Dhaka stocks plunged on Monday as investors, unnerved by the recent downward trend on the market, went for panic selling.
The turnover on the Dhaka Stock Exchange hit a seven-month low on the day.
DSEX, the key index of the DSE, lost 1.65 per cent, or 90.77 points, to close at 5,385.21 points on Monday.
The DSEX lost 160 points in the last four sessions.
In line with the previous session, the core index started falling from the very beginning of Monday’s session and descended more firmly as the session progressed as investors increased share sales amid gloominess on the market, market operators said.
They said that investors became panicky as the market continued falling for the last one month.
The DSEX has lost 524 points since January 14.
Market operators said that activities on the market became slow as many investors declined to sell shares at lower prices while some others found it safe to observe the market trend.
Turnover on the DSE plunged to Tk 467.08 crore on Monday compared with that of Tk 694.13 crore in the previous session.
Monday’s turnover was the lowest after July 29, 2000 when it was Tk 399.52 crore.
Market analysts said that investors, especially the institutional ones, became watchful and paused trading shares that intensified the bearishness on the market.
The market movement was mostly dependent on a few companies that discouraged investors, they said.
Only six companies accounted for 52.23 per cent of the day’s total turnover while BEXIMCO alone logged 22.7 per cent with its shares worth Tk 105.99 crore being traded on Monday.
EBL Securities in its daily market commentary said, ‘Investors opted to liquidate their portfolios and decided to sit on cash in the absence of any major trigger on the market, while upcoming dividend declarations by December-end companies kept some investors on the sideline to observe the market movement.’
The recent bear run occurred due to a host of reasons, including the setting of ceiling on margin loan rate, approval of a number of companies’ initial public offerings in a short period of time, dependence on a few companies and repeated changes in regulatory policies, market operators said.
The Bangladesh Securities and Exchange Commission on January 13 asked the market intermediaries to reduce margin loan interest rate to 12 per cent by January 31.
Though the BSEC deferred the deadline to June 30, many market intermediaries continued share sales to adjust the rate on time and also stopped proving new loans to clients that created some liquidity shortage on the market, market operators said.
Trading of shares of eGeneration Limited will commence on the country’s stock exchanges today.
More than 80 companies hit their floor prices, making the market immoveable.
The BSEC on March 19, 2020 introduced the floor price system to bar companies’ share prices from falling below a certain level amid the COVID-19 outbreak.
Of the 357 scrips traded on the DSE on Monday, 219 declined, just 23 advanced and 101 remained unchanged.
DS30, a composition of 30 large capitalised companies, plunged by 2.28 per cent, or 48.20 points, to close at 2,057.36 points on the day.
Out of the 30 large capitalised companies, 27 declined, just one advanced and two remained unchanged.
Robi Axiata Limited, which made its debut on December 21, declared no dividend for 2020 despite making profits of Tk 155 crore that frustrated investors, market operators said.
Share prices of the company plunged by 25 per cent in the last four trading sessions.
Shariah index DSES also shed 1.64 per cent, or 20.45 points, to settle at 1,222.03 points.
Robi, British American Tobacco, Beximco Pharmaceuticals, LankaBangla Finance, Square Pharmaceuticals, Summit Power, Beacon Pharmaceuticals, GBB Power and Grameenphone were the other turnover leaders on the day.
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