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The Financial Express

Stocks plunge further on virus worries


Traders, wearing masks, monitoring stock price movements on computer screens at a brokerage house in the capital city — FE/Files Traders, wearing masks, monitoring stock price movements on computer screens at a brokerage house in the capital city — FE/Files

Stocks plunged further for the second straight week as worried investors continued to dump their holdings amid fears over impact of the fresh wave of Covid-19 virus due to rising trend of infected patients.

Week-on-week, the DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), went down by 107.48 points or 1.98 per cent to settle at 5,327.

The DSEX eroded more than 241 points in the past two consecutive weeks.

Market analysts said the number of Covid-19 infected patients rising alarmingly in every day in the country and the situation is deteriorating fast which took a heavy toll on the struggling market.

The downfall was aggravated as edgy investors remained conservative due to rising cases of Covid-19 in the country in the recent days, said a top broker.

He noted that despite stock market regulator's assurance, investor concerns over the market acted as the primary trigger for the consecutive fall in equity indices.

In the last two weeks, the transmission of novel coronavirus had been gradually rising around the globe with experts fearing spread of new strains of the pathogen, including those first detected in the United Kingdom and South Africa.

Owing to a rising number of infections, investors apprehend that the country could be in for a second round of lockdown, said a merchant banker preferring anonymity.

The spread of such news created a rumour that the stock market may be kept shut again, although the securities regulator assured that there is no such possibility. If the banks were kept open, so would the market, the Bangladesh Securities and Exchange Commission (BSEC), said in a statement.

The market has been in the doldrums for the last few weeks due to a host of reasons, including the setting of the margin loan rate ceiling by the securities regulator, approval of a number of big IPOs within a short period of time and repeated changes made in policies, said an analyst.

Two other indices also ended lower with the DS30 index, comprising blue chips, plunged 52.99 points to finish at 2,020 and the DSE Shariah Index shed 29.99 points to close at Tk 1,217.

The week's total turnover on the prime bourse stood at Tk 30.08 billion which was Tk 26.28 billion in the week before as last week saw five sessions instead of previous week's four.

The daily turnover averaged out at Tk 6.02 billion, which was 8.40 per cent lower than the previous week's average of Tk 6.57 billion.

Block trade contributed 10 per cent to the total weekly turnover, where stocks like British American Tobacco, United Power, Unilever Consumer Care, GBB Power and Provati Insurance dominated the block trade board.

The non-bank financial institutions (NBFI) faced the highest correction, losing 5.0 per cent, despite the central bank enhanced the dividend limit for NBFIs' to 30 per cent, from 15 per cent, followed by engineering with 4.10 per cent, telecom 3.0 per cent, pharmaceuticals 2.70 per cent and textile 1.70 per cent.

On the other hand, general insurance sector posted the highest gain of 2.80 per cent with nine out of top 10 gainers were insurance companies, followed by food & allied with 1.10 per cent.

Rising number of Covid-19 cases made investors worried as the regulator's efforts to tame panic-driven investors done very little to clutch the market fall, commented EBL Securities.

The port city's bourse traded 88.34 million shares and mutual fund units with turnover value of Tk 2.85 billion during the week.

A new issue - NRB Commercial Bank made its shares trading debut last week and gained 25 per cent to close at Tk 12.50 on Thursday.

 

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