Bourses slide at opening as regulator seeks reason behind rise of junk stocks
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Stocks slide at the opening on Thursday as investors were selling mood following the securities regulator move to find out the reasons behind soaring prices of listed securities with poor price-earning (P/E) ratio.
DSEX, the prime index of the Dhaka Stock Exchange (DSE), went down by 22.30 points or 0.31 per cent to stand at 7,174 points within the first 30 minutes of trading at 10:30 am, after a record-breaking rally in the past seven days.
Earlier, The Bangladesh Securities and Exchange Commission (BSEC) Wednesday asked the Dhaka bourse to submit a report about the reasons behind the skyrocketing prices of low-performing companies and junk stocks.
The DSE has also been asked to find whether margin loans were disbursed against the securities having P/E ratio above 40 and submit a report within 15 days.
Stocks having P/E ratio over 40 are witnessing selling pressure as investors fear the price fall of those companies after the BSEC move, said a leading broker.
However, large-cap stocks having strong fundamentals are witnessing price surges as investors are moving to large-cap stocks, he said.
Meanwhile, two other DSE indices also saw a negative trend with the DS30 index, comprising blue chips, declined 13.41 points to reach 2,600 while the Shariah Index (DSES) lost 3.92 points to stand at 1,568 points till then.
Turnover, another important indicator of the market, stood at Tk 3.75 billion within the first 30 minutes of trading at 10:30 am.
Of the issues traded till then, 120 advanced, 205 declined, and 46 remained unchanged on the DSE trading floor.
National Tubes was the most traded stock till the filing of this report with shares worth Tk 205 million changing hands, closely followed by BATBC, Square Pharma, BSCCL and Saif Powertec.
The Chittagong Stock Exchange also opened lower with its All Shares Price Index (CASPI)—losing 52 points to stand at 20,926 while the Selective Categories Index – CSCX shed 32 points to reach 12,547, also at 10:30 am.