Stocks hit new low in three years

Stocks continued on their downward trajectory this week, with the benchmark equity index plunging below 5,600 mark for the first time in three years despite regulatory efforts to stem the market decline.

Panicked by the macroeconomic uncertainty and geopolitical crisis, investors started dumping their holdings from the beginning of the week, pushing the market indices to new lows as they see no way out of the dismal market situation.

Since the lifting of the floor price in January, the key index of the Dhaka Stock Exchange (DSE) shed a total of 818 points while Tk 884 billion was wiped off from the market capitalisation, the DSE data shows.

Against the backdrop of a persistent downward spiral of stocks, market stakeholders sat with the Bangladesh Securities and Exchange Commission (BSEC) on Monday to find a solution to this situation.

In an effort to slow down the fall of the index, the stock market regulator implemented a measure on Thursday restricting individual stocks from falling more than 3 per cent in a single day instead of previous 10 per cent limit.

This week, the benchmark index of the Dhaka Stock Exchange (DSE) saw a sharp fall for the second consecutive week, settling more than 168 points or 2.96 per cent lower at 5,518, the lowest level in three years.

BAT Bangladesh, Square Pharma, City Bank, Renata and Beacon Pharma sustained biggest losses, jointly accounting for a 60-point fall in the index.

The blue-chip DS30 index, a group of 30 prominent companies, plunged 10 points to 1,974 while the DSES Index, which represents Shariah-based companies, shed 29 points to 1,217.

"The investor sentiment failed to rebound despite several regulatory initiatives to improve investor confidence and clutch down the prolonged pessimism pervading the trading floor," said EBL Securities.

However, the market witnessed some buying appetite from bargain hunters, particularly for small paid-up stocks, as they anticipated short-term profit opportunities, said the stockbroker.

Turnover, a crucial indicator of the market, stood at Tk 27.65 billion this week as against Tk 19.12 billion last week, as this week saw five trading days instead of previous week's four days.

Accordingly, the daily average turnover stood at Tk 5.53 billion, which was 16 per cent higher than the previous week's tally of Tk 4.78 billion.

Investors were mostly active in the pharmaceutical sector, which accounted for 23 per cent of the week's total turnover, followed by the food sector (13.4 per cent) and textile sector (12 per cent).

Non-bank financial stocks saw the highest beating as the sector went down more than 8 per cent, driven by Islamic Finance that plunged more than 14 per cent. It was followed by life insurance, ceramic, travel, food and power sectors.

More than 83 per cent traded issues saw price erosion, as out of 394 issues traded, 327 declined while 57 advanced and 10 remained unchanged during the week.

Newly listed Asiatic Laboratories dominated the turnover chart, with shares worth Tk 1.56 billion changing hands, followed by Orion Infusion, Lovello ice-cream, Golden Son and Alif Industries.

Orion Infusion was the week's top gainer, posting a 23 per cent increase while Olympic Accessories was the worst loser, shedding 20 per cent.

The Chittagong Stock Exchange also saw a massive fall, with its All Shares Price Index (CASPI) losing 429 points to close at 15,815 and the Selective Categories Index (CSCX) shedding 245 points to finish at 9,522.

Of the issues traded, 247 declined, 45 advanced and 15 others remained unchanged on the CSE.

The port city bourse traded 23.13 million shares and mutual fund units with turnover value of Tk 816 million.

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