Home ›› 21 Mar 2022 ›› Stock
Bears regained control of the stock markets as looming uncertainty on the economic front drove the index back into the negative territory.
Despite some market-boosting triggers taken by the regulator two weeks back, investor sentiment faltered. Resultantly, the benchmark DSE index on Sunday dropped 67 points or almost 1 per cent to close at 6,698.
The market could have been declined further once there was no bar on the lower limit circuit at 2 per cent set by the Bangladesh Securities and Exchange Commission on March 8 to prevent the market crash caused by the Russia-Ukraine conflict.
“Since the BSEC measures, the market recovered some points but today’s fall accelerated due to the economic worries,” said a stock dealer.
Temporary regulatory measures boosted the market sentiment in the last several sessions as investors looked past Russia’s attack on Ukraine.
“The economic worries overshadowed the temporary measures,” said an analyst at a top brokerage firm.
Two other junior indices—the Shariah-based DSES moved down 13 points or 0.89 per cent to 1,441. The blue-chip comprising the DS30 index lost 23 points or 0.95 per cent to 2,434.
“Equity indices saw a downfall despite interventions by the regulator and the earlier short-lived upward momentum failed to recover investors’ sentiment as the Russia-Ukraine conflict escalates inflationary pressure on the macroeconomy further,” said the EBL Securities in a note.
Trading activities remained sluggish and participation on the bourse logged the lowest this year as most investors remained on the sidelines owing to the temporary circuit breaker, which caused many stocks to remain dearer at the current price level for investors, it said.
As a result, bourses observed a decrease in participation as the turnover declined more than 26 per cent to stand at Tk 616 crore over the previous session. The turnover is lowest since April 18, 2021 when it was Tk 602 crore.
All sectors witnessed sell-off led by the financial institution, cement, ceramic, insurance and textile stocks.
Out of the 384 issues traded, 23 advanced, 339 declined, and 22 remained unchanged.
The port city bourse, CSE, also settled in red terrain. The selected indices (CSCX) and All Share Price Index (CASPI) have declined
To prevent the market crash, the BSEC asked the bourses to calculate the lower limit circuit breaker at 2 per cent and directed ICB to pump funds into the market from the stabilisation fund.
As part of the regulator’s series of measures, it also proposed three mechanisms for enhancing liquidity in the secondary stock market. The three mechanisms include the enhancement investment by banks with low exposure limit to stocks, faster formation of a Tk 200 crore special fund by the banks which are yet to do so as per earlier decision and speediest approval of perpetual bond and subordinate bond proposed by the banks to meet the regulatory requirement, according to a meeting between the BSEC and listed banks.
