The key index of the Dhaka Stock Exchange (DSE) continued to bleed for the third consecutive session on Sunday, owing to the continuation of predominant sell pressure on the major scrips as investors were unnerved and opted to safeguard their funds from the prevailing volatility in the market.
DSEX lost 77.34 points or 1.26 per cent and closed at 6,079.06, which is a 1.5-year-low, due to the investors’ continuous sell dominance.
Meanwhile, market turnover slightly edged up by 1.1 per cent to Tk 880 crore, from the previous session’s Tk 870 crore.
Of the 393 issues traded, 57 advanced, 309 declined and 27 remained unchanged at the Dhaka bourse.
The market remained downbeat throughout the session, with the majority of scrips extending correction mode due to investors’ sell-domination that spurred worries regarding the market outlook. Moreover, cautious investors decided to remain watchful, being wary of the market momentum surrounding the upcoming corporate earnings declarations for the recently ended quarter, EBL Securities said in its daily market review.
The blue-chip index, DS30, and the Shariah-based index, DSES, closed at 2,091.05 and 1,337.14 points, respectively, on Sunday, while most of the large-cap sectors posted negative performances.
Engineering experienced the highest loss (4.94 per cent) while Block trades contributed 3.7 per cent of the overall market turnover. Orion Infusion Ltd was the most traded share with a turnover of Tk 32 crore on Sunday.
The Chittagong Stock Exchange (CSE) also settled on red terrain on Sunday. The selected indices (CSCX) and All Share Price Index (CASPI) plummeted by 155.3 and 265.9 points, respectively.
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 22, the stock market regulator withdrew the floor price for 23 more companies.
On January 21, DSEX fell 96.50 points, or 1.52 per cent, on the first trading session after the floor price withdrawal. After five minutes of trading, the key index 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.
Now only 12 companies share 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 also said 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’s nothing to be afraid of and the market will recover very soon.
On July 28, 2022, BSEC had 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.
Back in March 2020, the securities regulator took a similar move to limit the free-fall of shares following the global pandemic, when the DSEX fell below 3,000 points.
