracted investors to the sector.

The general insurance sector, which had dominated the market for the last couple of months, plunged by 4.5 per cent after a significant gain in the previous session.

Market operators said that the large capitalised companies failed to attract expected attention due to the domination of low-profile scirps of the two sectors.

EBL Securities in its daily market commentary said, ‘Most of the investors offloaded their holdings mainly from insurance stocks since the prices of the sectoral issues reached an exorbitant level whereas bargain hunters favoured new positions in the mutual funds’ units due to the rally observed in the sector in past few sessions,’ it said.

The turnover on the DSE advanced to Tk 1,197.72 crore on Sunday compared with that of Tk 988.06 crore in the previous trading session.

DSE blue-chip index DS30 also lost 0.88 per cent, or 15.06 points, to close at 1,696.53 points on the day.

Shariah index DSES also shed 0.25 per cent, or 2.84 points, to settle at 1,114.59 points.

Of the 357 scrips traded on the DSE on Sunday, 167 declined, 99 advanced and 84 remained unchanged.

Beximco Pharmaceuticals led the turnover chart with its shares worth Tk 74.07 crore changing hands on the day.

Bangladesh Export Import Company, Square Pharmaceuticals, Grameen Scheme Two, Trust Bank 1st Mutual Fund, Exim Bank 1st Mutual Fund, First Bangladesh Fixed Income Fund, Associated Oxygen, AB Bank 1st Mutual Fund and NLI 1st Mutual Fund were the other turnover leaders on the day.

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