Wednesday, June 19, 2024

Section

বাংলা
Dhaka Tribune

Frantic stock offloading wipes off 19,000C from stock markets in four days

Instability and crisis in the money and commodity market have now spread to the stock market as well.

Update : 17 May 2022, 08:35 PM

The country's stocks suffered a major setback as investors dumped their holdings to avert further losses out of worry over the country's macroeconomic matters, including further devaluation of the Taka.

From the market capitalization, which refers to the total market value of companies' outstanding shares, some Tk19,000 crore was gone in just four days to Tk521,700 crore on Monday as investors sold off large-cap stocks.

Five large-cap stocks such as Walton, British American Tobacco, Robi, Beximco and LafargeHolcim contributed 40 points to the fall of DSEX, according to amarstock.com, a market-data analyst.

Meanwhile, shares of two financial institutions of PK Halder, who was arrested in India on the day of a 91% fall in the stock market, have seen the highest price rise.

About 9.5 lakh shares of International Leasing and 41 lakh shares of FAS Finance were exchanged on the day.

Shares of International Leasing rose Tk0.50, or 10%, to Tk6 on Monday. The share price of FAS Finance also rose by Tk0.50 or a maximum of 10% to Tk5.60. 

According to market rules, a company's share price cannot rise more than 10% in one day. As such, both the companies had the highest price increase on Monday.

Shakil Rizvi, director of the Dhaka Stock Exchange (DSE) said: “Market witnessed a steep fall on Monday from the beginning of the day's trading session as the investors, particularly the retail ones, went for panic sales.”

The former DSE president thinks that institutional investment in the market has declined due to the overall situation and banks are now buying dollars from the central bank every day in cash to cope with the dollar pressure. On the other hand, foreign investors are also withdrawing from the market due to the devaluation of the currency against the dollar. 

Worried investors continued offloading their holdings following the price corrections witnessed by heavyweight issues, including mutational ones.

Upon asking about the overall market situation, AB Mirza Azizul Islam, economist and former financial adviser to the caretaker government told Dhaka Tribune: “The declining investment capacity of the general investor, foreign investors shares selling due to instability with the dollar are not the only reason for the big fall in the market. 

“Meanwhile, institutional investors did not come in with the way the market was raised in the hope of investing by institutional investors. As a result, general investors' expectations and receipts did not match. All in all, what was supposed to happen in the bourse has happened.”

The main index of the major stock market Dhaka Stock Exchange (DSE) DSEX today fell 27.42 point or 0.42% to 6,403.50 points. Among other DSE indices, the Shariah index was down 1.52 points or 0.10% and the DSE-30 index was down 2.25 points or 0.09% at 1,408.76 points and 2,363.66 points respectively.

Today, the amount of money traded on the DSE is Tk779.76 crore, which is 244.39 crore less than the previous working day. The previous working day transaction was Tk1024.15 crore.

Shares and units of 379 companies were traded on the DSE. Of these, 89 or 23.48% share and unit prices have risen. 

Shares and unit prices of 245 or 64.64% and 45 or 11.87% companies remained unchanged.

On Tuesday (May 17), the main index of DSE, the main stock market of the country, decreased by 27.5 points. 

The three mega-companies were trying their best to bring down the index in such a fall. 

Due to these three companies, the DSE index fell by 24.24 points today which is 52% of the total fall of the market. 

Among these three mega-companies are British American Tobacco, Grameenphone and IPDC Finance Limited.

According to sources, British American Tobacco Bangladesh Limited pulled down the most index on Tuesday. The company was responsible for lowering the DSE index by 6.69 points and the company's share price fell 1.34%. Shares of the company were last traded at Tk553.60.

Grameenphone Limited was the second company to drop in the DSE index. The company's share price fell by 0.87%. As a result, the DSE index fell 6.02 points. 

The latest share of the company was traded at Tk306.90.

IPDC Finance Ltd was the third in a bid to lower the DSE index. Today, the company's share price fell 4.86%. The DSE index fell 1.53 points and shares of the company were last traded at Tk48.90.

The overall index CASPI of Chittagong Stock Exchange (CSE), the second-largest stock market in the country, fell by 121.38 points or 0.64% to 18,745.17 points.

Of the 293 companies that changed hands at CSE on Tuesday, the share price of 66 companies rose, 195 fell and 32 remained unchanged. Shares and units worth Tk27.93 crore were traded on the CSE.

Earlier on Monday, the benchmark plunged below the 6,500-point mark instantly at the opening.

At the end of the day, DSEX, the core index of Dhaka Stock Exchange (DSE), shed 134.53 points or 2.05% to settle at 6,431-the lowest count in 10 months since July 29, last year.

The benchmark shed over 267 points in four straight sessions including that of Monday-evidently amid a sagging mood over the latest economic situations at home, neighbourhoods and across developed economies as well owing to fallouts from the pandemic and the war in major global supply zones.

Monday's index tumble was also the steepest single-day one in more than two months since March 7 this year when the DSEX plunged 182 points amid the escalation of the Russia-Ukraine war that blocked supplies of energy and basic products across the globe.

Turnover, a crucial indicator of the market, however, rose to Tk1,018 crore, 24% higher than the previous day's tally of Tk823 crore, led by sell pressure.

All the sectors faced selling pressures, leading to the share-price erosions of more than 91% of stocks. Out of 381 issues traded, 348 declined, 26 advanced and seven unchanged.

Shinepukur Ceramics was the most-traded stock with shares worth Tk60.2 crore changing hands, followed by Beximco, JMI Hospital Requisite Manufacturing, RD Food and Fu-Wang Ceramic.

Chittagong Stock Exchange (CSE) also followed suit, with the CSE All Share Price Index (CASPI) shedding 382 points to settle at 18,866 and its Selective Categories Index (CSCX) losing 229 points to close at 11,321.

Of the issues traded, 266 declined, 33 advanced and seven issues remained unchanged on the CSE trading floor. The port city bourse traded 16.08 million shares and mutual fund units with a turnover value of Tk43.2 crore.

ICB seeks more time to repay loans

Meanwhile, sources said the ICB on Monday sent letters to different banks with a plea for revising the timeframe of repaying term loans as part of a rescue measure.

Bangladesh Securities and Exchange Commission (BSEC), the regulator of the capital market, is also concerned about the fall in prices. 

The banks and institutions concerned have been informally requested to extend the term of the expired deposits of the banks and some government institutions in the ICB without returning them now. 

When asked, BSEC executive director and spokesperson Mohammad Rezaul Karim said: “We are trying to ensure that ICB does not have to pay a maturity deposit by selling shares now. We have requested the institutions to extend the term of the deposit. We have also informed the Ministry of Finance about the matter.”

A market insider said that local currency depreciation, imbalance in current-account balance, price hike of essentials and anticipation of restrictive economic policies prompted investors to selloff to leapfrog further losses.

He noted that some western countries, including the United States, have warned that their economies may fall into recession, which is a cause for concern among local investors as these countries are major export destinations for Bangladesh.

A rise in imports, deficit in current-account balance, shortage of dollars and rise in business costs have become major concerns for investors, according to a leading stockbroker.

Feared bank-interest hike, the global commodity price instability coupled with Sri Lanka's economic and political crisis hit stock investors' sentiment, said a stockbroker.


Top Brokers

About

Popular Links

x