Stocks lose 1,720pts, Tk 90,000cr market cap in 11 months

Latest plunge stretches to fourth day as panic sales continue

Staff Correspondent | Published: 00:00, Jan 09,2020

 
 

Few investors hold a protest programme against relentless plunges in the share prices in front of the Dhaka Stock Exchange office building at Motijheel in Dhaka on Wednesday. — New Age photo

Dhaka stocks plummeted for the fourth day on Wednesday with the key index of Dhaka Stock Exchange losing 1,720 points in last 11 months and the market capitalisation Tk 90,000 crore as panicked investors continued selling shares indiscriminately due to an absence of any sign of market recovery.

The DSE key index, DSEX, lost 1.23 per cent, or 53.06 points, Wednesday to close at 4,228.36 points, hitting almost a 45-month low. The DSEX declined by 230.91 points in last four sessions. Wednesday’s index hit the lowest after May 2, 2016 when it was at 4,171.40 points.

After a slight gain at the beginning on Wednesday, the market started falling and continued the vibe until the end of the session as panic gripped investors, market operators said.

They said that investors were indiscriminately selling shares as they suffered heavy losses.

After witnessing a worse year in 2019, investors had expected that the market might turn around from the beginning of this year but the new year had a worse beginning with the DSEX losing 230.91 points in last four sessions.

It has been frustrating experience for investors as well as market intermediaries as they never had observed such lengthy downward trend on the market before, market operators said.

They said the plunges intensified after prime minister Sheikh Hasina on Monday said that banks must implement the single-digit lending rate from April, which made investors more worried about the already troubled banking sector.

The bank scrips have been falling since the finance minister AHM Mustafa Kamal’s announcement made in the last week of December that banks must bring down the lending rate to 9 per cent as investors feared that the mandatory implementation of the rate would weigh on the banks’ profits and dividend giving ability.

Experts said the banks failed to perform properly due to poor governance, soaring non-performing loans and political influences.

Few investors protested against the relentless plunges in the share prices in front of the DSE office building at Motijheel in Dhaka on Wednesday. They demanded immediate actions against market manipulators.

Stock market analyst and United International University professor Mohammad Musa told New Age that investors became nervy due to prolonged and relentless plunges in the share prices.

He said that the situation would get worse if the government would not take direct action to reverse the market trend.

Musa said that the government must fix the messy banking sector, ensure governance and fund flow to the market to rebuild the country’s capital market.

The EBL Securities in its daily market commentary said, ‘Dhaka stocks suffered through last four sessions for a set of reasons such as volatility in the money market, an audit demand issue between the telecom regulator and the large-cap stock, GP, and exit of foreign investors.’

Market operators said investors became more frustrated as they found  that the government and the stock market regulator, Bangladesh Securities and Exchange Commission, remained silent about the market plunges and could not do anything to at least halt the relentless plunges.

A recent meeting between the BSEC and the DSE and finance minister AHM Mustafa Kamal also failed to bring any solution to the market woes.

Widespread anomalies, falsification of financial statements, approval of initial public offerings of weak companies with huge placement shares, unpredictable regulations and no product diversification all gradually weakened the market.

The media also reported that the foreign investors continued pulling funds out of the market for the second year in 2019 that made investors more nervous on the trading floor.

DSE blue-chip index DS30, a composition of 30 best companies, lost 1.03 per cent, or 14.88 points, on Wednesday to close at 1,421.38 points, a fresh record low.

The share prices of Grameenphone, Square Pharmaceuticals and British American Tobacco plunged heavily on Wednesday.

The average share prices of almost all the sectors dropped on the day.

The share prices of telecommunication sector dropped by 4.4 per cent, non-bank financial institution 2.2 per cent, textile 1.7 per cent and bank 0.4 per cent.

Turnover on the DSE dropped to Tk 279.96 crore on Wednesday from Tk 327.46 crore in the previous trading session.

Out of the 351 scrips traded on Wednesday, 249 declined, 51 advanced and 51 remained unchanged.

Shariah index DSES shed 1.96 per cent, or 19.09 points, to end at 953.88 points.

LafargeHolcim led the turnover chart with its shares worth Tk 13.99 crore changing hands on the day.

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