Dhaka stocks dipped for the fourth day on Monday as investors continued selling shares amid sluggishness on the market due to the initial public offering subscription of a number of companies and the domination of only insurance and mutual fund sectors.
Robi’s Tk 523-crore IPO subscription which began on November 17 ended on Monday.
DSEX, the key index of the Dhaka Stock Exchange, lost 0.48 per cent, or 23.26 points, to close at 4,817.70 points on Monday.
The DSEX lost 85.86 points in the last four sessions.
In line with the previous session, the key index started falling sharply, losing 53 points within half an hour of Monday’s session as investors increased share sales amid sluggishness on the market, market operators said.
However, buying pressure in late trading erased some early losses, they said.
They said that a huge amount of funds had been stuck on the primary market due to the IPO subscription of a number company in a short period of time.
A large number of investors placed their IPO applications for acquiring shares of Robi, the second largest mobile operator in the country, they said.
EBL Securities in its daily market commentary said, ‘Investors continued selling off parts of their funds to invest in the ongoing IPOs. Both increased infection rate and death toll from COVID-19 in Bangladesh and in other major export destinations have contributed to the continuous downward trend of the DSEX.’
Market operators said that the investors’ rush to buy shares of insurance companies and units of mutual funds had almost frozen the movement of many better companies.
After observing a sharp rise in share prices of insurance and unit prices of mutual funds, a good number of investors flocked to the sectors, selling off shares of other companies that destabilised the market, they said.
Share prices of general insurance and unit prices of mutual funds soared again by 6.7 per cent and 2.4 per cent respectively on Monday after declining in the last few days.
The Bangladesh Securities and Exchange Commission’s move to investigate unusual price hike of five mutual funds had kept investors cautious.
The BSEC in press statement on Monday clarified that mutual funds are marginable as per its notification issued on December 30, 2010 that withdrew the restriction on margin loans for mutual funds.
Some brokerage houses recently declined providing margin loans to investors for investing in mutual funds that had also contributed to the fall in the prices of the MFs in last week.
Besides, adjustment of bonus dividends has also adversely affected the index.
Among the large capitalised companies, share prices of Square Pharmaceuticals, Beximco Pharmaceuticals, BEXIMCO, BRAC Bank and Grameenphone dropped on the day.
The average share prices of non-bank financial institution, energy, pharmaceutical and bank sectors dropped by 2.5 per cent, 0.9 per cent, 0.8 per cent and 0.2 per cent respectively.
The turnover on the DSE advanced to Tk 621.28 crore compared with that of Tk 495.53 crore in the previous session.
DSE blue-chip index DS30 dropped by 0.91 per cent, or 15.42 points, to close at 1,669.87 points on the day.
Shariah index DSES also shed 1.16 per cent, 13.01 points, to settle at 1,107.68 points.
Of the 357 scrips traded on the DSE on Monday, 134 declined, 124 advanced and 86 remained unchanged.
Beximco Pharmaceuticals led the turnover chart with its shares worth Tk 30.54 crore changing hands on the day.
Square Pharmaceuticals, Eastern Insurance, Nitol Insurance, Asia Insurance, Provati Insurance, BRAC Bank, ADN Telecom, Northern Insurance and Pioneer Insurance were the other turnover leaders on the day.
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