Dhaka stocks’ slide was halted on Wednesday, after hitting 56 months low, as a section of institutional investors became active and investors gave pause to panic selling after some movements from Bangladesh Bank and finance ministry to stabilise the market.
The DSEX, key index of the Dhaka Stock Exchange, gained by 0.79 per cent, or 31.96 points, to close at 4,068.20 points on Wednesday after losing 176.2 points in the previous two sessions.
Market operators said some institutional investors, especially state-run Investment Corporation of Bangladesh, became active from the beginning of the day’s trading on Wednesday to support the market.
The institutional investors move came as per directives of the market regulator following the assurance of Bangladesh Bank governor made on Tuesday afternoon that the central bank would extend whatever support it needed to stabilise the stock market.
Finance ministry senior secretary Ashadul Islam at a meeting with Bangladesh Merchant Bankers Association on Tuesday said that the ministry asked four state-run banks to invest in the capital market to increase fund flow.
The trading on Tuesday started with bullish trend, gaining 84 points within half an hour of the day, said market operators.
They said that many of the general investors, who were in heavy losses, gave a pause to the panic selling on the day seeing the sharp rise of the index.
Some of the investors, however, went for selling as they continued to be in panic forcing the index to lose some grounds in late hour.
Market operators said that although the index ultimately closed in positive territory, most investors still remained worried about the prospect of the market.
The latest government move to table a bill in parliament to enact a law allowing the government to use the ‘surplus funds’ of the state-owned enterprises for development, made the investors nervous.
The law will allow the government to take up to Tk 30,000 crore from the SoEs, but the move would hit the banks as most of the SoEs deposited their surplus funds with the banks.
Meanwhile, representatives of Bangladesh Merchant Bankers Association and DSE Brokers Association held a meeting with Bangladesh Securities and Exchange Commission’s senior officials to discuss about the current situation in the market.
The BMBA and DBA officials said that the foreign sales were not that much significant that was spread in the market.
The shares of many companies were oversold and the market intermediaries have enough opportunity to buy shares enough to get optimum profits.
In the latest rout of the market, the DSEX fell by 1,885 points and the DSE market capitalisation slumped by more than Tk 1.04 lakh crore in last 11 months.
Frustration, fear and anger occupied the market sentiment after they had seen no visual move from the government and the regulator to arrest the plunge and instil confidence in the market.
Investors’ confidence collapsed amid a prolonged bearish vibe in the market, the government’s apathy towards the capital market, depressing macroeconomic data, pressure on the financial sector and Grameenphone’s tussle with the regulator.
The turnover on the DSE plunged to Tk 242.82 crore on Wednesday from Tk 262.81 crore in the previous trading session.
DSE blue-chip index DS30 added 0.7 per cent, or 9.59 points, to close at 1,371.23 points.
Out of the 351 scrips traded on Wednesday, 210 advanced, 94 declined and 49 remained unchanged.
Average share prices of non-bank financial institutions, bank and textile sectors advanced by 1.8 per cent, 1.1 per cent and 1.0 per cent respectively.
On the other hand, share prices of telecommunication and energy sectors dropped by 1.2 per cent and 0.5 per cent respectively.
Shariah index DSES gained 0.79 per cent, or 7.22 points, to end at 914.25 points.
BRAC Bank led the turnover chart with its shares worth Tk 16.36 crore changing hands on the day.
Trading of the bond of Ashuganj Power Station Company Limited, a non-convertible and fully redeemable coupon bearing bond will commence at DSE from January 16, 2020.
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