Dhaka stocks witnessed another big fall on Sunday as risk-averse investors continued trimming their equity exposure amid waning confidence and economic worries in the country.
DSEX, the key index of the Dhaka Stock Exchange (DSE), plunged by 149.2 points and settled at 4,965 points, compared to 5,115 points in the previous trading session. The Dhaka bourse has plunged to a level not seen in over four years, with the index dipping below the 5,000 mark.
On Sunday, the BSEC formed a 4-member probe committee to investigate the recent continuous downtrend in the country’s capital markets. The committee will place its findings within 10 working days.
Meanwhile, trading activities remained stagnant, with market turnover decreasing by 0.7 per cent to Tk 304 crore as against Tk 306 crore in the previous session.
Royal Capital said in its daily market commentary that the index closed below 5,000 points as it swept all technical support, reflecting overwhelming bearish sentiment among investors.
EBL Securities said in its daily market commentary that while investors' suffering knows no bounds, they are left with few options amid intense bearish sentiment and prevailing uncertainty, raising concerns about the potential for a market bottom.
The outlook remains grim, compounded by the expectations of disappointing earnings for the July-September quarter, narrowing the possibility of a short-term rebound in the declining capital market.
The relentless bearish spell remained dominant throughout the session, with the majority of scrips exerting significant price corrections due to the enduring pessimism pervading the trading floor, leaving investors in a state of persistent uncertainty.
The blue-chip index DS30 and the Shariah-based index DSES closed at 1,830.99, and 1,107.73 points, respectively. All the large-cap sectors posted negative performance on the day.
All sectors out of 19 were on the losing side. Of the 398 scrips traded, 29 advanced, 341 declined and 26 remained unchanged.
LOVELLO topped the turnover chart. ESQUIRENIT was the top gainer, whereas IFADAUTOS was the top loser. One stock was traded at the floor price.
In the block market, shares of Tk 11.7 crore were transacted, representing a turnover of 3.85 per cent The SME index, DSMEX, decreased by 43.05 pts, and the market generated a Tk 2.6 crore turnover, a 5 per cent increase from the previous session.
According to the Royal Capital Financial Portal, BRACBANK and SQUARPHARMA contributed the most to the gains and losses of the DSEX index on the day, and the bear takes control of the market from the beginning.
Prime Bank Securities' Managing Director Md Moniruzzaman said 10 to 12 per interest is obtained by keeping deposits in the bank. Large individual investors are keeping money in banks as a safe investment.
Even banks that have idle money are investing in Treasury bills and bonds. There is no flow of money towards the stock market; on the contrary, big investors are withdrawing.
Market insiders said that the depressed capital market turned back to suffer the outrage of dominant selling pressure after just two sessions of brief positive vibe as risk-averse investors continued trimming their equity exposure amid waning confidence, while the central bank's latest policy rate hike put further strain on the ailing market.
The relentless bearish spell remained dominant throughout the session, with the majority of scrips exerting significant price corrections due to the enduring pessimism pervading the trading floor, leaving investors in a state of persistent uncertainty, they said.
The port city bourse, the Chittagong Stock Exchange (CSE), and the CASPI index recorded a marginal drop of 2.06 points, settling at 14,006.59. At the CSE, 204 companies and mutual funds were traded, with 173 companies posting losses, 23 gaining, and 8 remaining steady.
Total turnover at the CSE amounted to Tk 4.25 crore, up slightly from Tk 4.15 crore on the previous day.
Babu Kamruzzaman, an economic analyst and journalist, told the Business Post, “If the market index keeps falling like this, it will further erode investors' confidence.
“Many of us expected a positive shift in the market in light of recent changes, and people had high hopes. But now, it feels as though the market is lacking proper oversight.”
He continued, “In my view, the Investment Corporation of Bangladesh (ICB) should quickly use the funds expected from Bangladesh Bank to support the market. Also, institutional investors should step in, particularly for stocks currently priced far below their actual value.”
