Benchmark index plunges below 5,000 points
The mysterious rise and fall in the stock market is coming as a big gimmick. Small investors fail to understand what pushed the prices up and what let it down by so big margin at a time when the bourse is losing investment in a free fall of share prices.
On Monday last Dhaka Stock Exchange lost over 67 points causing big remorse among small investors. On Tuesday again it rose by 111 points on big protest as people were left to ponder what is causing this ups and down in such huge proportions.
Meanwhile the market was at 31 months low on Monday and report said DSE lost over Tk 27,000 crore capital over 15 days in reckless fall of prices. Many wonder what the regulator—Bangladesh Securities and Exchange Commission (BSEC) – is doing from the top as the ground below is melting.
It appears when the small investors demonstrate in front of the bourse the negative situation quickly turn positive. But no sooner the negative march hit again in the bourse prompting agitation among small investors. This rise and fall in the market remains a big mystery as the market plunge in the market continues.
DSE scenario over the last three weeks showed what started out as a dip in confidence has now turned into a full scale panic as the market capitalization is sinking to the bottom.
A managing director of a merchant bank requesting anonymity has said they had to go for forced sell in the last two days.“We had no other option but to sell the shares as the prices of the good stocks are plummeting.”
And in the last few days, “A” category companies were the top losers, he added. For instance, the top negative contributors to the index were the heavyweights British American Tobacco Bangladesh and Grameenphone, and Square Pharmaceuticals.
“This high level of trading activity amid deteriorating index proves that panic-driven investors are dumping their holdings to avoid further losses,” said UCB capital, one of the leading brokerage houses, said in its market analysis.
Turnover of the premier bourse spiralled 25.91 percent to Tk 464.18 crore yesterday.
The impending liquidation of People’s Leasing and Financial Services, Grameenphone’s regulatory issues and fund shortage in banks continued to take a toll on investor confidence, it added.
A top official of a leading merchant bank said the investors are fearing the index would sink further, so they are washing off their portfolio.
They are keeping the cash in hand from selling their stocks so that they can buy shares at the lower level.
“Such a tendency caused the market to fall,” he added.
Meanwhile, retail investors demonstrated in front of the DSE building yesterday to protest the continuous slide of the DSEX. Of the traded issues, 60 advanced, 277 declined and 16 remained unchanged.
Fortune Shoes dominated the turnover chart with its transaction of 54.37 lakh shares worth Tk 20.094 crore, followed by Square Pharmaceuticals, United Power Generation and Federal Insurance.
First Finance was the day’s best performer with its 10 percent gain, while Emerald Oil was the worst loser, shedding 10 percent. Chittagong stocks also fell with the bourse’s benchmark index, CSCX, declining 115.72 points, or 1.23 percent, to finish the day at 9,257.53.
Losers beat gainers as 216 declined and 48 advanced, while 22 finished unchanged on the Chittagong Stock Exchange. The port city bourse traded 88.25 lakh shares and mutual fund units worth Tk 21.17 crore.