DSEX, the key index of the Dhaka Stock Exchange (DSE), registered a 20.31% decline in the last one month as investors confidence dissipated over coronavirus concern, which prompted them to go for panicky sell-offs.
According to DSE data, in the last one month since February 16, DSEX lost 962 points or 20.31% to 3,773 points as of Monday. The DSEX came down six and half years low.
The market capitalization of the premier bourse nosedived to Tk2,98,893 crore by shedding Tk56,638 crore in the same period.
Market insiders and experts, talking to Dhaka Tribune, said investors dumped their holdings amid growing concern over the impacts of coronavirus pandemic as eight cases of COVID-19 were confirmed in the country.
Indices of the Dhaka bourse suffered another free-fall as nervous investors continued their sell-offs amidst growing concern over coronavirus, which caused further disruption in companies and world economy, they also said.
Former finance adviser to a caretaker government AB Mirza Azizul Islam told Dhaka Tribune: “Investors became panicky with the escalation of global coronavirus spread."
Other reasons are sell-offs by foreign investors and investors' lack of confidence for long because of disappointing data on major macroeconomic indicators, he also said.
Azizul Islam also former chairman of Bangladesh Securities and Exchange Commission (BSEC) suggested that investors should not sell shares at losses as the market hit the bottom and it meant that the market would rebound soon. The regulator should introduce circuit breaker for the index to check free fall, he added.
Stock market operators, taking to Dhaka Tribune, said that after the collapse in 2010, stocks never encountered such a bad time.
Former chairman of Bangladesh Securities and Exchange Commission (BSEC) Faruq Ahmed Siddique told Dhaka Tribune, “Investors are panicked by the recent fall. So, many of them sold off their shares”.
Meanwhile, Bangladesh Pujibazar Biniogkari Oikya Parishad on Sunday demanded closure of the stock market for the next two weeks.
The market capitalization at DSE dropped Tk56,638 crore in the last month. As of on Monday, DSE market cap declined to Tk2,98,893 crore from Tk3,55,531 crore on February 16.
Market capitalization, or market cap, is calculated by multiplying the total number of a company's outstanding shares with the current market price of shares.
Market operators observe that share price loss of large cap companies affected the overall market cap at DSE.
Stock market analysts said that the global outbreak of COVID-19 delayed RMG export shipments which were causing a huge amount of losses and might create a shortage of working capital in this sector.
