Investors continue panic selling
The benchmark index of Dhaka Stock Exchange on Sunday suffered a record plunge of 284.78 points as small investors rushed to sell off securities in the wake of most of the institutional investors withdrawing their investments from the capital market.
The DSE general index fell by 3.31 per cent to close at 8,295.41 points on the day.
The index on December 7 lost 185.53 points, the third highest single-day fall since the market crash on November 6, 1996, when the market bubbled first and then burst, losing 233 points. It shed 204.75 points on July 25 last, the second highest single-day fall after 1996.
Market operators said that the panic which spread at the bourse last week following the market regulators two directives, continued on the opening day of this week as investors fearing more fall in share prices.
The Securities and Exchange Commission on Tuesday issued a strict directive to the merchant banks and stockbrokers to stop advance netting facility. Earlier, on Monday, the commission also directed them not to permit trading by cheque.
These measures are mainly responsible for creating panic among the investors, said a stockbroker, adding, as a result, the general index suffered a steep fall on Wednesday on panic selling.
The index on Wednesday lost 547.43 points by midday. But, the market regained some poise after the capital market watchdog postponed those directives and ended the day with the index shedding 134.28 points.
Bangladesh Merchant Bank Association president Arif Khan told New Age on Sunday, as the Bangladesh Bank had directed the commercial banks to increase their cash-reserve ratio and the International Monetary Fund had asked the central bank to take steps so that 10 specific commercial banks withdraw from the capital market investment worth more than 10 per cent of their liabilities, most of the banks went for bulk selling of securities on the day.
Arif also said it was natural for every bank to take profit in December and, so, small investors should be very careful.
Most of the securities are overpriced and, as a result, it is a price correction in the overheated market, he added.
Salahuddin Ahmed Khan, a former chief executive officer of the DSE who later returned to his original occupation of a finance teacher at Dhaka University, said most of the institutional investors stopped buying shares and had been selling shares throughout the day.
He also said that the SEC should investigate properly to identify the market manipulators to stabilise capital market.
The SEC has already formed a four-member committee to investigate the Wednesday’s massive fall.
Of the 245 issues traded on the DSE on Sunday, 51 advanced, 191 declined, and three remained unchanged.
The daily turnover on the bourse was Tk 1,717.37 crore, up by Tk 94.61 crore from that in the previous trading day.
Aftab Automobiles topped the turnover leaders with 15.04 lakh shares worth Tk 75.94 crore, with the scrip gaining 7.28 per cent on the day.
The rest of the turnover leaders were Beximco, AB Bank, LankBangla Finance, Malek Spinning, Titas Gas, Shinepukur Ceramics, Shahjalal Islami Bank, Southeast Bank, and NBL.
Savar Refectories was the biggest gainer of the day, posting a 12.48 per cent rise in its share price, while the Shahjalal Islami Bank was the worst loser.
