Turnover decreased 19.3%
The country's prime bourse index dipped 1.61% or 75.33 points on Sunday, bringing the key index to nearly 37-month low to 4,596 points as disappointing macroeconomic indicators have weighed on investors' confidence badly.
The index hit its lowest after October 30, 2016 when it was at 4,596 points. The turnover witnessed a significant decrease of 19.3% to stand at Tk 349 crore.
The prime index lost 1,354 points or 22.8% from its highest value of this year of 5,950 points on January 24, 2019.
Market analysts and insiders said the falling exports, soaring non-performing loans and decreasing private sector credit growth dampened investors’ confidence badly.
According to the DSE data, on Sunday top gainers’ list was mostly dominated by small cap and ‘Z category’ stocks.
The market capitalisation of the Dhaka bourse also slumped to Tk3,48,234 crore on Sunday, from Tk3,52,374 crore in the previous session.
A stock broker said the drop in the stock market was due to confidence crisis. Destressed macroeconomic indicators and troubled financial sector suffering from liquidity pressure acted as negative factors in the capital market, he added.
Two other indices also ended lower. The DS30 index, comprising blue chips, lost 22.76 points to finish at 1,583 and the DSE Shariah Index plunged 14.54 points to close at 1,041.
Losers took a strong lead over the gainers as out of 353 issues traded, 273 closed lower, 53 ended higher and 27 remained unchanged on the DSE trading floor.
UCB Capital Management Ltd in its daily market commentary said all major sectors experienced correction on Sunday. Among the large cap stocks, Square Pharmaceuticals, Grameephone and BATBC were hit the most.
General insurance, banks and pharmaceuticals sector contributed 34.4% of the total turnover. Sinobangla Industries Ltd was the top traded scrip. The stock was up 10%.
Dhaka Stock Exchange Brokers' Association (DBA) President Shakil Rizvi said that the country’s macroeconomic indicators without remittance were bad. It impacted on the stock market. The banks’ liquidity crisis was not yet addressed, he added.
Former President of Bangladesh Merchant Bankers Association (BMBA) Mohammad A Hafiz told Dhaka Tribune: “The investors are going through a volatile situation amid financial scams, soaring non-performing loans, and poor banking management that dampened their moods. Liquidity crisis in the country’s banks also made local and foreign investors wary of investing in the country’s capital market.”
The port city bourse Chittagong Stock Exchange (CSE) went down by 223.6 points in its broad based index –CASPI and the Selective Categories Index-CSCX-shedding 137 points to finish at 8,485.
The port city bourse traded 62 crore shares and mutual fund units worth Tk14 crore in turnover.
EBL Securities in its daily market commentary said investors selling pressure was mostly concentrated on bank, fuel and power and pharma and chemicals sectors in yesterday’s session.
Banks were also mostly reluctant to invest in stock market even after being offered several incentives, which indicated further pessimism from the institutions, its also said.
According to the latest Bangladesh Bank data, the non-performing loans (NPLs) of banks rose by a staggering Tk3,863.14 crore in three months till September this year.
As of September, the total bad loans accounted for 11.99% of the total disbursed loans. At the end of June this year, the total non-performing loans in the banking system were at Tk1,12,425.17crore, or 11.69% of the total disbursed loans.
The country’s export earnings have declined by 10.70% to $3.05 billion for the fourth consecutive month in November compared with the corresponding period of last year.
The fall is largely driven by a negative growth in the apparel business, which contributes to over 84% of total export earnings.
According to Export Promotion Bureau data, Bangladesh earned $3.05 billion in November, down by 10.70%, which was $3.42 billion in the same month last year. In October, the exports earning saw a 17.19% decline to $3.07 billion.