Profit-taking, SEC’s directives deemed as main factors
The benchmark index of the Dhaka Stock Exchange (DSE) Tuesday suffered the third highest single-day plunge since its introduction in 2001 amid profit-taking and due to the regulator’s fresh directives.
Profit-taking and recent directives by the Securities and Exchange Commission (SEC) to tame the over-heated market jointly affected the market, dealers said.
The benchmark DSE General Index (DGEN) closed at 8585.88 with a loss of 185.53 points or 2.12 per cent. The broader DSE All Shares Price Index (DSI) lost 155.38 points or 2.14 per cent to end at 7105.88, while the DSE 20 blue chip index shed 98.68 points or 1.86 per cent to end at 5197.30.
“Profit-taking by the investors dragged down the market massively,” said Md Arif Khan, DMD of IDLC Finance Ltd.
However, he said, the SEC and the DSE should strengthen market surveillance, as many investors and brokerage houses are not following the regulator’s rules and regulations properly.
“The SEC’s new directives, the investors’ panic sale of shares, and Bangladesh Bank’s initiative to withdraw illegally invested industrial loans from the market collectively affected the market,” said Akter H Sannamat, managing director of Prime Finance and Investment Ltd.
“Actually, we the small investors are not the real beneficiaries of the recent directives, though the SEC took the decision to save us in an over-heated market. The big investors have bought majority shares from the small investors by taking the advantage of the SEC’s decisions,” a small investor told the FE.
The small investors alleged that some vested quarters are trying to drag down the market to purchase shares at lower prices, to sell later at higher prices.
Shares of all the sectors experienced erosion in prices on the day. Banking sector, the market’s bellwether, went down by 2.94 per cent, and all the 30 banks lost on profit-taking, dealers said.
The non-banking financial institutions were in the red territory on the day, as the sector lost 1.91 per cent.
Insurance sector also closed down – general insurance by 4.04 per cent and life insurance by 1.82 per cent.
The turnover declined to Tk 20.50 billion, down by 37.0 per cent over the Sunday’s record high of Tk 32.50 billion. Losers dominated the market, as out of 242 issues traded, only 25 gained, 209 declined and eight remained unchanged.
