Bangladesh
5 years ago

Stock market erosion persists

Turnover at DSE plummets to 13-month low

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Turnover at the country's premier bourse plummeted to a 13-month low on Tuesday as many investors 'refrained' from taking part in transactions amid ongoing price correction.

On the day, turnover at the Dhaka Stock Exchange (DSE) was at Tk 2.69 billion, the lowest since March 08, 2018.

Following the price correction witnessed by listed companies belonging to all sectors, the DSE broad index DSEX also shed 1.14 per cent or 60.55 points to close at 5248.91 points.

The market opened on a negative note on Tuesday and the main index experienced a free fall for around three hours.

Later, the market tried to bounce back but failed to overcome the loss and finally closed the session with a notable loss.

The operators said the market observed selling pressure as many shaky investors opted to dispose of their shares to avoid further loss.

"Investors' participation in share trading was less. This contributed to the big fall in indices and turnover as well," said a leading merchant bank.

The DSEX lost 5.0 per cent or 274 points in last nine sessions during April 2 to April 16, 2019.

The DSE featured a turnover of over Tk 2.73 billion on March 08, 2018.

The DSE's turnover on Tuesday was the lowest one since March 08, 2018, according to DSE information.

Meanwhile, a section of general investors staged demonstration in front of the DSE on Tuesday protesting the continuous fall in price.

Asked, the former chairman of the securities regulator Faruq Ahmad Siddiqi said lack of transparency and presence of a small number of companies having strong fundamentals, among others, were the reasons behind the investors' lack of confidence.

"I think some manipulations are responsible behind the abnormal fall and rise of the market observed at different times. We are unable to see the inquiry reports prepared by the regulator (on these manipulations)," Mr. Siddiqi said.

He said investors do not have much confidence as the market lacks transparency.

"Many companies which went public in the last few years failed to sustain their offer prices. That means that the companies were not eligible to go public with the prices approved by the regulator," Mr. Siddiqi said.

He laid emphasis on listing of more companies having good fundamentals.

On Tuesday, the top officials of the state-run Investment Corporation of Bangladesh (ICB) held a meeting with some officials of the Ministry of Finance.

After the meeting, the ICB managing director Kazi Sanaul Hoq said they urged the ministry to strengthen the ICB's capacity to bolster the capital market.

"We have also sought a market stabilisation fund worth Tk 50 billion. The market will get support if this fund is approved," Mr. Sanaul said.

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