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Blue chip index of Dhaka bourse dip 6-year low

  • Published at 10:00 pm December 23rd, 2019
web-DSE-File photo of Dhaka Stock Exchange Limited
File photo of Dhaka Stock Exchange Limited Mehedi Hasan/Dhaka Tribune

Market analysts and insiders say the investors are lacking confidence for long as the major macroeconomic indicators keep slumping

DS30, the blue chip index of the country's prime bourse, comprising best performing 30 companies, have been on the decline amid selling pressure.  

On Monday, the index closed at 1494.54 points, losing 0.46% of market value as investors were largely engaged in intense selling spree to avoid further losses.

It was the lowest level of the DS30 in six years since January 1, 2014, when it had 1478 points.

The companies on the index are considered to have good shares in terms of profitability, market capitalization and share size but their shares have been witnessing fall since February this year.

Among the traded issues on the index, five gained, 24 declined and one remained unchanged in Monday's session in Dhaka Stock Exchange.

The index were designed by Standard and Poor’s (S&P), one of the world's leading credit-rating agencies, based on the free-float methodology used by the world's major indices. The index was lunched at Dhaka bourse on January 27, 2013.

Talking to Dhaka Tribune, market insiders and analysts said that heavy sell pressure throughout the last couple of months dragged down the market as investors were suffering from lack of confidence and kept on uploading their holdings including trusted stock of large-cap companies. 

Besides, continued sales of shares by foreign investors due to dearer dollar value against taka and gloomy macro outlook added further woes to the market. Investors maintained a sideline approach and participation remained shallow as blue chip index of DSE continuously falling.

Market analysts and insiders say the investors are lacking confidence for long as the major macroeconomic indicators keep slumping.

Concerns over negative export growth, soaring non-performing loans (NPLs) and decreasing private sector credit exacerbated the ongoing confidence crisis among retail, institutional and foreign investors.

The DS30 companies The ACME Laboratories, Islami Bank Bangladesh, Meghna Petroleum, Active Fine Chemicals, Bangladesh Submarine Cable Company, lafargeHolcime, Active Fine, BATBC, BBS Cables, Beximco Limited, Brac Bank, BSRM Limited, Beximco Pharma, The City Bank, Confidence Cement, Delta Life, Eastern Bank, Grameenphone, IDLC Finance, Ifad Auto, LankaBankgla Finance, MJL Bangladesh, National Bank, Olympic Industries, Renata Limited, Singer Bangladesh, Square Pharma, Summit Power, Titas Gas, Unique Hotel and United Power Generation & Distribution Company Ltd.

Market operators say that the five large cap companies Grameenphone, British American Tobacco Bangladesh (BATBC), United Power Generation, Square Pharma and Brac Bank mostly led the fall in capitalization in the last couple of months.

GP led the fall of index as investors remained cautious about the ongoing dispute over audit claim between GP and the telecom regulator.

The Bangladesh Securities and Exchange Commission (BSEC) Chairman M Khairul Hossain recently said the dispute between Grameenphone, the largest listed company in terms of capitalization, and the telecom regulator began to impact the “structure of the market” as foreign investors invest largely in the fundamentals companies.

Foreign investors sold off the shares of Grameenphone along with Olympic Industries, United Power Generation, BATB and Square Pharma, BSEC chairman mentioned.

The fall of the five companies accounted for 80% of the market slide, he added.

The prime index of DSE, DSEX, so far lost about 1,450 points from its highest hit of 5,950 points since January 24 this year.

on Monday, the broad index of DSE dipped below the ‘psychological’ threshold of 4,400-mark. The index went down by 26.51 points or 0.82% to settle at 4,394, the lowest in more than 42 months since June 26, 2016, when the index was 4,380.