Dhaka stocks slumped on Tuesday, extending the losing streak to the fifth session as the current bearish trend made investors very worried.
DSEX, the key index of the Dhaka Stock Exchange, lost 1.25 per cent, or 67.5 points, to close at 5,317.71 points on Tuesday.
The DSEX lost 127.5 points in the last five sessions.
After a slight hike at the beginning of Tuesday’s session, the key index moved downwards to finish the session deep into the negative zone as investors continued selling shares to avoid further losses, market operators said.
They said that investors were very anxious as the market had been falling sharply for more than one month and there was no sign of recovery.
The investors’ 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 next movement of the market, they said.
The DSEX had closed at 5,909.30 points on January 14, hitting a two-year high. But, the index has lost 591.5 points since then.
Market analysts said that the market movement had been mostly dependent on a very few numbers of companies for around a year.
Only five companies accounted for 52.75 per cent of Tuesday’s total turnover while BEXIMCO alone logged 31.22 per cent with its shares worth Tk 184 crore being traded on Tuesday.
More and more companies hit their floor prices every day.
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.
EBL Securities in its daily market commentary said, ‘The equity market of the country has been impeded under selling pressure as the investors’ appetite remained subdued amid a bearish sentiment towards the bourse. The confidence crisis is primarily driven by lower turnover.’
As a result, most of the investors preferred to liquidate their portfolios and decided to sit on cash in the absence of any major trigger on the market, it said.
Turnover on the DSE increased slightly to Tk 591.81 crore on Tuesday compared with that of Tk 467.08 crore in the previous session.
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 BSEC 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 selling shares 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.
Share prices of eGeneration Limited, which made its debut on Tuesday, shot up by the maximum limit allowed on the debut day to close at Tk 15 a share.
Average share prices of miscellaneous, pharmaceutical, non-bank financial institution and bank sectors dropped by 4 per cent, 1.6 per cent, 0.8 per cent and 0.4 per cent respectively.
Of the 339 scrips traded on the DSE on Tuesday, 156 declined, 66 advanced and 117 remained unchanged.
DS30, a composition of 30 large capitalised companies, slumped by 1.93 per cent, or 39.83 points, to close at 2,017.53 points on the day.
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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