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The Financial Express

Weekly market review: Free fall of index creates panic

FE Report | Published: January 11, 2020 10:45:09 | Updated: January 17, 2020 11:43:20


Weekly market review: Free fall of index creates panic

Dhaka bourse closed the week with the highest single week fall in core index since 2013 following investors' panic sales executed in all sessions amid lack of confidence.

The core index also hit the 44-month low as majority number of listed securities witnessed price corrections throughout the week on the Dhaka Stock Exchange (DSE).

The core index DSEX displayed free falls in all sessions and lost 5.87 per cent or 261.90 points to close at 4197.39.

The erosion of 261.70 points was the highest single week fall since 2013 while the loss of 252 points was the second highest single week fall observed in February, 2017.

At the end of the week, the market capitalisation of the premier bourse DSE came down to Tk 3.26 trillion on Thursday with a loss of 5.04 per cent or Tk 171.61 billion from the closing mark of the previous week.

According to a market review of International Leasing Securities, the DSEX nosedived to more than 44-month low following the investors' panic sell executed to escape further loss in their portfolios.

"The investors are worried about the banks' profits. The finance minister's latest meeting with stock market regulator and the DSE failed to offer the investors any hope of market recovery," said the International Leasing Securities.

The price correction witnessed by large cap companies also triggered the fall of the broad index.

The market insiders said the market was almost directionless in last week and many investors became nervous following the volatility of the market.

Apart from investors' panic sales, many lenders also executed forced selling in margin accounts as the prices of their clients' stocks came down below the levels which allow them to sell stocks, according to insiders.

As a result, the DSE witnessed a moderate rise in total turnover value amid the sharp correction of the core index.

In last week, the DSE featured a total turnover of above Tk 15.77 billion which was 21.05 per cent higher than that of previous week.

Of 359 issues traded, 310 declined and 13 were unchanged while only 34 advanced on the DSE in last week.

At the end of the week, the shariah based index DSES settled at 945.92 points with a loss of 6.29 per cent or 63.50 points.

The DS30 index comprising blue chip securities declined 6.62 per cent or 99.75 points to close at 1406.38 points.

Of the major sectors based on market capitalisation, telecommunication witnessed the highest correction 11.3 per cent in market capitalisation followed by textile 8.2 per cent, financial institutions 8.0 per cent, pharmaceuticals & chemicals 7.3 per cent, engineering 6.0 per cent and bank 5.5 per cent.

Investors' activities were concentrated mostly on engineering sector which grabbed 14.2 per cent of the market turnover followed by bank 14.1 per cent, pharmaceuticals & chemicals 10 per cent and general insurance 10 per cent.

LafargeHolcim Bangladesh topped the weekly turnover chart with a value of Tk 909.52 million followed by Khulna Power Company Tk 784.08 million, ADN Telecom Tk 748.08 million, BRAC Bank Tk 587.08 million and Standard Ceramic Industries Tk 414.63 million.

Emerald Oil Industries was the number one gainer in last week with a rise of 29.1 per cent to close at Tk 17.30 each on the DSE.

Sinobangla Industries was the week's worst loser after declining 19.54 per cent to close at Tk 66.70 each.

mufazzal.fe@gmail.com

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