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Dhaka Tribune

Dhaka bourse collapses amid coronavirus fear

DSE key index loses 279.32 points in single day 

Update : 09 Mar 2020, 12:08 AM

The country’s prime bourse on Monday witnessed a massive fall by 6.51%, the highest single-day negative fall since the broad index was introduced seven years ago. It comes in the aftermath of news related to the coronavirus cases in Bangladesh.

The key index of Dhaka Stock Exchange (DSE), DSEX, settled at 4008.05 after losing 279.32 points or 6.51% in Monday’s session. It was the lowest level of the DSEX in  the7 years since January 2013. The index was launched on January 27, 2013 with 4,056 as base points.

The market capitalization at Dhaka bourse has dropped Tk17,291 crore in the session. As of Monday, its market cap declined to Tk3,14,219 crore from Tk3,31,510 crore. Panic-stricken selloffs increased turnover to slightly Tk71 crore or 16.4% and closed at Tk499 crore.

Among the traded issues two gained, 352 declined and one remained unchanged during the session at the Dhaka bourse.

Global markets take hit

Meanwhile, on Monday global markets took a massive hit after the alliance between OPEC and Russia fell through causing the worst one-day crash in crude prices in nearly 30 years, fueling panic triggered by the escalation of the coronavirus outbreak.

The S&P 500 (SPX) fell about 6%. The Dow (INDU) fell as many as 2,046 points. The Nasdaq Composite (COMP) was down 5.4%. The New York Stock Exchange halted trading for 15 minutes after stocks plunged more than 7%. They retraced some of their losses after the market reopened, reports CNN.

Talking to Dhaka Tribune, market analysts said the share prices at Dhaka stock market saw a steep fall due to the fear of the coronavirus impact.

The virus outbreak in the country intensified panic in the market which resulted in the massive sell-off, they added.

●    Key index of DSE sheds 279.32 points or 6.51%

●    DSEX settling at 4008.05, was the lowest in 7 years

●    Highest single-day negative fall since introduction of broad index

●    Market capitalization shrinks by Tk17,300cr in single day

They also said that because of coronavirus the world's capital markets have slumped to record lows since the 2008 global financial crisis, with the world’s leading indices kept falling in recent times.

“The novel coronavirus continued to weigh heavily on investors confidence after three convicted cases broke down in the country on Sunday. Making matters worse, the sell-off carried over from the beginning of the session and continued till the end owing to investors concerns over the unforeseen shock to the economy due to this corona jeopardy,” said EBL Securities Limited in its daily market commentary.

On Sunday, the Institute of Epidemiology Disease Control and Research (IEDCR) confirmed that three Bangladeshis had tested positive in the country for Covid-19, a new strain of coronavirus that has killed over 3,600 people worldwide.

Three others, who were in contact with the infected trio, are also in quarantine at the moment, IEDCR Director Dr Meerjady Sabrina Flora disclosed at a press briefing.

Two of the three infected recently returned from different cities in Italy. All three are aged between 20 and 35, she added.

The pharmaceuticals sector contributed 18.8% of the total turnover while engineering, textile and banking sectors contributed 12.3%, 11.5% and 10% respectively, showed the daily market analysis of UCB Capital Management Limited.

BIFC secured the highest gain of 9.5% during the session. The stock was followed by Mutual Trust Bank Ltd with 0.8%.

On Monday, within only six minutes of trading, DSEX lost 100 points. As the downfall continued, it had lost 120 points by 10:37am. The index came down below 4100 points at 11.30am. Around 12:30pm, DSE lost 205 points to stand at 4,082 and 279.32 points lost at end the session.

CSE registers loss

On the other hand, the Chittagong Stock Exchange (CSE) also registered loss at the end of the session. The selected index, CSCX and all Share Price Index, CASPI declined by 466.9 and 769.3 points respectively.

DSE Director Minhaz Mannan Emon told Dhaka Tribune: “The global virus outbreak has led to the downfall of the global stock market. The Pakistan stock exchange closed on Monday. There has also been panic among the stock market investors. For this reason, the stock market is showing a big downward trend.”

An analysis of the Asian Development Bank (ADB), Economic Impact of the Covid-19 Outbreak on Developing Asia, projected a global impact in the range of $77 billion to $347 billion, or 0.1% to 0.4% of global gross domestic product (GDP) due to this virus.

Even so, Bangladesh’s export and import activities may suffer for months to come from the economic impact of this global epidemic.

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