• Sunday, Jan 26, 2020
  • Last Update : 11:19 am

Stocks out of steam again, relapse into red zone

  • Published at 09:27 pm September 24th, 2019
Mehedi Hasan/Dhaka Tribune

The movement went slow after the third hour. At the end of the day, the index closed red at 4958.72 points with 0.83% decrease from the previous day

DSEX, the key index of Dhaka Stock Exchange (DSE), failed to sustain the upward streak of the two previous days and settled below the ‘psychological threshold’ of 5,000 points yesterday.

On the day, the broad index lost 41.51 points. The index mostly showed downward movements.   It started with a spike but soon lost few points before another spike in the second hour of trade. 

The movement went slow after the third hour. At the end of the day, the index closed red at 4958.72 points with 0.83% decrease from the previous day.

Turnover, a crucial indicator of the market, also fell to Tk405 crore, which was nearly 22% lower than the previous day’s Tk517 crore. 

EBL Securities in its daily market commentary said that investors' selling pressure to book profit from large cap stocks namely Grameenphone, United Power and British American Tobacco dragged down the index to close in the red zone.

Many investors were still worrying about the recent volatility of the market, it said. 

All the large cap sectors showed negative movement yesterday.Among the large cap sectors, Bank exhibited lowest negative movements with 0.50% loss, and Fuel and Power showed highest negative movement with 1.72% loss, LankaBangla Securities said in its daily market commentary.

On Monday, DSEX was back at its 5,000 points level as the market, after months of downtrend, started to feel upbeat at the central bank announcement that it will extend liquidity support to banks for investment in stock market.

Bangladesh Bank's decision to provide liquidity support to scheduled banks for investment in capital market has given investors the badly required confidence, which was dwindling for a long time, market operators have said. 

Former chairman of Bangladesh Securities and Exchanges Commission (BSEC) Faruq Ahmed Siddiqi has told Dhaka Tribune that lapses in regulatory and enforcement matters have led investors to continue their selling spree amid lack of confidence.

“Ensuring transparency in trading is a prerequisite for a stable share market. The regulatory body should look into the matter. Abnormal price rise in shares of some companies is common without any specific reason. The rise in prices of small capital companies is a matter of great concern,” said  Siddiqi.

“Money market has a negative impact on the stock market. Lack of good company also causes continuous fall in the stock values,” he said.  

Faruq Ahmed Siddiqi also said that BB’s circular positively impacted the market but it would not last long.

Earlier on Sunday, the central bank announced in a circular that fresh liquidity support would be given to banks to raise their respective portfolios in the capital market up to the regulatory limit directly or through subsidiaries.

According to the circular, issued by the Department of Offsite Supervision (DOS), banks will get the liquidity support through special repo (repurchase agreement) facility at a rate of 6% interest for a 28-day period, which may be extended in rotation up to maximum six months.

The port city’s bourse, the Chittagong Stock Exchange, also returned to the red with its All Shares Price Index (CAPSI)- CASPI losing 138 points to close at 15,079 and the Selective Categories Index - CSCX shedding 83 points to finish at 9,158.