Sunday, May 05, 2024
After a two-and-a-half-month stretch of inconsistent market decline, investors experienced a wave of panic. As they now spend more time fearing further declines, they do not have the chance to be happy with the index's upward blips.
Bangladesh's stock market plunged, with the DSEX index breaching a 3-year low of 5,500 points on Thursday. This 15.01 per cent single-day drop came just a day after the Bangladesh Securities and Exchange Commission (BSEC) implemented a new three per cent circuit breaker for falling share prices.
The market traded for 46 days from February 12 to April 25. Of these 46 days, the indices decreased for 34 days and increased for the remaining 12 days.
In the 34 days of decline, the DSEX fell by 1335.94 points and in the 12 days of rise, the indices rose by a meagre 407.35 points.
The continuous trend of decline has had adverse effects on the market, such as the decrease of market capitalisation by Tk 3.14 thousand crore in a single day.
Former president of Bangladesh Merchant Bankers Association (BMBA) Sayadur Rahman said, "Mainly due to the fall in two and a half months, panic has spread among investors. They are not making new investments to protect their investments, but are also selling their holdings to reduce losses."
As a way out of this, he said, "The capital market is not always like this. So be patient. Especially during this period, the listed companies publish their financial report for the December closing. Big investors look at those factors and make investment decisions.
"There is nothing to fear. And the regulator set the minimum circuit breaker for the stock on Wednesday. I hope this decline in the capital market will end soon."
Sayadur also cleared some confusion and explained that it is a misconception that institutional investors are not investing. All institutional investors are investing more or less.
On Thursday, the DSEX went down by 60.49 points, or 1.08 per cent, to 5,518.48. Two other indices also ended lower: the DSE30, comprising blue chips, plunging 10.17 points to finish at 1,974.51, and the Shariah Index, the DSES, losing 12.30 points to close at 1,217.27.
Turnover, a crucial indicator of the market, decreased by 15.1 per cent to Tk 511.43 crore, which was Tk 602.74 crore during the previous trading session of the week.
Of the 396 issues traded, 300 declined, 69 advanced, and 27 remained unchanged on the DSE trading floor.
EBL Securities, a brokerage house, said in its daily market review, "The depressed capital market observed further backlash as investors reacted adversely to the regulator's effort to clutch down the prolonged free-fall with a revised lower circuit breaker limit to three per cent, while the dominant sell-offs in the majority of scrips led the intra-day benchmark index to plunge below the 5,500 mark after 3 years."
"Sellers remained predominant right from the start of Thursday's session as they were wary of the market's outlook, which led the majority of scrips to get stuck at the revised lower circuit without having sufficient buyers. However, some opportunistic investors opted to take positions in particular beaten-down low-cap scrips by the end of the session with a positive expectation of a potential short-term gain," EBL added.
Orioninfu topped the turnover chart, followed by Lovello, ITC, Kohinoor and Asiaticlab.
ADNTEL was the day's top gainer, posting an 8.66 per cent gain, while BATASHOE was the day's worst sufferer, losing 3.77 per cent.
On the sectoral front, Pharma, with 25.0 per cent, had the highest turnover, followed by Food, with 14.8 per cent, and IT, with 9.3 per cent.
Almost all the sectors displayed dismal returns, out of which Tannery with 2.5 per cent, Food with 2.1 per cent and Financial Institution with 2.0 per cent, exerted the most corrections on Thursday's bourse, while Jute with 5.6 per cent, IT with 2.1 per cent and Paper with 1.4 per cent, exhibited some positive returns.
Block trades contributed 3.2 per cent of the overall market turnover. Orion Infusion Ltd, with 2.5 per cent, was the most traded share with a turnover of Tk 31.7 crore, said BRAC EPL, another brokerage house.
Meanwhile, the Chittagong Stock Exchange (CSE) also ended lower, with the CSE All-Share Price Index, CASPI, losing 164.44 points to settle at 15,815.75 and the Selective Categories Index, the CSCX, shedding 100.27 points to close at 9,521.92.
Of the issues traded on the Port City Bourse, 161 declined, 33 advanced, and 25 remained unchanged. The bourse traded some 34.83 lakh shares and mutual fund units, with a turnover value of about Tk 11.11 crore.
