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Dhaka stocks continued to slump in the past week, stretching the bear run to second week, as investors kept heavy sales of shares amid concerns over the liquidity crisis in financial sector, Grameenphone’s woes and foreign investors’ exodus from the market.
DSEX, the key index of the DSE, slumped 1.62 per cent, or 82.76 points, over the week to close at 5,013.02 points on Thursday, the last trading session of the week, after losing 141 points in the previous week.
Before, the two weeks’ loss, the DSEX gained 106 points in four weeks.
In line with the previous week, the market started downbeat and continued the trend for the first four sessions of the week as investors kept share sales to avoid pitfalls, market operators said.
They said that a-year-long bearishness in the market, except the month of January this year, reduced investors’ confidence level sharply and became the key factor behind the current fall.
The DSEX, however, witnessed positive day in the last trading session on Thursday as some institutional investors in particular went for bargain hunting amid regulator’s intervention.
The Bangladesh Securities and Exchange Commission held a meeting with stakeholders on Thursday, and its chairman M Khairul Hossain assured them that the market would turn around this week as finance minister AHM Mustafa Kamal would encourage banks to invest more in the capital market.
The market ended in negative zone in the past week as investors feared that some recent moves of the government might worsen the liquidity condition in the financial market, said a stockbroker.
On September 2, the cabinet approved a draft law that would allow the government to use the idle funds of state-owned corporations for development work. There are 68 state-owned autonomous organisations, which hold Tk 2,12,100 crore in combined deposits in banks.
The ongoing liquidity crisis would worsen if the government transferred the money from banks to the national exchequer, market experts said.
Besides, the media reported that the government borrowed Tk 26,248.52 crore from the banking system in between July 1 to August 20 of the current fiscal year 2019-20.
The Bangladesh Bank has recently directed the banks to maintain cash reserve ratio and statutory liquidity ratio for their exposure through offshore banking operations, said market operators.
The media reported on September 2 that the overseas investors withdrew around Tk 619 crore in last six months (March-August) from the capital market.
EBL Securities in its weekly market commentary said, ‘Government announcement to enact a law to use 68 state-owned companies idle money stressed banking sector performance in the market.’
The share prices of GP plummeted 7.6 per cent over the week due to its on-going tussle with the telecom regulator over unpaid audit claim.
Beside GP, fall in share prices of large capitalised companies United Power Generation Company, British American Company, Square Pharmaceuticals and BRAC Bank fuelled the volatility.
Average share prices of all the sectors except Jute plunged on the week.
Share prices of telecommunication, non-bank financial institution, banking and textile sectors dropped by 5.0 per cent, 2.2 per cent, 1.7 per cent and 1.5 per cent respectively.
The daily average turnover on DSE dipped to Tk 394.66 crore in last week from Tk 448.70 crore in the previous week.
Out of the 355 issues traded in the week, 233 declined, 104 advanced and 18 remained unchanged.
DS30, the blue-chip index of DSE, slumped 2.33 per cent or 41.85 points, to close at 1,758.20 points.
Shariah index DSES shed 1.38 per cent, or 16.37 points, to finish at 1,167.07 points.
Monno Ceramic Industries led the turnover chart with its shares worth Tk 108.83 crore changing hands in the week.
United Power Generation Company, Monno Jute Stafflers, Stylecraft Limited, Fortune Shoes, Silco Pharmaceuticals, JMI Syringe, Wata Chemicals, Beacon Pharmaceuticals and Doreen Power were the other turnover leaders.
Kay and Que gained the most in the week with a 22.12-per cent increase in its unit prices while Padma Islami Life Insurance was the worst loser, shedding 15.05 per cent.
(NA)
