DSEX, the key index of Dhaka Stock Exchange (DSE), observed a mild setback on Monday, snapping its 10-day gaining streak as sellers took control, and cautious investors preferred profit booking.
The key index lost 22.14 points and closed at 6,424.93. The blue-chip index DS30 and the Shariah-based index DSES closed at 2,165.93 and 1,393.94 points, respectively.
Meanwhile, market turnover decreased slightly, falling by 8.6 per cent to Tk 1,693 crore against Tk 1,852 crore recorded in the previous session.
Sellers took control since cautious investors preferred profit booking after the major upsurge in stock prices owing to heightened optimism, and increased market participation across the market.
The market witnessed mild volatility as investors opted to realise their recent gains, and preferred to observe the sustainability of current upbeat vibe in the market, EBL Securities said in its daily market review.
Out of the 394 issues traded, 113 advanced, 252 declined, and 29 remained unchanged at the Dhaka bourse.
Most of the large-cap sectors posted negative performance on Monday. NBFIs experienced the highest loss of 1.74 per cent. Block trades contributed 2.8 per cent of the overall market turnover. Orion Pharma Ltd was the most traded share with a turnover of Tk 61.7 crore.
The port city bourse, the Chittagong Stock Exchange (CSE), also settled on the red terrain. The selected indices (CSCX) and All Share Price Index (CASPI) fell by 26.2 and 43.7 points respectively.
On Sunday, the first trading session of this week, the stock soared by 73.7 points, or 1.16 per cent and climbed to a 16-month high of 6,447 points as optimistic investors perceived lucrative investment opportunities in the market.
Meanwhile, the market turnover remained above the Tk 1,800 crore-mark, slightly decreasing by 0.3 per cent to Tk 1,852.5 crore, against Tk 1,857 crore recorded in the previous session.
Dhaka bourse’s daily turnover crossed Tk 1,800 crore for the first time after the removal of the floor price on most of the listed companies.
On February 6, the Bangladesh Securities and Exchange Commission (BSEC) withdrew the floor price for another six companies’ shares.
The stock market regulator’s order came into effect on Wednesday for Orion Pharmaceuticals, Anwar Galvanizing, and Renata Ltd, and will remain in effect until further notice.
Meanwhile, the remaining three companies – British American Tobacco Bangladesh, Grameenphone and Robi – will have the floor price until their forthcoming record date.
Only six companies now share the floor price. These are Beximco Ltd, BSRM Ltd, Islami Bank, Khulna Power, Meghna Petroleum, and Shahjibazar Power.
On January 18, after the session's closing bell, the Bangladesh Securities and Exchange Commission (BSEC) issued an order rescinding the floor price for all listed companies and mutual funds, except for 35 companies' shares, complying with a long-standing demand from stakeholders.
On January 21, DSEX fell 96.50 points, or 1.52 per cent, in the first trading session after the floor price withdrawal. After five minutes of trading, the key index had plunged about 214 points but later recovered most of the initial losses.
The next day, DSEX gained 14.05 points and closed at 6,254.31. The stock market regulator also withdrew the floor price for 23 more companies that day.
At that time, only 12 companies shared the floor price. These are Anwar Galvanizing, British American Tobacco, Beximco Ltd, BSRM Ltd, Grameenphone, Islami Bank, Khulna Power, Meghna Petroleum, Orion Pharma, Renata, Robi Axiata, and Shahjibazar Power.
Market insiders said the key index was very much expected to fall as a large number of stocks failed to see price discovery for a long time due to the floor price.
They added that many investors did not get the opportunity to trade due to the prolonged price level. As a result, there was pressure to sell shares at the beginning of the day, but it gradually decreased.
Welcoming the floor withdrawal move, a leading stock broker said the market might see some corrections in the first few days. It is nothing to be afraid of, and the market will recover very soon.
On July 28, 2022, the BSEC imposed floor prices on all securities to prevent shares from falling beyond a certain level amid domestic and global macroeconomic strains.
The share prices of most companies have been stuck at their floor prices for an extended period, pushing investors towards liquidating their holdings and creating a liquidity crisis in the market.