Dhaka stocks fell on Thursday after a two-day surge as investors went for profit-taking selling to minimise their loss in the recent share market crash, said market operators.
The benchmark general index of Dhaka Stock Exchange shed 114.80 points, or 1.49 per cent, to close at 7,575.89 points, ending an eventful week.
The index had regained 1,191 points on Tuesday and Wednesday after taking a 1,829-point nosedive in the previous six trading days.
Investors staged demonstration on Monday following a massive fall in share prices. Investors alleged a fund crisis created a volatile situation in the market and demanded government intervention to put and end to the bearish market trend.
The Securities and Exchange Commission stopped trading at 11:50am on Monday for the first time ever in the history of the bourse as the DSE general index lost 660 points. Later on the day, the Bangladesh Bank and the SEC sat in an emergency meeting to find ways to bring normalcy back to the volatile market.
The DSE general index gained 1,012 points on Tuesday, the highest single-day gain in the history of the bourse, as the central bank and the SEC took a set of measures to stabilise the market.
Commenting on Thursday’s market trend, BRAC ECL vice-chairman Saiful Islam said, ‘It has been a price correction and most of the investors went for selling stakes to pocket profits.’
‘Price correction is very important for a sustainable capital market,’ he added.
Salahuddin Ahmed Khan, a former chief executive officer of DSE who had returned to his original profession of teaching finance at Dhaka University, said, ‘Investors’ behaviour was perfect on the day as they went for selling to bag profits.’
‘Some overpriced securities are in the way of correction because of investors’ profit-taking attitude,’ said Salahuddin, adding that sustainability would return in the market if it continued to behave rationally.
Most of the major sectors, including banks, non-bank financial institutes, fuel and power, insurance companies, mutual fund, chemical and pharmaceuticals, textile, and telecommunication, saw a fall in share prices on the day.
Investors alleged some merchant banks failed to give them margin loan at a ratio of even 1:1 while the SEC set the ceiling of margin loan ratio at 1:2.
‘Although the SEC set the ceiling of margin loan ratio at 1:2, we are not bound to give loan at the maximum limit,’ remarked Bangladesh Merchant Banks Association president Sheikh Mortuza Ahmed.
‘Fund crisis is the main reason and the parent companies also have failed to supply additional funds to merchant banks,’ he added.
The turnover at the DSE on Thursday stood at Tk 1,063.37 crore, down by Tk 586.39 crore from that on the previous day.
Of the total 246 issues traded on the DSE on the day, 198 declined, 44 advanced, and four remained unchanged.
United Commercial Bank topped the turnover leaders with 33.14 lakh shares worth Tk 74.85 crore traded on the day.
The rest of the turnover leaders were Beximco, NBL, Peoples Leasing and Financial Services, Bay Leasing and Investment, Southeast Bank, Titas Gas, AB Bank, Prime Bank, and Grameenphone.
Sinobangla Industries was the biggest gainer of the day, posting an 11.88 per cent rise in its share price, while the Phoenix Insurance was the worst loser.
