Stocks extend losses, wiping out Tk 580b in investors' wealth

Stocks extended its losing streak for a third straight week, as jittery investors keep offloading riskier assets in absence of any positive triggers amid fears for struggling economy.

The three-week fall has wiped out Tk 580 billion in investors' wealth while the benchmark equity index shed 410 points during the period.

Market experts said investors have long been suffering from a severe confidence crisis owing to prolonged economic uncertainties while adverse macroeconomic cues worsen the situation.

The country's economy is now enduring some stresses, so its impact is reflected on the stock market while the issue of capital gain tax in the next budget dampened the market sentiment, said a stockbroker.

Meanwhile, the Dhaka Stock Exchange (DSE) urged the government not to impose capital gain tax in the upcoming national budget, saying the new tax burden would negatively impact the already gloomy market.

This week, three sessions, out of five, suffered heavy losses while the two others closed higher.

Finally, the benchmark DSEX index of Dhaka Stock Exchange (DSE) settled the week more than 60 points or 1.14 per cent lower at 5,252.

The blue-chip DS30 index, a group of 30 prominent companies, lost more than 33 points to 1,875 while the DSES index, which represents Shariah-based companies, shed 16 points to 1,144.

Total turnover stood at Tk 19.51 billion this week, down from previous week's Tk 20.70 billion although this week saw regular five trading days instead of previous week's four days.

Accordingly, the average daily turnover dropped to Tk 3.90 billion, which was 25 per cent lower than the previous week's tally of Tk 5.17 billion.

Three sectors -- pharmaceuticals, textile and food -- accounted for more than 44 per cent of weekly turnover.

Almost all sectors faced selling pressure, leading to price erosion of more than 64 per cent stocks. Out of 390 issues traded, 248 declined, 115 advanced and 27 remained unchanged.

Alif Industries became the most-traded stocks with shares worth Tk 810 million changing hands, followed by IFIC Bank, Orion Pharma, Meghna Petroleum and Lovello Ice-Cream.

Bangladesh Industrial Finance Company was the top gainer, rising 46.34 per cent while Pioneer Insurance was the worst loser, enduring 19.54 per cent correction.

The market sentiment has yet to rebound due to the absence of any major positive triggers, which led the market to witness lackluster momentum throughout the week, allowing the bears to firm their control across the trading floor, said EBL Securities.

The negative sentiment about the market has led to investors' shying away from taking positions in equities while losses continued to mount on their portfolios since removal of the floor price.

The market has already plunged far below from the level where it was in July 2022 when the Bangladesh Securities and Exchange Commission reintroduced the floor price.

As a severe confidence crisis among local and foreign investors persists, the Bangladesh stock market emerged as the worst performer globally in May this year.

Now, nothing is in favour of the capital market. Apart from concerns over higher interest rates and cheaper local currency, profitability of listed companies has shrunk for higher import costs.

The Chittagong Stock Exchange also ended sharply lower, with its All Shares Price Index (CASPI) shedding 331 points to 15,072 and the Selective Categories Index (CSCX) losing 196 points to 9,068.

Of the issues traded, 225 declined, 73 advanced, and 25 others remained unchanged on the CSE.

The port city bourse traded 32.19 million shares and mutual fund units with turnover value of Tk 2.66 billion.

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