Stocks sink to 40-month low amid panic sale

Stocks plunged further with key index of the prime bourse dipping to 40-month low on Monday, as nervous investors continued their selling spree.

DSEX, the prime index of the Dhaka Stock Exchange, went down by 62.25 points or 1.35 per cent to settle at 4,533 on Monday, the lowest since August 31, 2016.

The price correction witnessed by large cap companies such as Grameenphone, United Power Generation and Distribution Company (UPGDC) and British American Tobacco Bangladesh Company (BATBC) triggered the fall of broad index.

The market insiders said different rumours including the possibility of incurring poor profits or loss by many banks due to increased non-performing loans (NPLs) are spiralling in the market.

The DSEX has lost a cumulative 248 points in the past one month while it shed 1,416 points or 23.80 per cent since January 24 this year, when the index peaked at 5,950.

Meanwhile, the DSE decided on Monday to seek time from the finance minister and the governor of the Bangladesh Bank for holding a meeting.

DSE director Minhaz Mannan Emon said they want to sit with them to assure investors about market supportive measures.

The experts said the listing of many companies having weak fundamentals, lack of good governance and gloomy microeconomic outlook prompted many investors to offload shares or to move to the sidelines.

The former chairman of the securities regulator Faruq Ahmad Siddiqi said the listing of the companies having weak fundamentals shattered investors' confidence.

"Apart from the lack of good governance, the performance of a good number of companies is not up to the mark," Mr. Siddiqi maintained.

He said the overall business scenario is also not market supportive.

Asked, a market operator said some banks and non-banking financial institutes (NBFIs) might have withdrawn their investments from the market to close their balance sheets by December this year.

"The forced sale has also been executed from some houses to avoid further losses. There are also some rumours about the banking sector. These issues have frustrated investors," the market operator said preferring anonymity.

He said the dividends recommended by many listed companies were also not market supportive.

According to DSE information, 26 listed companies have recommended no dividend for the year ended on June 30, 2019 so far.

On Monday, the losers took control like the previous session.

Of 353 issues traded, only 67 advanced, 233 declined and 53 were unchanged on the DSE.

Of the large cap companies having influence over the broad index, the share price of Grameenphone declined 0.62 per cent, ICB 2.36 per cent, UPGDC 1.43 per cent, BATBC 1.94 per cent on Monday.

The market capitalisation also eroded by Tk 145 billion in one month while it wiped out Tk 753 billion in the past ten months since January 24.

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